Indian equities continue to show lackadaisical moves in afternoon trades

Indian stock indices failed to capitalize on the momentum despite trading in the green terrain for most of morning trades and have even gone on to breach the psychological 4,850 and 16,100 levels. Trade remained lackluster since the initial moments as investors remained reluctant to initiate large bets and evidently preferred to sit it out until some clarity emerges from Jackson Hole meeting of central bankers where Federal Reserve Chairman Ben Bernanke will use his annual speech to announce another economic stimulus programme. However, domestic benchmarks are witnessing fresh rounds of selling pressure since the opening of European stock exchanges as the indices there have drifted to session's lows after starting on a flat note. On the domestic front, the ADAG pack did the maximum damage on the bourses as major stocks like R Power, R Infra, R Capital and R Com from that group went through heavy pounding in the range of 3%-6%. On the sectoral front, the high beta Real estate counter got lacerated by around two and half a percent after heavyweights like DLF, HDIL and Unitech plummeted over three and half a percent. While the metal pocket too languished at the bottom of the table with over one and half a percent losses after majors like Tata Steel and Coal India sank 2.14% and 3.33% respectively. However, the downside for the markets was limited by gains in rate sensitive Automobile pocket which traded with around a percent gains after majors like M&M and Hero Motor jumped around two percent. Short covering in some IT bellwethers and defensive - Healthcare counters too prevented further downside.

Moreover, the broader markets traded on a pessimistic note in the afternoon trades, declining over half a percent point and underperforming their larger peers. The bourses receded on weak volumes given that this is the first day of a new F&O series while the market breadth on BSE was favor of declines in the ratio of 1500:992 while 120 scrips remained unchanged.

The BSE Sensex is currently trading at 16,080.64 down by 65.69 points or 0.41% after trading as high as 16,256.38 and as low as 16,073.02. There were 12 stocks advancing against 18 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index eased 0.85% and Small cap shed 0.67% respectively.

On the BSE sectoral space, Auto up 1.16%, IT up 0.73%, TECk up 0.37% and Healthcare up 0.14% were the only gainers while Realty down 2.47%, Metal down 1.65%, Power down 1.57%, FMCG down 1.08% and PSU down 1.01% were the major losers on the index.

M&M up 2.66%, Hero Moto up 2.63%, Infosys up 2.11%, Tata Motors up 1.12% and Bharti Airtel up 0.85% were the major gainers on the Sensex, while DLF down by 3.67%, JP associates down 3.45%, Tata Power down 3.32%, Coal India down 2.27% and NTPC down 2.26% were the major losers on the index.

Meanwhile, in a move to reduce the burden of litigation, the finance ministry has considerably raised the monetary threshold for legally contesting indirect tax disputes. The apex indirect taxes body - Central Board of Excise and Customs (CBEC), under the finance ministry, has instructed its officials not to file appeals in the tax tribunals if the fine and penalty on an alleged offender is less than Rs 5 lakh. The existing entry for approaching an appellate tribunal is Rs 1 lakh.

The order will come in effect from September 1, covering all the indirect taxes levied by the central government, i.e., customs duty, excise duty and service tax. The move is aimed to cut down on the unnecessary proceedings. On the other hand, the ministry has also raised the monetary limit for filing appeals in high courts to 10 lakh from 2 lakh now, and in the Supreme Court to Rs 25 lakh as against Rs 5 lakh at present.

The ministry has, however, clarified that adverse judgments, irrespective of the amount involved, would be contested in cases where the constitutional validity of the provisions of an Act or rule are under challenge, and where notification, instruction, order or circular has been held illegal or ultra vires. The ministry also added that, monetary limit will also apply in all cases where audit objections have been accepted by the department. In such cases, officials would have to carry on raising defensive demands, but monetary limit would have to be considered before filing appeals.

The finance ministry has been compelled to amend the rules because of the high volume of tax-related cases awaiting in courts. The threshold for litigation was introduced only last year. It is reported that around 87,862 appeals are pending at various levels as on March, locking up over Rs 62,000 crore in indirect taxes. The new rules are in line with country's national litigation policy that seeks to make the government a well-organized and responsible litigant. The CBEC has already revised the monetary threshold to cut litigation in direct tax disputes.

The S&P CNX Nifty is currently trading at 4,824.90, lower by 14.70 points or 0.30% after trading as high as 4,872.00and as low as 4,824.45. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were M&M up 2.80%, Hero Moto up by 2.78%, Infosys up 2.73%, Dr Reddy's up 1.27%, and Tata Motors up 1.18%.

R Capital down 5.67%, R Com down 5.62%, R Infra down 4.22%, DLF down 3.98% and R Power down 3.60% were the major losers on the index.

Asian markets traded on a mixed note, Shanghai Composite eased 0.26%, Jakarta Composite declined 0.70%, KLSE Composite plunged 1.42% and Straits Times sank 0.51%.

On the other hand, Hang Seng added 0.01%, Nikkei 225 advanced 0.29%, Seoul Composite climbed 0.81% and Taiwan Weighted amassed 0.46%.

The European markets traded on weak note as France's CAC 40 slipped 0.25%, Germany's DAX declined 0.55% and London's FTSE shed 0.33%. 

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