Post session - Quick review

Barometer gauges after day of break, resumed trade with vigor amidst cautious optimism that recent credit warning by Standard & Poor's (S&P) would spur European leaders into taking more decisive action at European Union summit later this week, where policymakers are expected to find a way to end the region's two-year-old debt crisis.   Indian equity markets remained closed on Tuesday for a holiday. The credit rating agency placed 15 of the 17 countries that use the euro on a negative credit watch, the likes of which included France and Germany. However, Standard & Poor's today said a plan by France and Germany to increase fiscal integration in Europe is 'promising' and could help avoid a mass debt downgrade of euro zone countries. At the summit on Thursday and Friday, France and Germany are expected to try to force changes to EU rules to penalize countries that exceed deficit targets in hopes of restoring market confidence.

Back on the home turf, though benchmarks in the dying hour relinquished significant portions of gains as the barometer indices once marching past the crucial psychological level of 17k for Sensex and 5050 for Nifty recoiled significantly. Profit booking after the massive rally in early hours of trade mainly took the strength of the bourses.

However, the session remained quite action pact, as the retail stocks, which tumbled marking their 11th consecutive fall after opposition party agreed to government offer to hold back Foreign Direct Investment (FDI) in retail, bounced back on the hopes that FDI retail policy may not be watered down. Building on hopes, Vishal Retail and Koutons Retail rose over 0.50%. Meanwhile, Pantaloon Retail (India) and CESC, which runs Spencer retail, gained traction in the range of 4-6%.

Besides retail, telecom stocks failed to gain traction even after Prime Minister Manmohan Singh’s assurance of addressing telecom’s concerns soon. His comments came against the backdrop of his meeting last week with the heads of five top private sector telecom companies in India, who expressed concern over lack of available spectrum and the ban on sharing these precious airwaves among them. Idea Cellular and Bharti Airtel lost over 5% and 3% respectively. However, bucking the trend, Reliance Communication rang loud with gains of over 3%.

Meanwhile, airline stocks like-Kingfisher Airline, Spicejet and Jet Airways reversed gears to fly high post finance ministry approval of a draft Cabinet note floated by the commerce and industry ministry allowing foreign fliers to acquire up to 26 percent stake in India's aviation companies.

On the global front, Asian shares closed mostly in green bolstered by Australia's stronger-than-expected third quarter growth. The Australian Bureau of Statistics reported on Wednesday that the nation's gross domestic product rose by 1 percent in the three months to September 30 from the previous quarter, due to its booming mining industry. However, European shares which stroke a 5 week high in early deals, surely acted as power booster for Dalal Street. Meanwhile, sentiment also got a push after Finance Minister Mukherjee said that India will roll out a long-awaited direct tax code, on April 1, 2012. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1369:1406 while 151 scrips remained unchanged.

The BSE Sensex gained 16.63 points or 0.10% and settled at 16,821.96. The index touched a high and a low of 17,003.71 and 16,781.62 respectively. 17 stocks advanced against 12 declining ones while 1 stock remained unchanged on the index (Provisional)

The BSE Mid-cap index gained 0.08% while Small-cap index was up by 0.13%. (Provisional)

On the BSE Sectoral front, IT up 1.39%, Capital Goods up 0.68%, FMCG up 0.62%, Realty up 0.52% and TECk up 0.40% were the top gainers while HealthCare down 1.70%, Consumer Durables down 0.89%, Power down 0.76%, PSU down 0.66% and Bankex down 0.40% were the top losers.

The top gainers on the Sensex were, Wipro up 2.98%, Infosys up 1.85%, HDFC up 1.61%, L&T up 1.19% and JP Associates up 1.16%.

On the flip side, NTPC down 3.81%, Bharti Airtel down 3.69%, Sun Pharma down 2.67%, Coal India down 2.57% and ICICI Bank down 1.97% were the top losers on the index. (Provisional)

Meanwhile, Finance Minister Pranab Mukherjee has articulated hope that the Direct Taxes Code (DTC) will come into force from next financial year. The proposed DTC bill, seeks to modernize Indian tax system by replacing five decade old Income Tax Act, which was introduced in 1961. He said, ‘the proposed Direct Taxes Code brings together the policy initiatives on direct taxes. It is slated to come into force from the next financial year.’

On the issue of indirect tax reforms, Mukherjee said, ‘we are moving towards an economy-wide, generalised value-added tax system of Goods and Service Taxes (GST) at all levels in the country. The GST is a Value Added Tax (VAT), which is also going to be implemented from next financial year, will replace all indirect taxes levied on goods and services by central and state governments.

Referring to tax reforms within the country, Mukherjee said, the tax reforms are aimed at rationalization of tax rates, broadening of the tax base, special focus on sunrise areas like transfer pricing and international taxation, and strengthening of the tax information exchange network. The progressive personal income tax policy has resulted in a ten-fold increase in revenue collections, which went up from $8.62 billion in 1996-97 to $87 billion in 2010-11.

Finance minister also called for greater international cooperation to deal with the problem of tax evasion and black money. With reference to strategies adopted by the Indian government to deal with the issue of tax evasion and black money, he said, tax evasion undermines the intended benefits of a progressive tax policy. By adding further he said, ‘resolution of these issues requires international cooperation and alignment of tax systems for better cross-border compliance.’

On the global financial integrity report, minister said annual illicit outflows from emerging economies and developing countries average between $725 billion and $810 billion.

India VIX, a gauge for market’s short term expectation of volatility gained 5.75% at 26.46 from its previous close of 25.02 on Monday. (Provisional)

The S&P CNX Nifty gained 6.30 points or 0.13% to settle at 5,045.45. The index touched high and low of 5,099.25 and 5,032.25 respectively. 28 stocks advanced against 22 declining ones on the index. (Provisional)

The top gainers on the Nifty were RCOM up 4.01%, Wipro up 3.29%, HCL Tech up 2.35%, Infosys up 2.07% and Reliance Infra up 2.00%.

On the other hand, NTPC down 3.92%, Bharti Airtel down 3.56%, Coal India down 2.97%, Sun Pharma down 2.74% and Sesa Goa down 2.50% were the top losers. (Provisional)

The European markets are trading in green, with France's CAC 40 up 1.15%, Germany's DAX up 1.00% and FTSE 100 up 0.62%.

Asian markets resumed their northward journey after a day’s halt and major indices snapped the session with gains of 1-2 percent on Wednesday on hopes that a meeting of European leaders will finally lead to a plan that will bring an end to the crippling euro-zone debt crisis. Investors were eying two-day summit that begins on December 9, 2011 with expectations growing that a plan for fiscal integration set out by the leaders of France and Germany will be largely agreed on. Confidence was also lifted by reports that European officials are discussing plans to possibly implement two separate bailout funds to tackle the region’s debt crisis.

Chinese benchmark closed up 0.3 percent, snapping three days of losses as Chinese banks, insurers and property developers outperformed on hopes of more policy easing by Beijing after last week’s cut in the reserve requirement ratio. Meanwhile, Japanese Nikkei remained the top gainer among the Asian pack, up by 1.71 percent as cyclical shares such as shippers and steelmakers helped in making huge gains after recent credit easing by big emerging economies such as China and Brazil eased worries about a sharp slowdown in the global economy.