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Benchmarks trade with marginal gains in early deals
Mar-20-2019

Indian equity benchmarks are trading marginally in green in early deals on Wednesday, as traders took some support with Reserve Bank of India (RBI) governor Shakthikanta Das’ statement that the market response to the unconventional liquidity tool of dollar swap auction worth $5 billion has been received quite well. However, gains remain capped with a report that Indian mutual funds and insurance firms, which scooped up shares while foreign institutional investors (FIIs) stayed away, turned net sellers of Rs 10,247.9 crore in March, even as FIIs returned to Indian markets. Some concerns also come with a report that there is a 70% chance of El Nino climate cycle forming towards the second half of this year, a forecast that does not augur well for the monsoon season in India. Meanwhile, economists raised concerns over a sharp slowdown in the Indian economy and pitched for a monetary policy boost to support growth at a meeting with the RBI chief on March 19. RBI governor Shaktikanta Das met more than a dozen economists to get their views on the economy ahead of the Monetary Policy Committee (MPC) decision due on April 4.

On the global front, Asian markets are trading mixed at this point of time following a series of conflicting reports on US-China trade that surfaced overnight. The US markets ended mixed on Tuesday, as investors hoped for a more accommodative policy stance at the end of the Federal Reserve's two-day meeting on March 20.

Back home, real estate sector stocks remained buzzing as the all-powerful Goods and Services Tax (GST) Council approved a transition plan for the implementation of new tax structure for housing units. It has decided that builders can pick between paying 12% for non-affordable houses with ITC benefits or 5% without the tax rebates for under-construction houses. In scrip specific developments, Avenue Supermarts gained on raising Rs 100 crore via CP and IDBI Bank edged higher on getting nod to borrow up to Rs 4,000 crore in FY20.

The BSE Sensex is currently trading at 38432.17, up by 68.70 points or 0.18% after trading in a range of 38316.21 and 38462.62. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.06%, while Small cap index was up by 0.18%.

The top gaining sectoral indices on the BSE were Realty up by 1.80%, IT up by 1.32%, TECK up by 1.01%, Capital Goods up by 0.75% and Telecom was up by 0.54%, while Oil & Gas down by 1.36%, PSU down by 0.99%, Energy down by 0.74%, Utilities down by 0.55% and Auto was down by 0.22% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.00%, Vedanta up by 1.27%, HCL Tech. up by 1.22%, Larsen & Toubro up by 0.83% and HDFC Bank up by 0.72%. On the flip side, ONGC down by 2.17%, NTPC down by 1.70%, Coal India down by 1.38%, Bajaj Auto down by 0.99% and Kotak Mahindra Bank down by 0.76% were the top losers.

Meanwhile, the government has given a major relief to startups by enhancing definition of startups. It has decided to relax angel tax norms for startups, including increasing the investment limit to Rs 25 crore for availing income tax concessions by startups. Currently, startups avail tax concession only if total investment, including funding from angel investors, does not exceed Rs 10 crore. A notification regarding simplifying the process for startups to get exemptions on investments under section 56(2)(viib) of Income Tax Act, 1961, will be issued shortly.

The definition of startups has been enhanced to an entity which has been in operation for up to ten years from its date of incorporation or registration, instead of the current seven years. Besides, investments by listed companies with a net worth of Rs 100 crore or turnover of Rs 250 crore into an eligible startup shall be exempt from the section 56 (2) (viib) of the Income Tax Act, beyond the Rs 25 crore limit. Also, investments into eligible startups by non-residents, alternate investment funds - category I - shall also be exempt under this section beyond the limit of Rs 25 crore.

A startup shall also be eligible for exemption under Section 56(2)(viib) if it is a private limited company recognised by the department for promotion of industry and internal trade (DPIIT) and is not investing in specified asset classes. Eligible startups only have to file a duly signed self-declaration by with DPIIT for availing exemption. DPIIT shall transmit these declarations to Central Board of Direct Taxes (CBDT). Further, there is no requirement of making any application for exemption under this section and there will be no case-to-case examination of startups for exemption under Section 56(2) (viib) of Income Tax Act.

The CNX Nifty is currently trading at 11543.55, up by 11.15 points or 0.10% after trading in a range of 11511.50 and 11556.10. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 3.84%, Hindalco up by 2.10%, Infosys up by 1.93%, Wipro up by 1.65% and Dr. Reddys Lab up by 1.38%. On the flip side, Zee Entertainment down by 3.59%, HPCL down by 3.53%, Indian Oil Corporation down by 2.74%, BPCL down by 2.67% and ONGC down by 2.20% were the top losers.

Asian markets are trading mixed; Straits Times declined 21.63 points or 0.67% to 3,199.29, Hang Seng shed 152.53 points or 0.52% to 29,313.75, KOSPI declined 21.42 points or 0.98% to 2,156.20 and Shanghai Composite was down by 31.81 points or 1.03% to 3,059.17.

On the flip side, Nikkei 225 rose 12.81 points or 0.06% to 21,579.66, Taiwan Weighted gained 19.10 points or 0.18% to 10,531.42 and Jakarta Composite was up by 12.10 points or 0.19% to 6,492.38.
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