Benchmarks retreat from day’s high; remain firm in green

Benchmark equity indices facing stiff resistance near day’s high level, although have retreated from those levels, yet remain firmly rooted in green, with gains of over quarter of a percent. Sustained buying by funds and retail investors for third consecutive session after action packed speech by the new Reserve Bank of India Governor Raghuram Rajan detailing the roadmap for reforms on Wednesday, has kept the mood upbeat at Dalal Street. However, negative start of European counterparts have taken a bit of the gains from benchmark equity indices, which are now oscillating below the crucial 19,150 (Sensex) and 5650 levels (Nifty) respectively. Meanwhile, broader indices too in sync with frontline peers, have given up some of their gains.

On the global front, while Asian markets were making moderate gains Friday, ahead of a much-anticipated U.S. labor report, with most regional bourses looking set to end the week with solid gains, European markets were witnessing bit of caution ahead of the monthly jobs report in the U.S. which may help determine whether the U.S. Federal Reserve curbs its stimulus program.

Closer home, stocks from Consumer Durables and Auto witnessing profit-booking, were tempering market’s gains. On the flip side, stocks from Capital Goods, Health Care and Banking counter, witnessing substantial traction were adding to upside chances of the markets. Private banks continue to gain for a second day after banking stocks saw their biggest single-day gains in over 4 years on Thursday after the Reserve Bank of India raised overseas borrowing limits for lenders as part of a slew of measures unveiled by new Governor Raghuram Rajan. Meanwhile, IT shares recovered from a bout of profit-taking on Thursday. Meanwhile, telecom stocks, like Bharti Airtel and Idea Cellular were also ringing loud ahead of the crucial TRAI meeting to deliberate upon the issue of spectrum pricing. The overall market breadths were favoring advances which were outnumbering declines in the ratio of 1141: 817; while 135 shares remained unchanged.

The BSE Sensex is currently trading at 19149.32, up by 169.56 points or 0.89% after trading in a range of 19212.23 and 18929.38. There were only 18 stocks advancing against 12 declines on the index.

The broader indices trimmed some of its gains; the BSE Mid cap and Small cap indexes were up by 0.37% and 0.48% respectively.

The top gaining sectoral indices on the BSE were, Capital Goods up by 1.41%, Healthcare up by 1.40%, Bankex up by 1.13%, Teck up by 1.03% and Power up by 0.90%. While, Consumer Durables down by 0.66% and Auto down by 0.47% on the BSE.

The top gainers on the Sensex were, ICICI Bank up by 4.96%, Cipla up by 3.87%, Jindal Steel up by 3.35%, Bharti Airtel up by 2.74% and L&T up by 2.19%. On the flip side, Coal India down by 3.09%, Hindustan Unilever down by 2.28%, Tata Power down by 2.06%, Hero MotoCorp down by 1.34% and Mahindra and Mahindra down by 1.25% were the top losers on the Sensex.

Meanwhile, in an indication that the government will face difficulty in meeting its revenue target, the gross direct tax, which includes personal income tax, corporate tax, securities transaction tax and wealth tax, collections rose by 14.43% to Rs 1.88 lakh crore during the April-August period of 2013-14 fiscal as against Rs 1.64 lakh crore in the same period last year.

The rise is much lesser than the total budgeted target of the Rs 6.68 lakh crore, representing a growth of 19 per cent from Rs 5.65 lakh crore in the previous fiscal that the government plans to collect through corporate tax, income tax and wealth tax this fiscal year. While corporate tax collection, in view of the slowdown in economic activity, grew by 11.72%, to Rs 1,08,075 crore from Rs 96,738 crore a year earlier, gross collection of personal income tax was up by 18.91% to Rs 78,187 crore in the first five months of this fiscal, from Rs 65,752 crore in the year ago period. Additionally, Securities transaction tax or (STT) mop-up stands at Rs 1,649 crore, while wealth tax collection posted a growth of 24.44% to Rs 280 crore against Rs.225 crore collected in the same period last fiscal.

However, interestingly, net direct tax collections during the April-August period this fiscal rose at a faster pace of 15.42% to Rs 1,43,138 crore as compared to Rs 1,24,019 crore mopped up in the same period a year ago.

The CNX Nifty is currently trading at 5,640.70, up by 47.75 points or 0.85% after trading in a range of 5,658.65 and 5,566.15. There were 31 stocks advancing against 19 declines on the index.

The top gainers of the Nifty were ICICI Bank up by 5.04%, Cipla up by 4.16%, Grasim up by 3.89%, Power Grid up by 3.59% and Bharti Airtel up by 3.27%. On the flip side, Coal India down by 3.09%, Bank of Baroda down by 2.76%, HUL down by 2.30%, Hero Moto Corp down by 1.98% and Cairn India down by 1.94% and were the major losers on the index.

The Asian equity indices were trading in mixed; Seoul Composite up by 0.84%, Straits Times up by 0.27%, Hang Seng up by 0.16%, KLSE Composite up by 0.24% and Shanghai Composite up by 0.84%. While, Nikkei 225 was down by 1.45%, Jakarta Composite down by 0.41% and Taiwan Weighted down by 0.06%.

European markets have got off to a positive start; with CAC 40 adding by 0.16%, DAX rising by 0.48% and FTSE 100 rising by .89%.