SHORT COVERING

Barometer gauges have pruned substantial losses after hitting one-week's low level at the onset of trading session, as short covering which emerged at lower level rescued the bourses from slipping further in red, besides considerably trimming back its loss. Bourses tumbled in early deals as investors casted off riskier assets after Greece's abrupt call for a referendum rekindled fears about the viability of a European debt deal reached just last week. However, recuperations of the bourses came on the back of the resurgence of Index heavyweights such as Reliance Industries, TCS, SBI, ONGC and Infosys. Sentiment at Dalal Street was also faltered after a slump in the US markets overnight. The US markets slumped on Tuesday, for the second day on heightened uncertainty over whether Greece would derail European efforts to curb the region's sovereign debt crisis. Thus, by the end of the trade, Dow Jones industrial average lost 297.05 points, or 2.48 percent, to 11,658.00. The Standard and Poor's 500 closed lower by 35.02 points, or 2.79 percent, to 1,218.28, while the Nasdaq composite lost 77.45 points, or 2.89 percent, to 2,606.96. Meanwhile, Asian shares too were tottering under intense selling pressure. However, the US future indices were showing an uptick in the screen trade.
Back home, stocks from Metal, Realty and Bankex on the BSE staggering under the selling pressure, have mainly endorsed the weakness, however, stocks from Healthcare, Oil & Gas, Information Technology counters skirmishing against the pressure have convalesced some losses. Meanwhile amidst the sluggish trade across the globe, the only silver lining amidst the grey cloud is the diminishing price Oil. Oil fell in New York for a fourth day, the longest losing streak in three months, on concern a Greek referendum on Europe's rescue plan will worsen the region's debt crisis and curb economic growth. 30 share barometer index- Sensex- on BSE declining over 10 points was gyrating near to its neutral line. Similarly, 50 share index- Nifty-too trimming major losses was trading around to its previous close. However, the broader indices after getting a cautious start were trading in green. The overall market breadth on BSE is favouring advances which have outpaced declines in the ratio of 1083:1020, while 108 shares have remained unchanged.
The BSE Sensex is currently trading at 17,467.76, down by 13.07 points or 0.07%. The index has touched a high and low of 17,502.57 and 17,337.65 respectively. There were 9 stocks advancing against 21 declines on the index.
The broader indices after a cautious start are now trading in fine fettle; the BSE Mid cap and Small cap indices were up by 0.13% and 0.20% respectively. Top losing sectoral indices on BSE were Metal down by 0.81%, Realty down by 0.44%, Bankex down by 0.36%, Capital goods (CG) down by 0.31% and Public Sector Undertaking (PSU) down by 0.27%.
On the flip side, Health Care (HC) up by 0.52%, Oil & Gas up by 0.44%, Information Technology (IT) up by 0.15% and TECk up by 0.05% were the gaining sectoral indices on BSE.
The top gainers on the Sensex were Bajaj Auto up by 1.30%, M&M up by 1.06%, Sun Pharmaceuticals up by 0.97%, Tata Power up by 0.84% and HDFC Bank up by 0.68%.
On the flip side, Hero MotoCorp down by 1.77%, Wipro down by 1.77%, Jindal Steel down by 1.51%, Tata Steel down by 1.26% and Tata Motors down by 1.09% were the top losers on the index.
Meanwhile, The government's move to have a uniform duty structure for stock market transactions is likely to be fulfilled soon, as the finance ministry is planning to submit the Indian Stamps Act (Amendment) Bill 2011 in the coming winter session of Parliament. According to a finance ministry official, the ministry has received comments on the draft bill and most state governments were on board. The bill would be sent to Union Cabinet for its approval this month.
In the proposed draft bill, the stamp duty will be collected by the stock exchanges from the seller and then passed on to the states where the seller is based. The ministry of finance is planning to replace the current practice of different stamp duty rates in stock market transactions by proposing uniform rate of 0.003% on future and options trading and for currency derivatives; the ministry is planning a rate of 0.0001%.

However, the stamp duty on stock market transactions is officially a state subject and many states have adopted the Indian Stamp Act. The state governments will have to agree to the proposals to give effect to a uniform rate. Currently stamp duty varies from state to state.

In order to provide relief to stock market investors, the ministry of finance is also planning to reduce the Securities Transaction Tax (STT). However, ministry may take final decision on this while making union budget in February.
The finance ministry official further said, that the intent is to rationalize STT and synchronies it with developed countries, by adding further he said 30-40% could be considered.
The S&P CNX Nifty is currently trading at 5,252.65, down by 5.30 points or 0.10%. The index has touched a high and low of 5,264.60 and 5,204.95 respectively. There were 21 stocks advancing against 29 declines on the index.
The top gainers of the Nifty were RCom up by 2.19%, Bajaj Auto up by 1.39%, Ranbaxy up by 1.34%, Dr Reddy's up by 1.16% and GAIL up by 1.08%.
PNB down by 3.66%, Hero MotoCorp down by 1.64%, Wipro down by 1.49%, IDFC down by 1.48% and Tata Steel down by 1.48% were the major losers on the index.
Most of the Asian equity indices were trading in the red; Shanghai Composite plunged 1.00%, Hang Seng declined 0.92%, KLSE Composite descended by 0.75%, Nikkei 225 plummeted by 2.10%, Seoul Composite knocked down 1.05% and Taiwan Weighted was down by 0.48%. However, Jakarta Composite was trading at its neutral line, while Straits Times gaining 0.31% was the only gainer among Asian pack.