Broader indices outperform the benchmarks in noon trade

The local equity markets are trading choppy in the late morning session despite positive cues from other regional peers and the gains in Dow futures which was up by 15 points in the screen trade. Back home, the BSE Sensex and NSE S&P CNX Nifty are trading above the psychological levels of 19,000 and 5700, respectively. In the sectoral front Metal, PSU, Bankex, Consumer Durables (CD) and Auto counters were witnessing buying interest from investors whereas Capital Goods (CG), IT and TECk counters were subdued in trade. Reliance Infra was up 3.19% today after witnessing huge sell off in past few sessions while HCL Technology up 4.88% was the top gainer in Nifty on the back of reporting good Q3 numbers, the company has reported net profit of Rs 285.97 crore for the quarter ended December 31, 2010 as compared to Rs 255.44 crore for the quarter ended December 31, 2009, up by 11.95%. Its total income has also increased by 34.02% from Rs 1,259.22 crore for the December quarter last year to Rs 1,687.59 crore for the quarter under review. The broader indices were outperforming the benchmark indices at this point of time the BSE Mid-cap index and Small-cap index were up by 0.54% and 0.57% respectively. The market breadth on the BSE was extremely positive; there were 1747 shares on the gainer's side against 816 shares on the losers' side, while 84 shares were unchanged.

The BSE Sensex was marginally down by 1.51 points or 0.01% at 18,980.02.The index touched a high and a low of 19,167.06 and 19,047.96 respectively.

The BSE Mid-cap index and Small-cap index were up by 0.54% and 0.57% respectively.

The main gainers in the BSE sectoral space were Metal up 1.40%, PSU up 0.50%, Bankex up 0.40%,Consumer Durables (CD), 0.39% and Auto up 0.37%.

On the other hand Capital Goods (CG) down 1.03%, IT down 0.89% and TECk down 0.55% were the only losers in the sectoral space.

The major gainers on the Sensex were Reliance Infra up 2.80%, Sterlite Industries up 2.68, M&M up 2.12%, Hindalco industries up 1.87% and ICICI Bank up 1.83%.

On the flip side, Infosys down 1.56%, L&T down 1.49%, HDFC Bank down 0.92%,BHEL down 0.90% and SBI down 0.82%.

Riding on the strong buoyancy seen in the Indian economy, the government is likely to end up earning more revenue than what it has budgeted, particularly in the direct tax space. Indian economy has grown at 8.9% pace in the first half of the current financial year that ends on March 31 compared with earlier expectations of 8-8.5% growth.

On the back of strong growth, tax collections too have been robust. During the April-November 2010 period the direct tax collections have risen nearly 18% to Rs 2.16 lakh crore compared with the level achieved a year ago. As things stand now, government is definitely likely to breach the target. In order to meet the budgeted revenue collections, 14% year-on-year growth in collections will be needed. Current rate of growth is higher than what is needed and therefore the expected outperformance.

With the current growth ahead of the budgeted growth, the Central Board of Direct Taxes (CBDT) is hoping to greater revenue this fiscal. 'We are hoping to exceed the budgeted target for net direct tax collections this fiscal,' said Sudhir Chandra, chairman of the CBDT. According to the estimates of finance ministry, total direct tax collections in the current fiscal may reach Rs 4.5 lakh crore as against the budgetary estimate of Rs 4.3 lakh crore.

The government budgeted target of direct tax collections at Rs 4.3 lakh crore represents more than half of its total tax revenue target of Rs 7.45 lakh crore. At the start of the fiscal, there were apprehensions that the high tax revenue target might not be met in wake of economic uncertainty. However, these apprehensions have proved false and the country is growing close to the trajectory seen in 3-4 pre-crisis years.

High growth in revenue will also help the finance ministry lower its fiscal deficit. The government has already exceeded its non tax revenue target owing to the windfall it got on sale of third generation telecom spectrum at Rs 1.06 lakh crore. This compared with a budgeted figure of Rs 35,000 crore. It is also likely to reach close to its target of Rs 40,000 crore from disinvestment. As such, the excess non-tax revenue and budgeted amount of tax revenue should ensure that fiscal deficit over the year remains below 5.5%, as targeted in the budget.

The S&P CNX Nifty advanced 2.55 points or 0.04% to 5726.60.The index touched a high and a low of 5,747.65 and 5,708.65 respectively.

The top gainers on the Nifty were HCL Technology up 4.88%, SAIL up 4.07%, Reliance Infra up 3.19%, Sterlite Industries up 2.48% and Hindalco Industries was up 2.42%.

The top losers on the index were GAIL down 2.14%, L&T down 1.79%, Siemens down 1.54%, Infosys down 1.51% and Sun Pharma was down 1.29%.

The majority of the regional peers were trading in green; Shanghai Composite zoomed  1.18%, Hang Seng  surged  0.82%, Nikkei 225 climbed 0.36%, Straits Times advanced  0.12%, Seoul Composite inched up 0.92% and Taiwan Weighted  climbed 0.71%.Whereas, Jakarta Composite trimmed 0.15% and KLSE Composite lost 0.24%.

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