POSITIVE MOOD

Indian equity markets have sustained their ebullient mood witnessed in early trade after a pledge by European officials to resolve the region's debt problems helped soothe market sentiment. Local equity markets vigorously rebounded after a three-day losing streak owing to the fresh spell of buying by funds and retail investors in recently beaten-down stocks, driven by a firming trend on the other Asian bourses following overnight gains in the US. In contrast to weeks of indecision, European ministers told a meeting of global finance leaders in Washington over the weekend that they would take bolder steps to fight the debt crisis. Meanwhile, on Monday, President Barack Obama called on Europe's leadership to move more quickly to address the problems, which led to biggest gains in more than two weeks at Wall Street. S&P's second biggest one-day rally in September - was driven by defensive "blue-chip" names, with the Dow Jones Industrial Average up 2.5%. Meanwhile, the US future indices too were showing an uptick in the screen trade. Back home, frenzied selling was witnessed across the board, however, the stocks from Consumer Durable, Realty and Bankex counters scurried the most for the bourses splendid gains. In addition to this, covering-up of short positions ahead of monthly expiry in the derivatives segment on Thursday also helped stocks to recover. The 30 scrip sensitive index- Sensex- trading above 16300 level, had puffed up gains of over 250 points. Meanwhile, the broadly followed 50 share index- Nifty-gaining over 75 points was trading above 4900 level. The broader indices too were performing well for themselves and were trading above 1%. The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 1573:476, while 71 shares remained unchanged.
The BSE is currently trading at 16,337.83, up by 286.73 points or 1.79%. The index has touched a high and low of 16,360.26 and 16,282.74 respectively. All the 30 stocks were advancing on the index at this point of time.
The broader indices too were performing well; the BSE Mid cap and Small cap indices captured gains of 1.45% and 1.47% respectively.
Buying was witnessed across the board, however, the top gaining sectoral indices on the BSE were, CD up by 2.88%, Realty up by 2.84%, Bankex up by 2.09%, IT up by 2.05% and TECk up by 1.85%.
The top gainers on the Sensex were Tata Motors up by 3.95%, Jaiprakash Associates up by 3.84%, DLF up by 3.59%, Sterlite Industries up by 2.86% and ICICI Bank up by 2.81%.
Meanwhile, order to lift the market sentiments, government is considering a cut in the Securities Transaction Tax (STT), along with this, the Ministry of Finance is also mulling a rationalized and uniform stamp duty on securities transactions. This move of the government has been welcomed by the market, which has been under pressure because of the global uncertainties. However, the recommendation is still under consideration. The Bombay Stock Exchange (BSE) benchmark index Sensex recovered around 250 points from the day lowest and closed to 16,051.10, although, Sensex was below 110.96 points compare to last Friday. A senior finance ministry official said, 'we are seriously looking into the proposal (reducing STT). This can be done outside the Budget.' The decision of cutting the STT is backed by the rationale that the tax has not generated much revenue. In first five months of current financial year, the government generated around Rs 2,223 crore from STT, which is almost 10% less than the last financial year.
The STT was introduced in 2004-05, when P Chidambaram was Finance Minister, the STT is charged on sales/purchase of share, equity-oriented mutual funds and futures and options in securities. The recommendation of cutting or removing the STT came up in the meeting between the finance ministry and Stock Exchanges. It was said that this tax constituted a major component of the transaction cost. Due to the high cost and to make trading more attractive, there was need to reduce or remove the tax, the exchanges are believed to have said in the meeting.
In the same time, the ministry of finance is making the draft to present a proposal before cabinet for rationalizing stamp duty. This also involves removing the rates in some states. Finance Ministry official said, 'two departments of the Ministry, Economic Affairs (responsible for development of capital market) and Revenue (responsible for taxation) have finalized various provisions. Now, Finance Minister, Pranab Mukherjee, will take a final call and then the proposal will be taken to the Cabinet.'

As stamp duty is the state matter, the discussions are also going on with the states. The stamp duties vary from state to state, the effort is to define a uniform rate and persuade the states to fix it accordingly. Maharashtra has the highest stamp duty collection with 42% of total inflows. It charges at the rate of 0.002% on the non-delivery-based and 0.01% on delivery-based. 

The S&P CNX Nifty is currently trading at 4,918.85, higher by 83.45 points or 1.73%. The index has touched a high and low of 4,928.30 and 4,905.15 respectively. 47 stocks were advancing against 3 declining one's on the index.
The top gainers of the Nifty were Tata Motors up by 3.99%, JP Associates up by 3.75%, Cairn India up by 3.34%, DLF up by 3.18% and Tata Power up by 2.99%.
Meanwhile, ACC down by 0.41%, Sesa Goa down by 0.18% and Cipla down by 0.03% were the losers on the index.
All the Asian equity indices were trading in the green; Shanghai Composite was up by 0.30%, Hang Seng was up by 2.40%, Jakarta Composite was up by 4.34%, KLSE Composite was up by 1.62%, Nikkei 225 was up by 1.91%, Straits Times was up by 1.39%, Seoul Composite was up by 3.68% and Taiwan Weighted was up by 2.74%.