Firm trade prevails; Metal, Oil & Gas leads

Indian equity markets added gains to continue firm trade in the late afternoon session on account of buying in front line counters and taking cues from European counterparts. The sentiments got support on back of strong buying in metal stocks which rose tracking signs of stabilization in the world’s second-largest economy. Data showed that China’s vast manufacturing sector hit a four-month high in August. The domestic currency recovered from day’s low on back of RBI intervention to provide a modest support. Traders were seen piling position in Metal, Oil & Gas and PSU stocks while selling was witnessed in Realty and Bankex sector stocks. In scrip specific development, JSW Steel was trading firm on reports that company will hike its product prices by 4% to 6% from September 01 following a steep rise in raw material cost. JBF Industries was trading firm after the company’s board approved buyback of equity shares.

On the global front, most of the Asian markets were trading in red barring Hang Seng while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,350 and 18,100 levels respectively. The market breadth on BSE was positive in the ratio of 1016:1003, while 138 scrips remain unchanged. 

The BSE Sensex is currently trading at 18150.10, up by 244.19 points or 1.36% after trading in a range of 18275.88 and 17759.59. There were 25 stocks advancing against 5 declines on the index.

The broader indices were trading on a mixed note; the BSE Mid cap index was down by 0.11% and Small cap index was up 0.08%.

The top gaining sectoral indices on the BSE were, Metal up by 6.46%, Oil & Gas up by 2.43%, PSU up by 1.68%, TECK up by 1.58% and IT up by 1.57%, while Realty down by 2.70% and Bankex down by 0.87% were the only losers on the sectoral index.

The top gainers on the Sensex were Tata Steel up by 8.85%, Sterlite Industries up by 8.71%, Hindalco Industries up by 7.45%, Jindal Steel up by 5.89% and Bharti Airtel up by 5.19%. On the flip side, HDFC was down by 1.40%, HDFC Bank down 1.35%, Hero MotoCorp down 0.74%, ICICI Bank was down by 0.49% and SBI down by 0.15% were the top losers on the Sensex.

Meanwhile, in order to raise the tax revenue collection, the government is likely to clear the Direct Taxes Code (DTC) Bill 2013, which will bring in sweeping changes in the income tax regime, including a higher 35% tax for the super-rich and a wealth tax on a host of new assets such as expensive watches and paintings.

As per the new tax bill, persons earning Rs 10 crore or more a year will be taxed at a higher rate of 35% on their income. Further, an additional tax of 10% may be levied if annual earnings from dividends on mutual funds and equities exceed Rs. 1 crore. For companies, minimum alternate tax may be levied on book profit, while, the securities transaction tax is likely to stay. At present, people with an annual income less than Rs. 2 lakh are exempt from paying taxes while those earning Rs 2-5 lakh are taxed at 10%, Rs 5-10 lakh at 20% and above Rs 10 lakh at 30%. These taxes slabs are also likely to be changed in the new law.

The government is struggling to keep in control the fiscal deficit of the country which surged to 4.9% of GDP in the FY13. The government has expressed its commitment to contain the fiscal deficit to 4.8 percent of GDP in FY14 and reduce it gradually to 3 percent by FY17 and devising various additional measures to garner more revenue. Tax income is the major source of revenue for the government. In the last fiscal, the government’s direct tax collection stood at around Rs 5.65 lakh crore, while, indirect taxes collection was at around Rs 4.69 lakh crore.

The CNX Nifty is currently trading at 5,364.35, up by 61.80 points or 1.17% after trading in a range of 5,404.70 and 5,254.05. There were 36 stocks advancing against 14 declines on the index.

The top gainers of the Nifty were Ranbaxy Laboratories up by 9.01%, Tata Steel up by 9.01%, Sesa Goa up by 8.98%, Hindalco Industries up by 7.72% and JP Associates up by 5.93%. On the flip side, DLF down by 5.78%, IndusInd Bank down by 2.15%, HDFC Bank down by 1.58%, HDFC down by 1.50% and ACC down by 1.20% were the major losers on the index.

Most of the Asian equity indices were trading in red; Nikkei 225 was down by 0.44%, Jakarta Composite down by 1.20%, Straits Times down by 0.42%, KLSE Composite down by 1.33%, Shanghai Composite down by 0.28%, Taiwan Weighted down by 0.23% and KOSPI Composite down by 0.98%. On the other hand, Hang Seng up by 0.36% was the sole gainer.

The European markets were trading in green; France’s CAC 40 was up 1.04%, Germany’s DAX added 1.05% and the United Kingdom’s FTSE 100 gained 0.77%.