Markets remain in fine fettle despite some profit booking

Indian benchmarks are trading in fine-fettle despite paring some early gains, in the late morning session. Profit booking has appeared form some corners amid high volume of trade and traders are opting to take some profit ahead of the WPI inflation data, scheduled to be announced later in the day. Though, the strength in rupee coupled with the sanguine global markets has given the domestic indices reason to cheer. The bourses were also getting support with the market regulator Sebi’s latest step, allowing overseas entities to invest in government securities without any auction mechanism. The step is likely to boost foreign fund inflows into the capital markets. On the sectoral front, rate sensitives, banking and auto are flying high closely followed by the defensive FMCG and also the capital goods sector stocks. Banking gauge was encouraged with reports of majority of them paying higher advance tax numbers for the second quarter. SBI, the PSU banking major was trading higher by about two percent despite reportedly paying almost 40 percent lower advance tax for Q2FY14 at Rs 1,120 crore as against Rs 1,820 crore in the corresponding period last year.

BSE Sensex and NSE Nifty were comfortably trading near their psychological 5900 and 20,000 levels respectively. The market breadth on BSE remains strongly in favour of gainers with advances to declines in the ratio of 1056:585. The BSE Sensex is currently trading at 19956.40, up by 223.64 points or 1.13% after trading in a range of 20086.43 and 19923.32. There were 24 stocks advancing against 6 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.49% and Small cap index gained 0.68%.

The top gaining sectoral indices on the BSE were, Bankex up by 3.04%, Auto up by 1.67%, FMCG up by 1.50%, Capital Goods up by 1.50% and PSU up by 1.44%. On the other hand, Healthcare down by 1.27%, IT down by 1.22% and TECk down by 0.74% were the losing sectoral indices.

The top gainers on the Sensex were ICICI Bank up by 4.44%, Hero MotoCorp up by 3.44%, Maruti Suzuki up by 3.06%, ONGC up by 2.56% and HUL up by 2.16%. On the flip side, Sesa Goa down by 2.04%, TCS down by 1.96%, Infosys down by 1.34%, Coal India down by 1.21% and Wipro down by 1.17% were the top losers on the Sensex.

Meanwhile, in order to give a boost to country’s overseas shipments, the government has rationalized the duty drawback and brought more items under the scheme. Duty drawback is the reimbursement of customs duty and with the revised all industry drawback duty, the central government will continue to support exporters with substantial rates, which will come into effect from September 21. Further, under the duty drawback scheme, the revenue department refunds the duty incidence such as excise, customs, and service tax on the imported inputs used in the manufacture of exported goods.

The government’s statement also said that besides duty drawback change, a large number of rationalisation measures have also been undertaken to realign entries, provide rates on more items to assist exporters. These measures are to better differentiate all industry rates for export products with higher duty incidence and to address classification issues on export products, it added. The statement further added that for expeditiously addressing exporters concerns, the term of the recently constituted panel, headed by Planning Commission Member Saumitra Chaudhuri, has been continued for the next three months. The panel was set up to promote Indian exports with 'fair and representative' rebate of the incidence of customs and central excise duties and service tax related with the manufacture of export goods.

Meanwhile, country’s exports registered a double-digit growth of 12.97% for the second consecutive month in August 2013 to $26.14 billion on account of improved global situation, which also narrowed the trade deficit to $10.9 billion in the reported month from $14.17 billion a year earlier.

The CNX Nifty is currently trading at 5,907.25 up by 56.65 points or 0.97% after trading in a range of 5,957.25 and 5,903.50. There were 41 stocks advancing against 9 declines on the index.

The top gainers of the Nifty were IndusInd Bank up by 4.51%, ICICI Bank up by 4.25%, Axis Bank up by 3.53%, Hero MotoCorp up by 3.50% and Maruti Suzuki was up by 3.37%. On the flip side, Ranbaxy down by 26.55%, HCL Tech down by 3.43%, Sesa Goa down by 2.12%, TCS down by 1.57% and Lupin down by 1.45% were the major losers on the index.

Most of the Asian equity indices turned lower after a good start; Hang Seng was up by 288.22 points or 1.26% to 23,203.50 and Jakarta Composite added 18.93 points or 0.43% to 4,375.54,

On the other hand, Shanghai Composite was down by 19.39 points or 0.86% to 2,236.22, Straits Times was down by 0.78 points or 0.02% to 3,120.30, Seoul Composite was lower by 9.74 points or 0.49% to 1,994.32 and Taiwan Weighted plunged by 82.88 points or 1.01% to 8,142.48.

The Japanese and Malaysian markets remained closed for the trade today.