BROADER MARKET OUTPERFORM

The Indian equity markets continue to trade in narrow range band with negative bias in late afternoon session despite the strong market breadth; which remains in favour of advances in the ratio of 2014:764 on the BSE and also the broader markets outperforming the benchmarks; the BSE Mid-cap and Small-cap indices have gained 1.26% and 1.74%, respectively, indicating  that the benchmark indices  were in consolidation mood , particularly after the huge gains seen in previous eight consecutive sessions due to foreign institutional investors buying of two billion dollar worth of shares. On the other hand, the other Asian markets settled in green barring Nikkei which was down by 0.48%, while other European markets and US index futures were also trading in green. Back home, Index biggies like SBI slipped more than one percent   while Reliance Communication and BHEL were continuing to trade higher. In the sectoral space up 1.89%, power, Metal, Capital Goods and Auto counter were witnessing buying interest whereas Bankex , IT , Oil & Gas , TECk  and PSU companies were witnessing profit booking .The total market volume stood at Rs90,000 crore around at this point of time.

The market breadth on the BSE was strong and in favour of advances in the ratio of 2014:764 while 81 scrips remained unchanged.

The BSE Sensex declined 28.66 points or 0.15% at 19,458.56. The index touched a high and a low of 19,562.55 and 19,401.84 respectively.

The BSE Mid-cap and Small-cap indices gained 1.26% and 1.74%, respectively.

In the BSE sectoral indices, Realty up 1.89%, power up 0.86%, Metal up 0.85%, Capital Goods up 0.74% and Auto up 0.55% were the major gainers.

Bankex down 0.99%, IT down 0.52%, Oil & Gas down 0.38%, TECk down 0.33% and PSU down 0.11% were the losers on the BSE sectoral indices.

The top gainers on the Sensex were RCom up 3.48%, BHEL up 2.48%, Hindalco up 1.87%, Mahindra & Mahindra up 1.82%. JP Associates up 1.73%.

On the flip side, NTPC down 2.33%, SBI down 1.99%, ICICI Bank down by 0.91%, Tata Power down 0.89% and Wipro down 0.69% were the losers on the index.

Government has once again delayed a decision on levying service tax on transport of goods by rail to July 1. The move to defer the levy of tax came after Railway Minister Mamata Banerjee put pressure on the government to waive off service tax as it had done in the previous year. This is the fourth time that the government is postponing a decision on service tax on rail freight which was to be implemented from April 1, 2010.

Earlier in Budget 2009-10, the government had proposed a 10% service tax on goods carried by the railways to provide a level-playing field to transport of goods by road. However, it exempted rail freight from service tax in September 2009. However, in Budget 2010-2011, Pranab Mukherjee announced that the exemption from service tax would be withdrawn.

The service tax attracted an abatement of 70% of the gross value of freight charged on goods (other than exempted goods). This translated to a tax on only 30% of the value of transported goods. The service tax on rail would result in an increase in freight rates between 6-7%, in case the railway decides to pass it on to the consumers. With high food inflation, which has again entered double digits at 10.05% for the week ended March 12, while the overall wholesale price inflation stood at 8.31% in February, this would have further fuelled prices.

The exchequer has already lost around Rs 800 crore in 2010-11 as the finance ministry decided not to levy service tax on transport of goods through rail this fiscal. Service Tax is a form of indirect tax imposed on specified services called 'taxable services'. The objective behind levying service tax is to reduce the degree of intensity of taxation on manufacturing and trade without forcing the government to compromise on the revenue needs. The intention of the government is to gradually increase the list of taxable services until most services fall within the scope of service tax.

The S&P CNX Nifty trimmed 12.80 points or 0.22% at 5,820.95. The index touched high of 5860.20 and a low of 5814.20, respectively.

The top gainers on the Nifty were Reliance Capital up 4.34%, RCom up 3.62%, Grasim up 3.10%, PowerGrid up 3.04% and BHEL up 2.99%.

On the other hand, HCL Tech down 2.76%,  PNB down 2.73%, NTPC down 2.36%, SBI down 1.93% and Kotak  Bank down 1.69% were the major losers on the index.

The other  Asian markets settled in green barring Nikkei which was down by 0.48%, Shanghai Composite climbed 1.33%, Hang Seng advanced 1.17%, Jakarta Composite surged 0.78%, KLSE Composite soared  0.66%, Straits Times jumped  0.65%, Seoul Composite advanced 0.68% and Taiwan Weighted  gained 0.25%.