Benchmarks trim losses; trade continues in red

Indian equity markets trimmed their losses and continue to trade weak in late morning session on account of selling in frontline blue chip counters. Sentiments remained down-beat with the repot that the Finance Ministry has cut its ambitious disinvestment revenue target by 57% to Rs 30,000 crore for the current fiscal year. Despite missing targets in the past five years, the Centre had set an ambitious disinvestment revenue target of Rs 69,500 crore for FY16. But, strategic stake sales failed to take off and minority stake sales in PSUs also came to a halt after initial promise due to volatile markets. Besides, uncertainty over the GST Bill continues following the standoff between the government and the Congress. The winter session of the parliament ends on December 23, 2015. However, the broader markets were outperforming the benchmark indices, with the BSE mid-cap index advanced 0.3 per cent and the small-cap index jumped 0.54 per cent. Investors got some comfort on hopes of government getting three critical bills passed through the parliament including bankruptcy code, legislations on setting up of commercial courts and amendments to the Arbitration and Conciliation Act. Meanwhile, selling was witnessed in IT stocks like Infosys, TCS and Wipro on the back of sharp increase in US visa fees. Almost all Indian IT companies would pay between $8,000 and $10,000 per H-1B visa from April 1, when the next annual H-1B visa filing session starts, thus making it unsustainable for them. On the other hand, some buying was witnessed in telecom companies on the report that Telecom Regulatory Authority of India (TRAI) will come up with its recommendations on spectrum pricing for the next round of auction by mid-January. TRAI has floated a consultation paper on reference made by the government to suggest the base or floor price for all available airwaves for mobile services.

On the global front, Asian markets trading mostly in red as investors pondered the outlook for more economic stimulus from China. The Chinese government said it would be more proactive and flexible when it comes to using fiscal and monetary policy in order to keep growth in a proper range. US shares ended higher led by Apple and global IT major Microsoft along with healthcare stocks. Further, U.S. crude oil futures climbed 25 cents to $36.06 a barrel in electronic trading on the New York Mercantile Exchange. Back on street, stocks from Realty, Consumer Durables and Oil & Gas counters were supporting the markets’ uptrend, while those from FMCG, IT and TECK counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Tide Water Oil (India) have rallied after the company announced bonus issue and stock split plan. Further, Housing Development and Infrastructure (HDIL) has extended its previous day’s rally, after the company sold development rights of its land parcel at Kurla to DK Realty (India) for Rs 650 crore.

The market breadth on BSE was positive, out of 2290 stocks traded, 1412 stocks advanced, while 710 stocks declined on the BSE.

The BSE Sensex is currently trading at 25718.74, down by 17.16 points or 0.07% after trading in a range of 25485.17 and 25738.57. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.30%, while Small cap index up by 0.54%.

The top gaining sectoral indices on the BSE were Realty up by 1.46%, Consumer Durables up by 0.57%, Oil & Gas up by 0.49%, Power up by 0.44% and PSU up by 0.42%, while FMCG down by 0.53%, IT down by 0.53%, TECK down by 0.44% and Auto down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.21%, Sun Pharma up by 1.10%, Tata Steel up by 0.91%, NTPC up by 0.73% and SBI up by 0.63%. On the flip side, Mahindra & Mahindra down by 1.15%, Infosys down by 1.08%, TCS down by 0.91%, ITC down by 0.89% and Adani Ports &Special down by 0.81% were the top losers.

Meanwhile, In order to deal with the challenges related to the draw off of black money, Central Board of Direct Taxation (CBDT) has said that India is close to signing collaborative jurisdictional agreements with three countries – Singapore, the United Arab Emirates and Hong Kong. It is in the process and will come up with a revised note before December 31, 2015 which will provide guidance to financial institutions, regulators and tax department officers for ensuring compliance of norms.

CBDT said that though they have yet to sign the Multilateral Competent Authority Agreement (MCAA) for the AEOI, Dubai, Hong Kong and Singapore will fall under jurisdictions which have committed for AEOI from 2018. Once Singapore and the UAE sign the MCAA, India would be able to exchange information automatically with these countries from 2018 onwards, where as the treaty negotiation with Hong Kong is underway.

It further highlighted that once the AEOI will be implemented, it would enable India to receive information from every country in the world, including offshore financial centres and tax havens, and would be the key to prevent international tax evasion and avoidance, and would be instrumental in getting information about money stashed. AEOI will help create an environment of transparency between 75 countries that have signed the MCAA, including nations like Switzerland and the British Version Ireland (BVI) etc.

Further, in order to ensure confidentiality of data received from foreign countries that will ensure a transparent environment to deal with the problem and challenges of black money, CBDT has constituted an ‘Information Security Committee’. This will relate to processes such as ratification and information security policies and procedures (ISPP) to ensure implementation and management review. It will also focus on maintaining continuing suitability, adequacy and effectiveness of ISPP.

The CNX Nifty is currently trading at 7825.15, down by 9.30 points or 0.12% after trading in a range of 7802.00 and 7831.05. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 1.52%, Sun Pharma up by 1.26%, BPCL up by 1.06%, Vedanta up by 1.04% and Tata Steel up by 1.04%. On the flip side, Mahindra & Mahindra down by 1.43%, Infosys down by 1.23%, ITC down by 1.22%, TCS down by 1.08% and Adani Ports &Special down by 0.83% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 was down by 0.05%, Shanghai Composite down by 0.49%, Hang Seng down by 0.04%, Taiwan Weighted down by 0.11% and KOSPI Index was down by 0.18%. On the flip side, Jakarta Composite was up by 0.21% and FTSE Bursa Malaysia KLCI was up by 0.33%.