Feeble Indian frontline indices have lost a lot of ground from the high point of the day and are cruising towards the neutral line in the afternoon session of trade as gloomy global leads have continued to torment domestic sentiments. Absence of any significant development from the local front too is making matters worse as market participants unenthusiastic remain perplexed about the market outlook amid the growing uncertainties. The rate sensitive counters like Real Estate, Banking and Automobile did the maximum damage on the bourses, exerting hefty selling pressure not only on the benchmark indices but largely on the broader markets. The heavyweights that prevented the frontline indices from drifting into the red territory were Software and Technology, defensive - FMCG and Oil & Gas counters. Meanwhile heavyweights like Reliance Industries and Coal India made their presence felt by climbing around 0.60% and 2% respectively. Coal India overtook Reliance Industries to become the top company in terms of market capitalization, pushing RIL to the number two position in the market cap charts for the first time since Feb 2007. On the global front, European stock markets opened with large cuts as a meeting between German chancellor Angela Merkel and French president Nicolas Sarkozy failed to calm worries over the euro zone debt crisis. On the domestic front, the Prime Minister's justification over anti-corruption crusader Anna Hazare's arrest did not seem to have gone down well with the Indian people at large as Anna stayed determined by not succumbing to political pressure and continuing to fight for an effective Lokpal Bill to root out corruption and nepotism in public life.
Meanwhile, the broader markets showed little resilience and once again suffered nasty laceration amid volatile trades, underperforming their larger peers by a fat margin. The bourses consolidated on weak volumes while the market breadth on BSE was dominantly in favor of declines in the ratio of 857:1699 while 98 scrips remained unchanged.
The BSE Sensex is currently trading at 16,816.46 up by 85.52 points or 0.51% after trading as high as 17,000.38 and as low as 16,748.36. There were 19 stocks advancing against 11 declines on the index.
The broader indices were trading on a weak note; the BSE Mid cap index slipped 0.95% and Small cap shed 1.16% respectively.
On the BSE sectoral space, IT up 1.53%, FMCG up 1.26%, TECk up 0.98%, Oil & Gas up 0.94% and Metal up 0.27% were the major gainers while Realty down 4.49%, Auto down 1.39%, Bankex down 1.15%, Power down 0.41% and CG down 0.11% were the only loser on the index.
Sun Pharma up 2.30%, HDFC up 2.30%, ONGC up 2.23%, Coal India up 2.17% and TCS up 2.15% were major gainers on the Sensex, while DLF down by 7.60%, Tata Motors down 2.80%, Maruti Suzuki down 2.74%, ICICI Bank down 2.53% and M&M down 1.78% were the major losers on the index.
Meanwhile, over the possibility of large scale service tax evasion, the Ministry of Finance is expected to take toughest measures against the people who are not filing tax returns. The ministry is expected to seize property of assesses for not filing tax returns, to ensure the compliance with law.
As of now only 6 lakh of registered service tax assesses have filed their returns, which indicates a good possibility of large-scale evasion of service tax. There are around 15 lakh registered service tax assesses. The intelligence wing of indirect taxes body, the Directorate General of Central Excise Intelligence data shows that the evasion in service tax has increased by almost 70%.
The CBEC has designed an action plan which includes strict measures against the evaders and it also had instructed to field official to take all possible steps to augment service tax collections.
In a letter to field official S Dutt Majumdar, Chairman, CBEC said, 'It has been observed that the said provisions (provisional attachment of property) have not been gainfully utilized by the field formations. The board desires that the use of the said provisions should be increased and these measures should be enforced more strictly'. The CBEC is expected to lose around Rs 37,000 crore because of removal of custom and excise duties on petroleum products, and CBEC is looking to make up for this loss from other resources. The service tax is seen as a source which can help CBEC to make for the revenue loss.
In the current financial year, the government has budgeted around Rs 82,000 crore from service tax an increase in collection by 18.1% from Rs 69,400 crore collected in the last fiscal year. The large service providers from service sectors like construction, BPO, IT, telecom and financial services could face the heat as tax official are set to go after the big players.
To deal with the tax evasion, the CBEC is expected to take strict measures such as investigation of books and provisional attachment of property etc. '(These measures) are intended to make perceptible difference in the shortest possible period while also carrying on the momentum to the subsequent year,' Chairman of CBEC said in a letter to field officials.
The CBEC has also asked the field officials to dispose of high-value cases pending adjudication at various levels. 'I expect all major cases involving revenue in excess of Rs 1 crore to be finalized in the next six months,' Majumdar said.
The S&P CNX Nifty is currently trading at 5,050.75, higher by 14.95 points or 0.30% after trading as high as 5,112.15 and as low as 5,030.30. There were 31 stocks advancing against 19 declines on the index.
The top gainers of the Nifty were HDFC up 2.57%, Sun Pharma up by 2.48%, ONGC up 2.38%, TCS up 2.22% and GAIL up 2.05%.
DLF down 7.68%, Axis Bank down 3.35%, R Com down 3.22%, Maruti down 2.86% and Tata Motors down 2.77% were the major losers on the index.
Asian markets traded on a mixed note, Hang Seng climbed 0.86%, KLSE Composite advanced 0.36% Straits Times inched up 0.10% and Seoul Composite climbed 0.68%.
On the other hand, Shanghai Composite dipped 0.27%, Nikkei 225 shed 0.55% and Taiwan Weighted sank 0.73%.
Stock markets in Indonesia remained close on account of Independence Day holiday. The European markets traded on bleak note as France's CAC 40 eased 0.50%, Germany's DAX shed 1.49% and London's FTSE slipped 0.78%
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