FIRM TRADE

Buoyed by firm global cues, Indian equity markets have made a positive start with both the frontline indices re-conquering their crucial 6000 (Nifty) and 19,850 (Sensex) mark in the morning trade on Monday. The US markets rose on Friday taking the Dow above 14k mark after five years. The better jobs data boosted the morale of the investors that the economy is not faltering. Most of the Asian equity indices too were trading in the red at this point of time supported by firm manufacturing data from China and Europe. Chinese benchmark rose by over half a percent following a positive news over the weekend, with growth in its official purchasing managers' index (PMI) for the non-manufacturing sector which ticked up in January for the fourth straight month, confirming the world's second-largest economy was showing a modest recovery.

Back home, banking remained the top gainer despite RBI's new draft guidelines for restructured loans which are likely to hit earnings of banks by at least 3-8 per cent over the next two years, as banks would need to step up provisioning on restructured loans by 1 per cent from FY'14 to 3.75 per cent and to 5 per cent by FY'15 on the existing stock of restructured loans. In other development it has been reported that differences have cropped up between the Reserve Bank and the finance ministry over the guidelines for new banking licences, which are likely to be announced within the next fortnight. However, market-men remained little cautious ahead of advanced economic growth estimates for the current fiscal year (FY13) which will be released on Thursday.

On the sectoral front, banking witnessed the maximum gain in trade followed by realty and technology while, healthcare, fast moving consumer goods and power remained the only losers on the BSE sectoral space. The broader indices too were trading with traction while, the market breadth on the BSE was positive; there were 1,212 shares on the gaining side against 603 shares on the losing side while 104 shares remain unchanged.

The BSE Sensex opened at 19860.97; about 79 points higher compared to its previous closing of 19781.19, and has touched a high and a low of 19902.60 and 19847.81 respectively.

The index is currently trading at 19856.17, up by 74.98 points or 0.38%. There were 17 stocks advancing against 13 declines on the index.

The overall market breadth has made a positive start with 63.53% stocks advancing against 31.88% declines. The broader indices too were outperforming with benchmarks; the BSE Mid cap and Small cap indices rose 0.40% and 0.49% respectively.

The top gaining sectoral indices on the BSE were, Bankex up by 0.77%, Realty up by 0.61%, TECk up by 0.52%, Consumer Durables up by 0.51% and Auto up by 0.44%. While, Health Care down by 0.53%, FMCG down by 0.12% and Power down by 0.05% were the only losers on the index.

The top gainers on the Sensex were ICICI Bank up by 1.96%, Tata Motors up by 1.91%, Hindalco Industries up by 1.32%,  TCS up by 1.23% and HDFC up by 1.03%.

On the flip side, Cipla was down by 0.99%, Dr Reddys Lab was down by 0.91%, BHEL was down by 0.64%, Tata Power was down by 0.49% and Maruti Suzuki down by 0.48% were the top losers on the Sensex.

Meanwhile, the government will come up with a modified Direct Taxes Code (DTC) bill after incorporating the suggestions of the Standing Committee on Finance, which has suggested many things regarding direct tax bill including raising annual income tax exemption limit to Rs 3 lakh.

While addressing an event organized by the FICCI, Parthasarathi Shome, adviser to the finance ministry, said that the ministry is looking at the Bill and working on tax structures suggested by the committee. He said that we are trying to see what could be the best in terms of transparency so that issues that are hurting industry could be covered adequately.

Regarding the issue of expenditure control, Shome said that expenditure control is a major challenge and is being addressed by the finance minister. He added that we should do more in terms of expenditure efficiency.

Earlier, the parliamentary panel, in its report of March 2012, had suggested raising the tax exemption tax limit to Rs 3 lakh as against Rs 2 lakh proposed in the original DTC Bill. The current tax exemption limit is Rs 1.8 lakh. It also suggested that subsequent tax slabs be adjusted accordingly to provide relief to people reeling under the impact of inflation. Moreover, the DTC will eventually replace the over-five-decades-old Income Tax Act.

The S&P CNX Nifty opened at 6,025.20; about 26 points higher as compared to its previous closing of 5,998.90 and has touched a high and a low of 6,038.50 and 6,019.10 respectively. The index is currently trading at 6,026.30, up by 27.40 points or 0.46%. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were UltraTech Cement up by 3.25%, Tata Motors up by 3.04%, ICICI Bank up by 1.97%, Asian Paints up by 1.66% and Hindalco Industries up by 1.41%.

On the flip side, Ranbaxy Laboratories down by 1.53%, Cipla down by 1.32%, Dr. Reddy's Laboratories down by 1.31%, IDFC down by 1.10% and Coal India down by 0.88%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite rose 14.10 points or 0.58% to 2,433.12, Hang Seng surged 122.21 points or 0.52% to 23,844.05, Jakarta Composite added 3.69 points or 0.08% to 4,485.32, KLSE Composite increased 6.40 points or 0.39% to 1,633.95, Nikkei 225 soared 77.67 points or 0.69% to 11,269.01, Straits Times jumped 21.10 points or 0.64% to 3,312.24 and Taiwan Weighted was up by 67.76 points or 0.86% to 7,923.73.

On the flip side, KOSPI Composite was down by 3.09 points or 0.16% to 1,954.70.