Benchmarks continue firm trade; IT, TECK lead

Indian equities added minor gains to continue firm trade in the late afternoon session on account of buying in front line counters. The sentiments were optimistic despite August IIP threw up an ugly surprise by growing merely 0.6% in August and September WPI too came as rude shock by rising to eight month high level of 5.46%. Investors were on upbeat mood after Finance Minister P Chidambaram, committing to contain fiscal and current account deficits, stated that the government would not hesitate to take difficult decisions to keep them under check. Traders were seen piling positions in IT, TECK and Bankex stocks while selling was witnessed in FMCG, Consumer Durables and Metal sector stocks. In scrip specific development, Wockhardt was locked at lower circuit limit after UK regulator withdrew the previously issued GMP Certificate to the company’s manufacturing facility situated at Aurangabad. TTK Prestige was trading in red on posting dismal July-September quarter earnings. It reported flattish second quarter net profit of Rs 30.30 crore while total income from operations grew by 2.97% to Rs 345.54 crore. Dishman Pharmaceuticals & Chemicals was trading in red on concerns that an income tax survey was conducted in its premises.

On the global front, most of the Asian markets were trading in red while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,100 and 20,600 levels respectively. The market breadth on BSE was positive in the ratio of 1210:989 while 144 scrips remained unchanged.  

The BSE Sensex is currently trading at 20607.64, up by 79.05 points or 0.39% after trading in a range of 20,645.94 and 20497.88. There were only 14 stocks advancing against 16 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap index were trading higher by 0.70% and 0.69% respectively.

The gaining sectoral indices on the BSE were IT up by 2.34%, TECK up by 1.93%, Bankex up by 0.41%, Oil & Gas up by 0.40% and Auto up by 0.34%. While, FMCG down by 0.44%, Consumer Durables down by 0.42%, Metal down by 0.28%, Power down by 0.26% and Capital Goods down by 0.23% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 4.66%, Wipro up by 3.01%, Tata Motors up by 1.19%, Infosys up 1.14% and Dr. Reddy’s Lab was up by 1.13%. On the flip side, Hindalco Industries down by 2.01%, BHEL down by 1.90%, Tata Steel down by 1.71%, Gail India down by 1.61% and Cipla down by1.36% were the top losers on the Sensex.

Meanwhile, in a bid to help special economic zone (SEZ) units amid prevailing global economic slowdown, the Commerce Ministry has planned to seek tax concessional structure for SEZ units under which the duty forgone towards sale of products in domestic tariff area (DTA) could be recovered once the economic situation improves.

The tax concession would be given to SEZ units to sell their products in the domestic market as several of these units in sectors like auto components, textiles and pharmaceuticals are not able to export due to global demand slowdown. Presently, SEZ units have to pay full duty if they sell goods in the DTA. The move will also help SEZs in boosting their manufacturing process, which in turn will create jobs and revive India's economic growth. Indian industrial output has slowed down sharply to 0.6 percent in August mainly due to contraction in manufacturing and mining.

The government has approved 576 such zones out of which 173 have commenced exports. Presently, SEZs units are struggling with global economic slowdown and so far this fiscal, around 58 SEZ developers have surrendered their projects.  Further, imposition of Minimum Alternate Tax, Dividend Distribution Tax in 2011 and certain provisions in the proposed Direct Tax Code has also been denting the attractiveness of these units. During April-June period, exports from these zones stood at Rs 1.13 lakh crore as compared to Rs 4.05 lakh crore of country's overall exports in the reported period. Meanwhile, the government has announced various incentives like easing of land requirement norms to revive investor confidence in SEZs.

The CNX Nifty is currently trading at 6,110.45, up by 14.25 points or 0.23% after trading in a range of 6,124.10 and 6,082.90. There were 21 stocks advancing against 25 declines while 1 stock remained unchanged on the index.

The top gainers of the Nifty were TCS up by 4.50%, Wipro up by 3.00%, Ambuja Cement up by 2.26%, Bank of Baroda up by 1.55% and ACC up by 1.49%. On the flip side, Asian Paints down by 2.81%, Hindalco Industries down by 1.97%, BHEL down by 1.94%, Tata Steel down by 1.84% and Gail India down by 1.74% were the major losers on the index.

The Asian equity indices were trading mostly in red with Taiwan Weighted down by 0.90%, Straits Times down by 0.41% and Seoul Composite down by 0.23% while KLSE Composite up by 0.01%, Shanghai Composite was up by 0.43%.

Hong Kong, Indonesian and Japanese markets remained closed for the trade today on account of public holidays.

The European markets were trading in red; France’s CAC 40 was down 0.22%, Germany’s DAX lost 0.32% and UK’s FTSE 100 dropped 0.09%.