Post Session:Quick Review

Indian markets went through the volatility which is usual towards the end of the monthly derivatives contract. Though, the benchmarks slipped into red for a couple of time and it looked that position unwinding may lead the markets lower for the day but bounce back was instant and the markets recovered from their lows on short covering to end higher by around a quarter percent. Traders were getting support as overseas investors have been net buyers over the last nine sessions, while the rupee too continued its surge, aiding the sentiments.

Earlier the markets made a positive start tailing the overnight gains in the US markets on hopes that Fed Chair Janet Yellen may not continue tapering in the face of the weak economic data. However, the Asian markets after a choppy trade made a mixed closing, while the Japanese market ended with good gains, the mainland China and Hong Kong markets remained under pressure  as yuan tumbled the most in more than three years on speculation the central bank wants an end to the currency’s steady appreciation. The European markets too made a mixed start on getting some weak set of earnings.

Back home, the markets managed a positive close, extending their winning streak for the third straight session with benchmarks ending near their crucial levels of 20850 (Sensex) and 6200 (Nifty). Though, there were rounds of volatility but markets remained in tight range of 100 points Sensex and 50 points Nifty. In early trade, market men increased their bet taking cues from the latest survey of National Council of Applied Economic Research (NCAER), which said that after a slide in the second quarter of the current fiscal, higher exports, enhanced farm produce and moderation in inflation improved business confidence during the October-December period. The Business Confidence Index (BCI) rose by about 21.8 percent to 122.3 points from 100.4 in July-September quarter, 2013-14. Metal sector concerned over the Chinese growth, remained the major laggard of the day. There was some weakness in banking and oil & gas sector too, but the markets got major relief from the surge in the consumer durables which gained around three percent on BSE. The IT and tech stocks too were in upbeat mood despite weak economic reports from the US and strength in rupee. The banking sector made a good recovery in the last but ended marginally in red on the BSE, however the Non Banking Finance companies, especially the banking licence aspirants remained in jubilant mood on reports that the Jalan committee, which is scrutinizing applications for new bank licences, after its final meeting and if there is a consensus among all the members, will submit the list of the short-listed candidates to the RBI today.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1310: 1348, while 162 scrips remained unchanged. (Provisional)

The BSE Sensex gained 32.65 points or 0.16% to settle at 20844.09. The index touched a high and a low of 20912.54 and 20777.73 respectively. Among the 30-share Sensex, 14 stocks gained, while 16 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.29% and 0.10% respectively. (Provisional)

On the BSE Sectoral front, Consumer Durables up by 2.98%, IT up by 0.84%, Teck up by 0.81%, Capital Goods up by 0.58% and Auto up by 0.56% were the top gainers, while Metal down by 1.85%, PSU down by 0.56%, Power down by 0.41%, Oil & Gas down by 0.17% and Bankex down by 0.16% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Wipro up by 2.82%, Bajaj Auto up by 2.14%, BHEL up by 2.01%, Cipla up by 1.74% and Bharti Airtel up by 1.36%, while, Tata Steel down by 2.38%, SSLT down by 2.37%, Coal India down by 2.36%, Tata Power down by 2.06% and Gail India down by 1.42% were the top losers in the index. (Provisional)

Meanwhile, in a bid to improve the country’s tax administration, the Tax Administration Reform Commission (TARC) Chairman Parthasarathi Shome has asserted that TARC’s proposed reforms will be mainly focused on expansion of tax and taxpayers’ base. Tax administration has to be cost effective and efficient and TARC’s recommendations will help to correct anomalies and approaches of a system that increases compliance. The TARC chairman further added that the commission has been studying the existing organisational structure and systemic processes to enhance tax administration’s capacity and skill base so that it can handle increasing tax base with greater efficiency, swiftness and lesser disputes.

The commission has planned to provide its recommendations through five reports and the first report will be submitted to the Government in May. Referring to TARC’s first report, Parthasarathi Shome asserted that first report would suggest various changes such as strengthening of workforce, capacity building, use of information technology, fixing of responsibility and accountability to bring down compliance cost and improve administration’s productivity. The TARC in its first report would also recommend measures for minimising disputes, simplified and timely disbursal of duty drawback, export incentives, improving services and taxpayers’ education programme.

The TARC Chairman further added that in next four more reports after the first, the commission would recommend steps to improve cross border information exchange and functional measures to enhance information sharing among the enforcement agencies. Furthermore, it would also provide analytical tools to prevent tax and economic offences.

India VIX, a gauge for markets short term expectation of marginally lost 2.83% at 13.95 from its previous close of 14.36 on Monday. (Provisional)

The CNX Nifty gained 10.95 points or 0.18% to settle at 6,197.05. The index touched high and low of 6,216.85 and 6,176.60 respectively. Out of the 50 stocks on the Nifty, 25 ended in the green, while 24 ended in the red and one stock remain unchanged.

The major gainers of the Nifty were Wipro up 3.00%, Bajaj-Auto up by 2.40%, Ambuja Cements up by 2.12%, BPCL up by 2.02% and BHEL up by 1.88%. The key losers were NMDC down by 2.99%, SSLT down by 2.50%, Tata Steel down by 2.46%, Coal India down by 2.44% and Tata Power down by 2.35%. (Provisional)

The European markets were trading in red; France’s CAC 40 was down 0.40%, Germany’s DAX was down 0.33% and UK’s FTSE 100 dropped 0.58%.

The Asian markets concluded Tuesday’s trade on a mixed note, with Nikkei average advancing to a four-week closing high after a rally in Wall Street shares. Indonesia’s rupiah advanced to the strongest level since November as a rally in Asian stocks fueled optimism that capital inflows into the region are increasing. Foreign holdings of local-currency government debt climbed 12.3 trillion rupiah ($1.1 billion) this month through February 20, set for the biggest increase since October. Hong Kong Trade Balance rose to a seasonally adjusted -20.0B, from -54.4B in the preceding month. Japan’s Corporate Services Price Index fell to a seasonally adjusted annual rate of 0.8%, from 1.1% in the preceding month whose figure was revised down from 1.3%.

China’s commerce ministry stated that the country is cautiously optimistic about expanding its trade this year after both exports and imports performed well in January. In US dollar terms, China’s trade jumped 10.3% from a year earlier in January, with exports rising 10.6% and imports up 10%. The per capita disposable income in China grew 10.9% from a year earlier to 18,311 yuan ($2,993) in 2013. Excluding price factors, the income rose 8.1% year on year.