Markets continue firm trade in afternoon session

Indian equity benchmarks continued to trade firm in afternoon session ahead of December F&O expiry amid buying witnessed in frontline blue chip stocks such as ONGC, Tata Power and Bharti Airtel. Investors’ sentiments got some support as Mauritius has put additional safeguards in place for global business companies operating from its jurisdiction to ensure their substantial presence in the country and to remove using 'proxy address' to benefit from tax treaties with India and other nations. Further, firm global cues also added to the optimistic sentiments. Consumer Durables was the top gainer with up by over 1.31% followed by power and capital goods stocks.

On stock specific movements, ONGC, Tata Power and Bharti Airtel were trading up by over 1.20%, while, Hero Motocorp, HDFC and RIL were trading down by over 0.50% on BSE. ONGC was trading higher by over 2.20% at around Rs 293 on reports that the petroleum ministry seeks to cut subsidy burden. Among other stocks, Shares in Liberty Shoes, extending its past six days' rally, has soared around 15% to nearly Rs 159, on back of heavy volumes. Dena Bank jumped  around 4.6% at around Rs 61.75 on BSE after the company in its extraordinary general meeting (EGM) on 24th December decided to issue 11.85 crore preferential shares to government at Rs 59.03/share.

On global front, Asian markets were trading in green with Hang Seng up by 1.13%, KLSE Composite up by 0.24%. Back home, the NSE Nifty and BSE Sensex were trading up their psychological 6,200 and 21,000 levels respectively. The market breadth on BSE was positive, out of 2,152 stocks traded, 1,419 stocks advanced, while 619 stocks declined on the BSE.  

The BSE Sensex is currently trading at 21,074.13 up by 41.42 points or 0.20% after trading in a range of 21,102.22 and 21,051.00. There were 22 stocks advancing against only 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.91%, while Small cap index up by 1.21%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.31%, Power up by 0.96%, Capital Goods up by 0.76%, Auto up by 0.61% and Metal up by 0.53%. There were no losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.26%, Tata Power up by 1.57%, Bharti Airtel up by 1.29%, NTPC up by 1.16% and Sun Pharma up by 1.10%. On the flip side, Hero Motocorp down by 1.17%, HDFC down by 0.59%, RIL down by 0.54%, ICICI Bank down by 0.44% and Dr Reddy’s Lab down by 0.32%.

Meanwhile, in order to plug loopholes to allay India's concerns over the misuse of the double taxation avoidance agreement (DTAA), Mauritius has put additional safeguards in place for global business companies operating from its jurisdiction to ensure their substantial presence in the country and to remove using 'proxy address' to benefit from tax treaties with India and other nations.

Mauritius' integrated financial sector regulator (FSC) has stated that despite removing tax benefits for business companies using proxy address, the move will also lead to the creation of more economic nexus between those companies and the economy of the island. The additional requirements being imposed on Global Business Category 1 companies as most global investors use GBC-1 route to make investments into India and other countries through Mauritius.

There have been concerns that Mauritius is being used for money laundering and round tripping of illicit funds as it accounts for almost half of the foreign money coming into India. Out of the $22.42 billion FDI inflow in FY13, India receives $9.49 billion from the Mauritius. The investors from the US, Europe and other places tend to route their capital flows into India through this Indian Ocean country to benefit from a favorable tax treaty and the ease of doing business here. Further, there has also been concern related to Mauritius based entities involved in some cases of corruption and alleged tax evasion, which were suspected to have been set up by Indian entities to dodge the tax authorities in India.

The CNX Nifty is currently trading at 6,284.30 up by 15.90 points or 0.25% after trading in a range of 6,291.20 and 6,270.05. There were 40 stocks advancing against 10 declining on the index.

The top gainers of the Nifty were BPCL up by 3.07%, ONGC up by 2.33%, Tata Power up by 1.68%, IDFC up by 1.13% and Bharti Airtel up by 1.12%. On the flip side, Hero Motocorp down by 1.21%, Reliance down by 0.79%, Power Grid down by 0.76%, DLF down by 0.56% and HDFC down by 0.54% were the major losers on the index.

The Asian equity indices were trading in green; Hang Seng up by 1.13%, KLSE Composite up by 0.24%, Straits Times up by 0.21%, Nikkei 225 up by 0.94% and Taiwan Weighted up by 0.21%. While, Seoul Composite down by 0.15% and Shanghai Composite down by 1.46%.