MARKETS PARE GAINS

Indian equities have pared gains but continued to trade in green in the late morning session. On the global front, all the Asian counters were trading in the green after a contraction in China's manufacturing boosted expectations of more stimulus for the world's second-biggest economy. The traders were seen piling up position in Auto, CD and Power sector, while selling was witnessed in Oil & Gas, and FMCG sector. On the other hand, Tata Motors, Mahindra & Mahindra, Bajaj Auto and Maruti Suzuki from Auto pack were seen trading in green edging the markets higher.  NTPC, Power Grid Corp, and BHEL from Power pack were seen trading firm in green, holding the markets from dipping further.  RIL, ONGC, BPCL, Indian Oil Corp and HPCL from Oil & Gas sector were trading in red exerting pressure on the market, while Metal majors Tata Steel, Coal India and Jindal Steel too were pressurizing the markets.

In the scrip specific development, Mahindra & Mahindra gained on reporting 21.74% jump in sales at 45,836 units for August against 37,684 units in the same month last year. The company's domestic sales were up 19.77% 42,826 units during the month against 35,756 units in August 2011. GAIL India rose on inking LNG supply agreement with Spain based GNF. Tata Motors soared on reporting growth in its total sales at 71,826 vehicles for the month of August 2012, including exports of Tata commercial and passenger vehicles. Besides, the company's domestic sales rose by 13% at 67,453 vehicles as against 59,874 vehicles sold in August last year. SBI edged higher on inking MoU with JBIC to assist Japanese SMEs.

The NSE Nifty and BSE Sensex were managing to hold their psychological 5250 and 17400 levels respectively. The market breadth on BSE was positive, in the ratio of 1223:804.

The BSE Sensex is currently trading at 17460.21 up by 30.65 points or 0.18% after touching a high of 17509.99 and low of 17445.78. There were 20 stocks advancing against 10 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.64% and Small cap index was up by 0.58%.

On the BSE sectoral space, Auto up by 0.69%, CD up by 0.69% Power up by 0.66%, Metal up by 0.58% and IT up by 0.51% were the gainers. While, Oil & Gas down by 052% and FMCG down by 0.20% were the only top losers on the index.

The top gainers on the Sensex were Bajaj Auto up by 1.85%, Cipla up by 1.82%, Sterlite Industries up by 1.61%, NTPC up by 1.52% and Maruti Suzuki up by 1.27%. On the flip side, Jindal Steel was down by 1.55%, Wipro  was down by 1.14%, RIL was down by 0.97%, Hero MotoCorp  was down by 0.89% and Hindustan Unilever  was down by 0.80%, were the top losers on the Sensex.

 Mean while, in a development aimed at reviving the inflow of foreign capital, the expert committee on General Anti Avoidance Rules (GAAR), headed by Parthasarathi Shome, has recommended postponement of the contentious anti-avoidance tax provisions by three years till 2016-17. The draft report, which has been submitted to the finance ministry, has also sought comments from the stakeholders by September 15.

In the wake of outrage by foreign investors, the Prime Minister Manmohan Singh appointed a four-member committee headed by noted economist and tax expert Parthasarathi Shome to rework on GAAR, a measure to check tax evasion, proposed in the Union Budget 2012-13, which was later deferred till April next year. However, the shome committee, among other things, also recommended a breather for Mauritius-based entities and an abolition of capital gains tax for listed securities. Committee in its draft report suggested that GAAR provisions should not be invoked to examine the genuineness of the foreign investor entities' residency in Mauritius, which is the most preferred route for foreign investments because of the liberal taxation regime in the island country.

Meanwhile, in a move to cheer the stock markets, the government tax panel has also advocated Abolishment of capital gains arising from transfer of listed securities whether in the nature of capital gains or business income to both residents as well as non-residents. However, in order to neutralize the impact of the proposal, the panel suggested that government to consider increasing the rate of Securities Transaction Tax (STT) appropriately.

Furthermore, the panel besides recommending monetary threshold of Rs 3 crore of tax benefit or more for application of GAAR provisions, has expanded the scope of the general anti-avoidance rules, by recommending inclusion of all Non-resident Indian (NRI) taxpayers into the ambit of the rules.

The S&P CNX Nifty is currently trading at 5,279.20, up by 20.70 points or 0.39% after trading in a range of 5,295.80 and 5,275.75. There were 35 stocks advancing against 15 declines on the index.

The top gainers of the Nifty were Sesa Goa up by 2.42%, Cipla up by 2.34%, Ranbaxy up by 2.13%, Bajaj-Auto up by 1.88% and NTPC up by 1.58%. On the flip side, Ambuja Cement down by 1.86%, Jindal Steel down by 1.79%, BPCL down by 1.10%, ACC down by 0.99% and Tata Power down by 0.40%, were the major losers on the index.

All the Asian indices were trading in green; Nikkei 225 up by 0.50%, Hang Seng index up by 0.57%, Shanghai Composite up by 0.79%, Jakarta Composite up by 0.61%, Kospi Composite Index up by 0.65%, Taiwan Weighted up by 0.78%, Straits Times up by 0.01% and KLSE Composite up by 0.52% were the gainers.