Weakness continues on Dalal Street; barometer indices below their crucial level

Indian equity markets have lost more ground due to sour inventor's sentiment which is hit by scams and redemptions by FIIs are making matter worse amidst the micro economic concerns as rising inflation is hurting bottom lines. The local bourses tracking regional counterparts are on the declining path and the investor's sentiment remain cautious ahead of the Index of industrial production (IIP) data, due to be released on February 11, 2011. Both the barometer indices i.e. Bombay Sensitive 30 index--BSE Sensex-- and the 50 share index--Nifty--on NSE at the moment are trading below their physiological level of 18,000  and 5400 respectively. On the global front, despite Wall street gains, Asian shares were trading weak but Japan's Nikkei touched a 9-month high as hopes of a sustained economic recovery for the rich world encouraged investors to switch funds from emerging to developed markets. Returning to Dalal Street, the broader indices tailing their larger peers too clobbered out of shape with a cut of 1.00% each. On the BSE Sectoral front, only stocks from IT and TECk counters were sporting spirit, while stocks from Realty, Consumer Durable, Oil & Gas had surrendered the most to the selling pressure. The overall market breadth was in the favour of declines which whipped advances in the ratio of 1518:737, while, 92 shares remained unchanged on the index.

The BSE Sensex is currently trading at 17,958.15, down by 79.04 points or 0.44%. The index touched a high of 18,141.51 and low of 17,948.56 respectively.  There were 11 stocks advancing against 19 declines while on the index.

The broader indices were trading in the red; the BSE Mid cap and Small cap indices were down by 1.00% and 0.95%, respectively.

The only two gaining sectoral indices on the BSE were, Information Technology up by 0.30% and  TECk up by 0.29%, while, Realty down by 2.18%, Consumer Durables down by 1.41%, Oil and Gas down by 1.07%, Capital Goods down by 1.06%, and Auto down by 0.92% were the major losers on the index.

The top gainers on the Sensex were Tata Power up by 2.59%, Cipla up by 1.51%, Bharti Airtel up by 0.93%, Bajaj Auto up by 0.87%, and HDFC was up by 074%.

M&M down by 2.73%, ONGC down by 2.42%, JP Associates down by 2.34%, Hero Honda down by 1.80% and ICICI Bank down by 1.66% were the top losers on the index.

Meanwhile, tax revenue of the Union government continues to remain buoyant riding on a strong economy expanding at a robust pace. According to the latest data released by the government, direct tax collections between April-January period of current financial year have reached Rs 3,17,501 crore, against Rs 2,63,765 crore in the same period a year ago, registering a growth of 20.3%.

Looking at the sub-segments, the corporate income tax receipts in first 10 months of 2010-11 stood at Rs 2,16,872 crore, up 24.78% from Rs 1,73,799 crore in the corresponding period last year. Personal income tax collections, including securities transaction tax and residual fringe benefit tax/ banking cash transaction tax, grew by 11.87% to touch Rs 1,00,191 crore, as compared to Rs 89,561 crore in the year-ago period.

The government had budgeted the overall tax revenue for FY11 at Rs 7,46,000 crore. However, given the higher economic growth and strong buoyancy in tax revenue, the target was revised to Rs 7,82,000 crore last month. The Budget estimate for direct taxes was at Rs 4,30,000 crore and was increased by Rs 17,000 crore. The IT department will thereby have to collect about Rs 1,30,000 crore more in the next two months to meet the revised target of Rs 4,47,000 crore.

The tax refunds over the period under review stood at Rs 53,688 crore against Rs 38,721 crore last year, registering a growth of 39%. The Chairman Central Board of Direct Taxes has issued instructions to all chief commissioners to ensure that all refunds below Rs 10 lakh are transferred in the bank accounts of assesses by March 2011. The government has been upgrading its IT architecture to speed up the income tax assessment.  

The S&P CNX Nifty is currently trading at 5,378.35, down by 17.65 points or 0.33%. The index touched a high of 5,432.35 and low of 5,368.35 respectively. There were 19 stocks advancing against 30 declines, while 1 stock remained unchanged on the index.

The top gainers of the Nifty were Tata Power up by 2.82%, BPCL up by 2.09%, Cipla up by 1.72 %, Bajaj Auto up by 1.31% and Hindalco up by 1.20%.

The top losers of the index were JP Associates down by 4.14%, ONGC down by 2.90%, M&M down by 2.86%, Sunpharma down by 2.44%, and Hero Honda was down by 2.38%.

Asian markets were trading mostly in the red; Hang Seng down by 0.46%, Jakarta Composite dropped 0.17%, Straits Times declined 0.23%, Seoul Composite shed 0.70% and Taiwan Weighted slid 0.36%.

On the flip side, KLSE Composite was up by 0.34% and Nikkei 225 added 0.33%

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