Benchmarks make gap-up opening; Nifty tops 5,700 mark

The Indian equity markets have made a gap-up opening on first day of new F&O series with frontline indices above their key resistance of 18,800 (Sensex) and 5,700 (Nifty) levels. The undertone remained upbeat on optimism that the Government will carry on its reforms agenda forward in the coming days and weeks. Corporate confidence also improved on the back of the slew of reforms announced by the government lately. The appreciation in rupee too buoyed the sentiments, rupee rose to a near five-month high on Friday after the government stuck to its fiscal second half borrowing and said it will not borrow more via bonds in the current year. The rupee rose to a high of 52.55, a level not seen since May 1. It was trading at 52.60/61 in recent trades versus 53.01/02 last close.

Global cues too remained supportive as the US markets bounced back overnight on the back of good jobless claims data, which came at two months low and Spain announcing its draft budget with a package of tax increases and spending cuts. While, most of the Asian counters were trading in the green at this point of time supported by gains in commodities stock and weak economic data signaling governments may have to do more to support their economies. Back home, the sentiments also got support on government’s decision of no extra borrowing in the current year. The finance ministry asserted its commitment to containing fiscal deficit by sticking to its borrowing target and said that government will borrow Rs 2 lakh crore in the remaining period of the current fiscal to stick to the target of 5.1 per cent of the Gross Domestic Product. Moreover, sustained buying in key heavyweights along with broader indices kept the markets on the positive side. Metal witnessed the maximum gain in trade followed by auto and consumer durables with no losers on the BSE sectoral space. The broader indices were going neck-to-neck with benchmarks. The market breadth on the BSE was positive; there were 1,161 shares on the gaining side against 339 shares on the losing side while 57 shares remain unchanged.

The BSE Sensex opened at 18,704.98; about 126 points higher compared to its previous closing of 18,579.50, and has touched a high and a low of 18,809.71 and 18,698.51, respectively.

The index is currently trading at 18,809.71, up by 230.21 points or 1.24%. All the 30 stocks were advancing on the Sensex.

The overall market breadth has made a strong start with 74.57% stocks advancing against 21.77% declines. The broader indices were trading in-line with benchmarks; the BSE Mid cap and Small cap indices surged 1.17% and 0.96% respectively. 

The top gaining sectoral indices on the BSE were, Metal up by 2.20%, Auto up by 1.88%, Realty up by 1.72%, CD up by 1.68% and Power up by 1.61%. While there were no losers on the index.

The top gainers on the Sensex were Tata Power up by 4.16%, Tata Motors up by 3.43%, Hindalco up by 2.79%, Tata Steel up by 2.50% and Jindal Steel up by 2.36% while, there were no losers on the index.

Meanwhile, with an aim to make the claim for tax benefit easier, Central Board of Direct Taxes (CBDT) has made it compulsory for all foreign investors, whomever claiming tax benefit  under the double taxation avoidance agreements (DTAAs) , to furnish a Tax Residency Certificate (TRC) from their home country. The amendments will be in force with effective from April 1, 2013, and will be applied in relation to assessment year 2013-14 and subsequent years. TRC for availing tax benefits was proposed in the 2012-13 budget. Apart from foreign investors in India, Indian companies having overseas operations would also get benefited by this move. The prescribed format will also enable foreign residents to know the essentials required to claim tax credits, well in advance.

The TRC to be obtained by the assessee for claiming tax benefits is mandatory to have the name of the assessee along with status, that whether it is an individual or a company and the nationality, in case of individual and incase of company or firm, the country wherein it is registered or incorporated. Besides, the certificate should be incorporated with the tax identification number (TIN) of the assessee, its residential status for the purposes of tax, the period for which the TRC is applicable and the address of the assessee for that period.

Apart from that, assessee has to assure that the certificate is duly verified by the government of the country or the specified territory of which the assessee claims to be a resident for the purposes of tax. The main purpose of TRC is to ensure that the taxpayer, who is resident of one of the contracting countries to the treaty, can claim applicability of beneficial provisions of either of treaty or of the domestic law.

The S&P CNX Nifty opened at 5,684.80; about 35 points higher compared to its previous closing of 5,649.50, and has touched a high and a low of 5,715.25 and 5,683.45 respectively.

The index is currently trading at 5,715.20, higher by 65.70 points or 1.16%. There were 49 stocks advancing against only 1 decline on the index.

The top gainers of the Nifty were Tata Power up by 4.07%, Jindal Steel up by 3.69%, Tata Motors up by 3.37%, Hindalco up by 3.13% and JP Associates up by 2.79%.

On the flip side, Lupin was down by 0.51%, was the lone loser on the index.

Most of the Asian peers were trading in the green; Shanghai Composite was up by 21.53 points or 1.05% to 2,077.85, Hang Seng gained 108.81 points or 0.52% to 20,871.10, Jakarta Composite was up by 21.60 points or 0.51% to 4,245.90, KLSE Composite added 10.20 points or 0.62% to 1,637.99, Straits Times gained 9.68 points or 0.32% to 3,068.68, Kospi Composite added 4.45 points or 0.22% to 1,993.66 and Taiwan Weighted was higher by 4.94 points or 0.06% to 7,688.61.

On the other hand, Nikkei 225 was the lone loser, down by 78.87 points or 0.88% to 8,871.00.