Benchmarks end choppy trade almost flat

After hitting fresh all time closing highs in last session, Indian equity benchmarks witnessed consolidation on Tuesday. Domestic bourses traded in very-tight band throughout the session and ended the choppy day of trade almost flat. Overall, sentiments remained cautious after the Election Commission sought deferment of the price hike till elections are over. It has been reported that after deliberating gas pricing once again and taking into account government’s version, the EC decided to defer a decision on the contentious issue as the matter was pending in the SC. Meanwhile, the Commerce and Industry Ministry too is concerned over whether its proposals for easing foreign direct investment (FDI) rules in railways and construction development sectors will get EC nod.

On the positive front, Economic Affairs Secretary Arvind Mayaram stated that the Finance Ministry expects economic growth to further improve in the next fiscal on the back of better macro-economic fundamentals. Appreciation in Indian rupee too encouraged the equity markets after it turned to more than seven months high. The rupee was trading at 60.48/49 after hitting 60.47, its highest since August 12 and above its close of 60.77/78 on Monday as dollar selling by custodian banks continued to help. Sentiments also remained up-beat on report that foreign institutional investors (FIIs) bought shares worth a net Rs 1465.62 crore on March 24, 2014.

On the global front, the US markets ended lower overnight, offsetting some strength that was seen last week after the release of a report from Markit Economics showed that US manufacturing activity fell by more than expected in March. Asian markets too ended mostly in the red as investors weighed the prospect of a recession in Russia. However, European counters traded with traction in early deals, as investors waited for fresh US housing and confidence data to gauge if the US economy is recovering from the extreme winter.

Back home, there was some weakness seen in the stocks hopeful for new banking licenses as the Election Commission may put its spanner in granting of banking licenses by the Reserve Bank of India (RBI) till the election is over. Software and Technology counters too witnessed selling pressure as rupee edged higher against the dollar. On the flip side, shares of tyre companies like, Ceat, Goodyear India, JK Tyre, Apollo Tyres and TVS Srichakra continued their northward journey and edged higher in the range of 1-7 percent with heavy volumes, on hopes of higher margins due to fall in rubber prices. Additionally, stocks related to fertilizers space too remained on buyers’ radar on reports the Election Commission has ordered deferment of an increase in gas prices that was to take effect from April 1, 2014.

The NSE’s 50-share broadly followed index Nifty rose by just over six points to end near its psychological 6,600 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex ended almost flat and managed to finish above the psychological 22,050 mark. Broader markets, however, outperformed benchmarks and ended the session comfortably in the green terrain. The market breadth remained in favor of decliners, as there were 1,207 shares on the gaining side against 1,658 shares on the losing side while 163 shares remain unchanged.

Finally, the BSE Sensex was down by 0.27 points to settle at 22055.21, while the CNX Nifty added 6.25 points or 0.09% to settle at 6,589.75.

The BSE Sensex touched a high and a low of 22079.96 and 21916.87, respectively. The BSE Mid cap index was up by 0.61%, while the Small cap index gained 0.16%.

The top gainers on the Sensex were BHEL up by 4.41%, Hero MotoCorp up by 3.06%, Hindustan Unilever up by 1.73%, L&T up by 1.47% and Tata Power up by 1.24%, while RIL down by 2.87%, Wipro down by 2.58%, SSLT down by 1.55%, Mahindra & Mahindra down by 1.17% and Dr Reddys Lab down 1.01% were the top losers in the index.

On the BSE Sectoral front, Power up by 1.92%, Capital Goods up by 1.67%, Consumer Durables up by 1.31%, Realty up by 1.30% and PSU up by 0.82% were the top gainers, while Oil & Gas down 1.46%, IT down by 0.77%, Teck  down by 0.56% and Healthcare down by 0.06% were the only losers in the space.

Meanwhile, the Central Board of Direct Taxes (CBDT) expressed confidence to acheive the revised tax target set in February. At the interim Budget during February this year, the direct tax collection target for 2013-14 was lowered by Rs 32,000 crore to Rs 6.32 lakh crore from 6.68 lakh crore set earlier. As on March 22, net direct collections stood at 5.82 lakh crore which was around Rs 50,000 crore lower from the revised target.

CBDT Chairman R K Tewari has said that tax department is taking more steps to garner Rs 50,000 crore of which some amount is to be received by way of advance tax, particularly from the corporates. He further added that the department has also launched a number of searches and survey operations across the country to clamp down on cases of tax evasion which has resulted in a number of entities declaring their hidden incomes and remitting the money in government treasury.

The overall advance tax collection as on March 22 increased by 8.7 percent to Rs 2,90,323 crore this financial year as against Rs 2,66,192 crore in year ago period. Corporate advance tax collection till March 22 grew by 10.8 percent to Rs 2,44,396 crore, while, personal advance tax grew by 11.2 per cent to Rs 45,927 crore. Furthermore, 2.56 crore online Income Tax returns were filed during the reported period, which is 40 per cent higher than same period in the last fiscal. The total refund payout by the department as on March 22 this fiscal stood at Rs 84,993 crore, a 5.3 per cent increase over Rs 80,729 crore paid last fiscal. Tax revenue collection is the main source of income for the government, which is struggling with the high fiscal deficit.The CNX Nifty touched a high and low of 6,595.55 and 6,544.85 respectively.

The top gainers of the Nifty were BHEL up by 4.23%, DLF up by 3.61%, Hero MotoCorp up by 3.07%, Jindal Steel & Power up by 2.87% and Ranbaxy Laboratories up by 2.48%. On the other hand, Reliance Industries down by 3.05%, Wipro down by 2.75%, Ambuja Cements down by 1.85%, SSLT down by 1.77% and Mahindra & Mahindra down 1.48% were the top losers.

The European markets were trading in green, France's CAC 40 was up by 1.09%, Germany's DAX was up by 1.14% and United Kingdom's FTSE 100 was up by 1.07%.

The Asian markets concluded Tuesday’s trade mostly in red due to weak US manufacturing survey and worries over Ukraine crisis soured sentiment. New home transactions in Shanghai were little changed from a week ago while their average price fell due to higher sentiment in the mid- to low-end segment. The sales of new homes, excluding government-funded affordable housing, dipped 0.5% to 198,800 square meters last week while their average cost shed 11.4% to 25,097 yuan ($4,048) per square meter.

Hong Kong Trade Balance fell to a seasonally adjusted -53.7B, from -20.0B in the preceding month. Indonesia’s business sector continues to show optimism as regulatory reform and a strengthening rupiah is expected over the next five years. A survey by credit rating agency Fitch Ratings showed a positive and upbeat view on the economy and business environment this year despite elections that traditionally become a cause for caution.