Local bourses cut back substantial portion of losses on positive October export data

Indian equity markets have cut back substantial portion of their losses after October’s Export data surprised investors positively, by jumping 13.47% at $27.27 billion and leaving country’s trade deficit in at $10.56 billion as compared to $20.21 billion a year ago. Meanwhile, bit of bargain hunting which got initiated at lower level also aided some recovery. Thus, after trading lackluster since early deals, Sensex has now reclaimed the crucial 20,600 level and Nifty is trading past 6,100 mark, albeit with loss of over quarter of a percent. Meanwhile, broader indices too has trimmed substantial portion of their losses.

On the global front, Asian shares were trading in mixed on Monday following positive economic data from the United States and China as the Communist Party meets to plot the course for the world’s second largest economy over the next decade. Investors were wary that a recovery could encourage the Federal Reserve to decide to reduce its enormous $85 billion a month asset-purchase program, which has flooded the international markets with extra cash, by the end of the year.

Closer home, stocks from Capital Goods, Realty and Public Sector Undertaking counters are the weak spells of the trade, dragging the benchmarks lower, while those from defensive Information Technology and Healthcare counter putting up tough face of resilience are restricting bourses’ losses. Information Technology stocks gained on account of Rupee’s depreciation to seven week low level on the back of dollar’s strength in the overseas market. The overall market breadth on BSE is in the favour of declines which have outnumbered advances in the ratio of 1150:955; while 121 shares remained unchanged.

The BSE Sensex is currently trading at 20606.72, down by 59.43 points or 0.29% after trading in a range of 20,623.83 and 20,482.41. There were 11 stocks advancing against 19 declining on the index.

The broader indices too trimmed some of their losses; the BSE Mid cap was down by 0.20%, Smallcap index edged lower by 0.10%.

The gaining sectoral indices on the BSE were IT up by 0.64%, Teck up by 0.54%, Healthcare up by 0.48%. While, Capital Goods down by 1.83%, Realty down by 1.67%, PSU down by 1.22%, Auto down by 0.96%, and Power down by 0.89% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.32%, Tata Steel up by 1.17%, TCS up by 1.14%, Maruti Suzuki up by 0.86% and Cipla up by 0.71%. On the flip side, L&T down by 2.42%, Hindalco Inds down by 2.32%, ONGC down by 2.29%, Tata Motors down by 2.13%, and Gail India down by 1.85%, were the top losers on the Sensex.

Meanwhile, in an attempt to restore normality, the Cyprus’ ministry of finance, in the wake of the Indian government unilaterally notifying Cyprus as a 'notified jurisdictional area' (NJA) on November 1, has issued formal release clarifying that the tax treaty between the two countries has not been terminated. The finance Ministry seeking to allay fears of those investing in India via the Mediterranean island nation, has issued this release and has also committed itself to finalizing the 'long pending review' of the India-Cyprus tax treaty. Following the Indian government’s notification, all payments made to Cyprus will attract 30% withholding tax and will include higher disclosure requirements and applicability of transfer pricing provisions among other things.

Nevertheless, Cyprus’ finance ministry as a damage control measure in its formal press release has underlined the excellent level of political relations it shares with India and its commitment to uphold the implementation of its international agreements. Further, the release also underscores that consultations between competent authorities of the two countries will take place in November itself.

Cyprus ranks seventh on the list of countries investing in India. From April 2000 to August 2013, Cyrus has nearly invested Rs 33,836 crore in India. However, India exercising its legislative powers for promoting transparency and preventing harmful tax competition took a tough stance of notifying Cyprus as a non-cooperative tax jurisdiction with immediate effect. 

The CNX Nifty is currently trading at 6,116.00, down by 24.75 points or 0.40% after trading in a range of 6,121.35 and 6,070.85. There were 16 stocks advancing against 34 declining on the index.

The top gainers of the Nifty were Cairn up by 2.17%, Tata Steel up by 1.34%, Dr Reddy’s Lab up by 1.33%, TCS up by 1.26%, and Cipla up by 0.66%. On the flip side, NMDC down by 2.74%, BPCL down by 2.71%, Indusind Bank down by 2.53%, L&T down by 2.52%, and ONGC down by 2.49% were the major loser on the index.

The Asian equity indices were trading in mixed; Straits Times up by 0.28%, KLSE Composite up by 0.02%, Hang Seng up by 0.66%, Nikkei 225 up by 1.30% and Shanghai Composite up by 0.31%. While, Jakarta Composite down by 0.74%, Taiwan Weighted down by 0.57% and Seoul Composite down by 0.38%.