MARGINALLY IN RED

Indian equity benchmarks have opened the session marginally in red on Thursday due to profit-booking by funds and retail investors after two days of massive rally. Though, both the frontline gauges managed to hold their psychological 5,800 (Nifty) and 19,200 (Sensex) levels. Globally, the Asian markets trade mixed amid caution ahead of the meetings of central banks of Japan, Britain and the euro zone for any signs of monetary stimulus to boost growth into the fragile global economy. While, the US markets made a mixed closing on Wednesday as trade turned choppy after two consecutive days of rally amid uncertainty about the near-term outlook for the markets following recent strength.

Back home, telecom stocks like Idea Cellular, Bharti Airtel and Reliance Communication edged lower as there was no decision on the timeline for the third round of auctions and further reduction in auction prices. However, the losses remain capped as some support came in from software and technology stocks after rupee lost 18 paise to 54.90 in early trade on the Interbank Foreign Exchange due to renewed dollar demand from importers and appreciation of the US currency overseas. Some support also came in from Prime Minister Manmohan Singh's statement that the economy has faced a difficult situation in the past year but the government aims to achieve an average growth of eight percent during the 12th Five Year Plan.

On the sectoral front, software witnessed the maximum gain in trade followed by capital goods and technology while, metal, oil and gas and auto remained the top losers on the BSE sectoral space. The broader indices, however, managed to keep their head above water while, the market breadth on the BSE was negative; there were 996 shares on the gaining side against 888 shares on the losing side while 83 shares remain unchanged.

The BSE Sensex opened at 19,222.05; about 30 points lower compared to its previous closing of 19,252.61, and has touched a high and a low of 19,275.61 and 19,212.92 respectively.

The index is currently trading at 19,221.31, up by 31.30 points or 0.16%. There were 10 stocks advancing against 20 declines on the index.

The overall market breadth has made a strong start with 51.85% stocks advancing against 43.95% declines. The broader indices were trading in-line with benchmarks; the BSE Mid cap and Small cap indices rose by 0.01% and 0.22% respectively. 

The top gaining sectoral indices on the BSE were, IT up by 1.13%, Capital Goods up by 0.84%, Teck up by 0.81%, Realty up by 0.38% and Health Care up by 0.25% while, Metal down by 1.06%, Oil & Gas down by 0.82%, Auto down by 0.73%, Bankex down by 0.36% and PSU down by 0.28% were the only losers on the sectoral index.

The top gainers on the Sensex were Hero MotoCorp up by 2.70%, Wipro up by 2.18%, Sun Pharma up by 1.32%, TCS up by 1.22% and L&T up by 1.16%.

On the flip side, Jindal Steel was down by 2.18%, Tata Motors was down by 1.96%, Hindustan Unilever was down by 1.53%, Hindalco Industries was down by 1.52% and Tata Steel was down by 1.32% were the top losers on the Sensex.

Meanwhile, in a move to have to have stable tax system, the finance ministry has urged public sector enterprises to ensure that service tax collected on the services availed by them are deposited to the exchequer. Several firms including telecom companies, collect service tax as part of their regular billing, but do not deposit the collected taxes to the government. 

In FY14 Budget, the government has made non-deposit of service tax of Rs 50 lakh or more a cognisable offence, which could lead to the arrest. This provision has put trade industry in a spot as they fear harassment, given that this provision could be misused and lead to their arrest.

However, to allay fears of trade, Central Board of Excise and Customs (CBEC) chairperson Praveen Mahajan said enough safeguards were in place to ensure that the provision was not misused. The basic thrust is to have stable tax system and, therefore, we resisted the temptation of hiking tax rates to 14 per cent.

By adding further she said, 'we have ensured that the power of arrest is vested with a high ranking official at a level of commissioner. Penal provisions were already there and we have only made the offences cognisable. The number of arrests as a percentage of offences is below one per cent.' 
The CNX Nifty opened at 5,801.30; about 17 points lower as compared to its previous closing of 5,818.60, and has touched a high and a low of 5,820.55 and 5,801.30 respectively.

The index is currently trading at 5,808.05, down by 10.55 points or 0.18%. There were 18 stocks advancing against 31 declines and one stock remains unchanged on the index.

The top gainers of the Nifty were Hero MotoCorp up by 2.73%, Wipro up by 2.14%, Sun Pharmaceuticals up by 1.41%, L&T up by 1.40% and DLF up by 1.22%.

On the flip side, Jindal Steel & Power down by 2.04%, Tata Motors down by 1.91%, JP Associate down by 1.61%, Hindalco down by 1.47% and Kotak Bank down by 1.44%, were the major losers on the index.

Asian equity indices trading mixed; Shanghai Composite rose 0.13 points or 0.01% to 2,347.31, Hang Seng increased 22.34 points or 0.10% to 22,800.18, Jakarta Composite jumped 10.56 points or 0.22% to 4,835.24, Nikkei 225 added 37.57 points or 0.31% to 11,969.84 and Taiwan Weighted was up by 11.32 points or 0.14% to 7,961.62.

On the flip side, KLSE Composite slipped 1.10 points or 0.07% to 1,650.74, Straits Times dipped 0.73 points or 0.02% to 3,291.08 and KOSPI Composite was down by 17.53 points or 0.87% to 2,003.21.