The relief rally finally came through on Wednesday as marketmen enthusiastically resorted to hunt for undervalued fundamentally strong bargains amid evaporating jitters over US sovereign debt rating downgrade. The bounce back came after six successive sessions of downtrend in which the BSE's Sensex suffered a gargantuan loss of close to one thousand five hundred points while the NSE's Nifty suffered staggering losses of around four hundred fifty points amid the ongoing pandemonium on both sides of the Atlantic which had shaken investor sentiment across the world. But sentiments remained positive since the start of trade on Wednesday as investors welcomed Fed's announcement overnight to keep the interest rates unchanged at ultra low levels through mid 2013. While, the Fed statement that it was reviewing available tools to boost the slowing US economy also bode well for local investors as it indicated that policy makers will take steps to spur growth and restore investor confidence amid the global market turmoil. However, the markets in Europe were volatile amid considerable uncertainty as investors speculated that it would take a slew of good economic news before the markets stabilized. On the domestic front, India's direct tax collection showed a significant increase of 26% to Rs 21,400 crore in July 2010 from Rs 16,972 crore in July 2010 mainly due to fall in the tax refunds, allaying the fears of slowdown in domestic economic growth. However, the reports of fall in domestic passenger cars sales numbers, which during the month of July 2011 declined by 15.76% compared July 2010, highlighted the adverse impact of RBI's non-stop rate hike. Nonetheless, the frontline indices managed to stage a smart performance in the session amid high volatility and reclaimed the psychological 5,150 and 17,100 levels. There were some hiccups in an otherwise heartening day of trade, when reports of fresh geo-political tensions fuming between South Korea and North Korea emerged, but investors did not show any kind of fumble on the reports. Meanwhile, pessimists were of the belief that the local benchmarks are not likely to be on a sustained northward journey as there is no clarity over the direction of global markets, and volatility remains a concern.
Earlier on Dalal Street, the benchmark jumped nearly four hundred points or over two percent on the opening bell in line with Asian markets as the US Federal Reserve pledged to keep interest rates on hold. The frontline indices managed to hold on to the momentum for most part of the morning session but reports of South Korean military firing two artillery rounds after hearing three explosions coming from the North near the disputed sea border, brought the indices off the day's highest levels. Thereafter, heightened volatility evident in European markets and US futures pulled the local indices to the lowest levels in the session. But value picking intensified in the dying hours of trade helping the benchmarks in breaking the six session downtrend and staging a strong performance. Eventually the NSE's 50-share broadly followed index Nifty, surged by over one and half a percent to settle above the crucial 5,150 support level while Bombay Stock Exchange's Sensitive Index, Sensex amassed over two hundred fifty points and ended above the psychological 17,100 mark. The broader markets too traded with conviction after the recent butchery and outclassed their larger peers by quite a margin. On the sectoral front, the rate sensitive counters like Automobile and high beta Real Estate garnered maximum traction after being badly butchered in the recent past. Information Technology, another oversold pocket, bounced back on hefty short covering as the overnight surge in US and European markets helped improve sentiments. On the other hand, the FMCG counter languished at the bottom of the table with 0.47% losses after heavyweights like ITC, HUL and Nestle plummeted in the session. The downstream PSU oil companies like IOC, HPCL and BPCL also remained under tremendous selling pressure because of the overnight spike in international crude oil prices. The markets soared on weaker volumes of over Rs 1.40 lakh crore while the turnover for NSE F&O segment also remained on the lower side compared to Tuesday at over 1.2 lakh crore. The market breadth too remained optimistic as there were 2205 shares on the gaining side against 696 shares on the losing side while 84 shares remained unchanged.
Finally, the BSE Sensex surged 272.60 points or 1.62% to settle at 17,130.51, while the S&P CNX Nifty soared by 88.15 points or 1.74% to close at 5,161.00.
The BSE Sensex touched a high and a low of 17,256.46 and 17,022.25, respectively. The BSE Mid cap and Small cap indices were up by 2.31% and 2.46% respectively.
The top gainers on the Sensex were Tata Motors up 6.08%, Maruti Suzuki up by 5.95%, Hindalco Inds up by 5.24%, Mahindra & Mahindra up by 5.03% and DLF up 4.31%. On the flip side, ONGC down 2.22%, ITC down 1.15%, Hindustan Unilever down 0.95%, Sun Pharma down 0.68% and Tata Power down 0.54% were the top losers on the index.
The major gainers on the BSE sectoral space were Auto up by 4.17%, Realty up by 2.98%, Consumer Durables (CD) up by 2.61%, IT up by 2.41% and Bankex up by 2.39%. While, FMCG down 0.47% and Oil & Gas down 0.19% were the top losers on the BSE sectoral space.
Meanwhile, allying the fears of slowdown in economic growth, the revenue collections have shown significant increase in the month of July. The direct tax collection increased by 26% to Rs 21,400 crore in July 2010 from Rs 16,972 crore in July 2010 mainly due to fall in the tax refunds. The tax refunds reduced to Rs 7,000 crore compared to previous month of current fiscal.
In April to July 2011 the indirect tax collections have increased by 27% to Rs 1,25,901 crore from Rs 99,057 crore in April to July 2010. This increase in the indirect tax collection was led by service sector which jumped by 54.7 % to Rs 7,783 crore in July 2011 from Rs 5,030 crore in July 2010. During April to July 2011, service tax collection increased by 37.7 % to 27,454 crore from 19,934 crore in corresponding period of last year.
However, the direct tax collection fell by the 8% to Rs 79,000 in April to July 2011 from Rs 85,647 in April to July 2010, mainly due to higher tax refunds. During the April to July 2011 the total refunds stood at Rs 53,000 crore which is less than the Rs 57,000 crore of refunds issues in the entire 2010-11.
Despite the removal of custom and excise duty on petroleum products in month of June 2011, the collection of custom and excise duties have surged by 11% and 4.7% respectively. During April to July 2011 revenue collection from custom duty increased by 30.5% to Rs 50,705 crore from Rs 38,840 in April to July 2010. The excise duty also registered healthy growth in term of revenue collection, it surged by 18.6 % to Rs 47, 757 crore from Rs 40, 283 crore in April to July 2011.
In the month of July, the finance ministry incurred loss of around Rs 1,600 crore and Rs 1,400 crore respectively with removal of excise and custom duties on diesel and petroleum products. The growth in excise and customs without the duty cut would have been about 18% and 25%, respectively.
The indirect tax receipts in first four months of 2011-12 are about 32% of the Budget Estimate of Rs 3,92,908 crore. The indirect tax mop-up in April to July increased 16.4 % to Rs 31,493 crore. On the other hand, the direct tax collection for the first four months of 2011-12 is just above 15 % of the Budget Estimate of Rs 5,32,651 crore for the current fiscal year.
Central Board of Excise & Customs chairman S Dutt Majumder, said, "This is a good showing despite the duty cuts. It shows manufacturing is not doing that bad. In service tax, we cannot expect the same kind of growth in the coming months but it may still grow at 30-35 %."
Majumder further said the huge jump in service tax collections was due to the introduction of Point of Taxation Rules where the assessee has to pay service tax on accrual basis to the government in advance.
The S&P CNX Nifty touched high and low of 5,197.95 and 5,123.35, respectively.
The top gainers of the Nifty were Tata Motors up 6.04%, Maruti Suzuki up 5.78% DLF up 5.41%, Hindalco up 5.10% and M&M up 4.82%.
On the flip side, Grasim down 2.53%, ONGC down 2.14%, ITC down 1.68%, Cairn down 1.46 and Ranbaxy down by 1.30% were the top losers on the index.
The European markets were trading in green. France's CAC 40 gained 0.24%, Britain's FTSE 100 higher by 1.13% and Germany's DAX surged by 2.15%.
Earlier on Dalal Street, the benchmark jumped nearly four hundred points or over two percent on the opening bell in line with Asian markets as the US Federal Reserve pledged to keep interest rates on hold. The frontline indices managed to hold on to the momentum for most part of the morning session but reports of South Korean military firing two artillery rounds after hearing three explosions coming from the North near the disputed sea border, brought the indices off the day's highest levels. Thereafter, heightened volatility evident in European markets and US futures pulled the local indices to the lowest levels in the session. But value picking intensified in the dying hours of trade helping the benchmarks in breaking the six session downtrend and staging a strong performance. Eventually the NSE's 50-share broadly followed index Nifty, surged by over one and half a percent to settle above the crucial 5,150 support level while Bombay Stock Exchange's Sensitive Index, Sensex amassed over two hundred fifty points and ended above the psychological 17,100 mark. The broader markets too traded with conviction after the recent butchery and outclassed their larger peers by quite a margin. On the sectoral front, the rate sensitive counters like Automobile and high beta Real Estate garnered maximum traction after being badly butchered in the recent past. Information Technology, another oversold pocket, bounced back on hefty short covering as the overnight surge in US and European markets helped improve sentiments. On the other hand, the FMCG counter languished at the bottom of the table with 0.47% losses after heavyweights like ITC, HUL and Nestle plummeted in the session. The downstream PSU oil companies like IOC, HPCL and BPCL also remained under tremendous selling pressure because of the overnight spike in international crude oil prices. The markets soared on weaker volumes of over Rs 1.40 lakh crore while the turnover for NSE F&O segment also remained on the lower side compared to Tuesday at over 1.2 lakh crore. The market breadth too remained optimistic as there were 2205 shares on the gaining side against 696 shares on the losing side while 84 shares remained unchanged.
Finally, the BSE Sensex surged 272.60 points or 1.62% to settle at 17,130.51, while the S&P CNX Nifty soared by 88.15 points or 1.74% to close at 5,161.00.
The BSE Sensex touched a high and a low of 17,256.46 and 17,022.25, respectively. The BSE Mid cap and Small cap indices were up by 2.31% and 2.46% respectively.
The top gainers on the Sensex were Tata Motors up 6.08%, Maruti Suzuki up by 5.95%, Hindalco Inds up by 5.24%, Mahindra & Mahindra up by 5.03% and DLF up 4.31%. On the flip side, ONGC down 2.22%, ITC down 1.15%, Hindustan Unilever down 0.95%, Sun Pharma down 0.68% and Tata Power down 0.54% were the top losers on the index.
The major gainers on the BSE sectoral space were Auto up by 4.17%, Realty up by 2.98%, Consumer Durables (CD) up by 2.61%, IT up by 2.41% and Bankex up by 2.39%. While, FMCG down 0.47% and Oil & Gas down 0.19% were the top losers on the BSE sectoral space.
Meanwhile, allying the fears of slowdown in economic growth, the revenue collections have shown significant increase in the month of July. The direct tax collection increased by 26% to Rs 21,400 crore in July 2010 from Rs 16,972 crore in July 2010 mainly due to fall in the tax refunds. The tax refunds reduced to Rs 7,000 crore compared to previous month of current fiscal.
In April to July 2011 the indirect tax collections have increased by 27% to Rs 1,25,901 crore from Rs 99,057 crore in April to July 2010. This increase in the indirect tax collection was led by service sector which jumped by 54.7 % to Rs 7,783 crore in July 2011 from Rs 5,030 crore in July 2010. During April to July 2011, service tax collection increased by 37.7 % to 27,454 crore from 19,934 crore in corresponding period of last year.
However, the direct tax collection fell by the 8% to Rs 79,000 in April to July 2011 from Rs 85,647 in April to July 2010, mainly due to higher tax refunds. During the April to July 2011 the total refunds stood at Rs 53,000 crore which is less than the Rs 57,000 crore of refunds issues in the entire 2010-11.
Despite the removal of custom and excise duty on petroleum products in month of June 2011, the collection of custom and excise duties have surged by 11% and 4.7% respectively. During April to July 2011 revenue collection from custom duty increased by 30.5% to Rs 50,705 crore from Rs 38,840 in April to July 2010. The excise duty also registered healthy growth in term of revenue collection, it surged by 18.6 % to Rs 47, 757 crore from Rs 40, 283 crore in April to July 2011.
In the month of July, the finance ministry incurred loss of around Rs 1,600 crore and Rs 1,400 crore respectively with removal of excise and custom duties on diesel and petroleum products. The growth in excise and customs without the duty cut would have been about 18% and 25%, respectively.
The indirect tax receipts in first four months of 2011-12 are about 32% of the Budget Estimate of Rs 3,92,908 crore. The indirect tax mop-up in April to July increased 16.4 % to Rs 31,493 crore. On the other hand, the direct tax collection for the first four months of 2011-12 is just above 15 % of the Budget Estimate of Rs 5,32,651 crore for the current fiscal year.
Central Board of Excise & Customs chairman S Dutt Majumder, said, "This is a good showing despite the duty cuts. It shows manufacturing is not doing that bad. In service tax, we cannot expect the same kind of growth in the coming months but it may still grow at 30-35 %."
Majumder further said the huge jump in service tax collections was due to the introduction of Point of Taxation Rules where the assessee has to pay service tax on accrual basis to the government in advance.
The S&P CNX Nifty touched high and low of 5,197.95 and 5,123.35, respectively.
The top gainers of the Nifty were Tata Motors up 6.04%, Maruti Suzuki up 5.78% DLF up 5.41%, Hindalco up 5.10% and M&M up 4.82%.
On the flip side, Grasim down 2.53%, ONGC down 2.14%, ITC down 1.68%, Cairn down 1.46 and Ranbaxy down by 1.30% were the top losers on the index.
The European markets were trading in green. France's CAC 40 gained 0.24%, Britain's FTSE 100 higher by 1.13% and Germany's DAX surged by 2.15%.
After witnessing a deep cut in six straight sessions, Asian markets finally gets sigh of relief as pull back rally witnessed in all the Asian equity indices barring Straits Times on Wednesday after the US Federal Reserve pledged to keep interest rates near zero through the middle of 2013. Moreover traders were hoping that another round of fiscal stimulus could be on the way too aided the sentiments. But, the investors remained wary about the implication of the Fed's move -- that it expects the US economy to remain weak far longer than previously forecast -- and this supported demand for safe havens such as gold and the Swiss franc. Meanwhile, South Korean index closed slightly higher in the trade as investors bought battered stocks after recent selloffs, but gains were limited by continued foreign selling however, Straits times that escaped the massacre in last session has witnessed some correction in the trade today.
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