The Indian equity markets have made a firm start tracking positive cues from global indices. The US markets extended their gains overnight supported by good jobs data, even though European concerns resurfaced with Portugal nearing a bailout. However, the Asian markets were trading on a mixed note. Back home, Nifty surged to its two and a half month high and breached its crucial 5,800 level supported by sustained buying by foreign funds which boosted investors’ sentiments and India’s win over Pakistan in the cricket’s World Cup semi finals also aided the sentiments. Consumer durables witnessed the maximum gain in trade followed by software and capital goods with no losers on the BSE sectoral space. The broader indices were going neck to neck with benchmarks. Meanwhile, Paper stock, AP Paper Mills again touched the roof in the early trade and gained about 20% as in a surprising deal of International Paper Company, the US based paper and packaging giant, has bought 53.5% stake in Andhra Pradesh Paper Mills from its promoters for around Rs 1160 crore. Other Paper stocks viz., Tamil Nadu Newsprint, JK Papers and West Coast Paper mills were also trading with good gains. The market breadth on the BSE was positive; there were 1,119 shares on the gaining side against 467 shares on the losing side while 72 shares remained unchanged.
The BSE Sensex opened at 19,339.75; about 49 points higher compared to its previous closing of 19,290.18, and has touched a high of 19,443.48 while low remain its opening.
The index is currently trading at 19,420.49, up by 130.31 points or 0.68%. There were 20 stocks advancing against 10 declines on the index.
The overall market breadth has made a strong start with 67.49% stocks advancing against 28.17% declines. The broader indices were trading in line with benchmarks; the BSE Mid cap and Small cap indices surged 0.49% and 0.80% respectively.
The top gaining sectoral indices on the BSE were, CD up by 2.06%, IT up by 1.03%, CG up by 0.87%, Realty up by 0.86% and Bankex was up by 0.84%. While there were no losers on the index.
The top gainers on the Sensex were TCS up by 2.05%, Hero Honda up by 1.70%, ONGC up by 0.66%, Jaiprakash Associates up by 1.41% and HDFC was up by 1.25%.
On the flip side, Bharti Airtel down by 1.38%, M&M down by 1.34%, Wipro down by 0.94%, RCom down by 0.50% and Sterlite Industries down by 0.49% were the top losers on the index.
Meanwhile, 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 opened at 5,803.05; about 16 points higher compared to its previous closing of 5,787.65, and has touched a high of 5,830.80 while low remain its opening.
The index is currently trading at 5,823.70, higher by 36.05 points or 0.62%. There were 36 stocks advancing against 14 declines on the index.
The top gainers of the Nifty were TCS up by 2.18%, Hero Honda up by 1.63%, ONGC up by 1.63%, Sesa Goa up by 1.32% and HDFC up by 1.27%.
M&M down by 1.50%, Bharti Airtel down by 1.34%, Wipro down by 1.03%, Sterlite Industries down by 0.64% and Power Grid was down by 0.64%, were the major losers on the index.
Asian markets were trading on a mixed note; Hang Seng was up 22.68 points or 0.10% to 23,474.11, Jakarta Composite was up 15.81 points or 0.43% to 3,656.79, KLSE Composite was up 5.36 points or 0.35% to 1,536.99 and Seoul Composite was up 2.04 points or 0.10% to 2,093.42.
On the flip side, Shanghai Composite was down 28.62 points or 0.97% to 2,927.15, Nikkei 225 was down 26.46 points or 0.27% to 9,682.33, Straits Times was down 1.42 points or 0.05% to 3,093.90 and Taiwan Weighted was down by 23.86 points or 0.28% to 8,622.45.
