Markets start new series on a positive note

Indian equity benchmarks have kick started the new F&O series on a positive note with frontline gauges recapturing their crucial 6,300 (Nifty) and 21,150 (Sensex) levels supported by sanguine global cues. Overnight, the US markets continued their bull run after the Christmas break, following upbeat jobs data as Labor Department reported a steep drop in weekly jobless claims in the week ended December 21st. Moreover, Asian markets too were trading mostly in the green terrain at this point of time tracking firm cues from Wall Street.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Rally in power space too supported the sentiments, as the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Manmohan Singh, relaxed the coal tapering linkage policy for nine power projects with investments worth Rs 60,000 crore. Meanwhile, sugar stocks too remained on the buyers’ radar as the cabinet okayed guidelines for interest-free loan to sugar mills, making it clear to sugar mill owners that the interest-free loan of Rs 6,600 crore is meant “exclusively” to pay the cane price including arrears to farmers.

All the sectoral indices on the BSE were trading in the green with realty and software segments gaining the most. Technology, consumer durables, banking, metal and capital goods too were trading with significant gains. The broader indices were going neck-to-neck with benchmarks, while the market breadth on the BSE was positive; there were 853 shares on the gaining side against 408 shares on the losing side while 62 shares remain unchanged.

The BSE Sensex opened at 21114.49; about 39 points higher compared to its previous closing of 21074.59, and has touched a high and a low of 21217.12 and 21113.25 respectively. The index is currently trading at 21191.88, up by 117.29 points or 0.56%. There were 25 stocks advancing against just 5 declines on the index.

The overall market breadth has made a strong start with 64.47% stocks advancing against 30.84% declines. The broader indices too were trading in green; the BSE Mid cap index up by 0.50% and Small cap index up 0.38%. 

The top gaining sectoral indices on the BSE were, Realty up by 1.54%, IT up by 1.11%, Teck up by 0.99%, Consumer Durables up by 0.78% and Bankex up by 0.73%, while there were no losers on the sectoral index.

The top gainers on the Sensex were SSLT up by 1.68%, Infosys up by 1.40%, SBI up by 1.37%, Wipro up by 1.20% and L&T up by 1.08%. On the flip side, BHEL was down by 0.97%, Maruti Suzuki was down by 0.75%, ONGC was down by 0.24%, Mahindra & Mahindra was down by 0.11% and Hero MotoCorp was down by 0.08% were the top losers on the Sensex.

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 opened at 6,292.80; about 13 point higher as compared to its previous closing of 6,278.90, and has touched a high and a low of 6,319.35 and 6,289.40 respectively.

The index is currently trading at 6,311.25, up by 32.35 points or 0.52%. There were 37 stocks advancing against 12 declines and one stock remains unchanged on the index.

The top gainers of the Nifty were DLF up by 2.23%, SSLTup by 1.55%, NMDC up by 1.51%, SBI up by 1.40% and Infosys up by 1.20%. On the flip side, BHEL down by 1.09%, Maruti Suzuki down by 0.90%, Lupin down by 0.44%, M&M down by 0.35% and Ambuja Cements down by 0.33% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 17.49 points or 0.84% to 2,090.59, Hang Seng increased 67.10 points or 0.29% to 23,246.65, Jakarta Composite jumped 24.38 points or 0.58% to 4,227.21, KLSE Composite strengthened 14.88 points or 0.81% to 1,858.98, Straits Times surged 16.67 points or 0.53% to 3,151.03, Seoul Composite added 3.91 points or 0.20% to 2,003.21 and Taiwan Weighted was up by 38.59 points or 0.45% to 8,524.48.

On the flip side, Nikkei 225 was down by 68.06 points or 0.42% to 16,106.38.