Markets trade in red; broader indices outperform

Domestic markets continue to remain sideways in the mid morning trade as the investors are still lacking confidence to go whole heartedly in the equity markets on grim economic reports from the global markets. The benchmark indices that made a soft start managed to recover the losses in first hour of trade but the profit booking at higher levels has once again pulled them in red. The maximum pressure is being witnessed at the IT and technology counters that surged in previous session, though healthcare and realty counter are witnessing some demand and are leading the gainers pack. The battered down banking sector too is trading in green with some private sector banks moving higher in early trade. The broader indices continue to remain firm, outperforming the benchmarks and both the mid cap and small cap indices are up by over half a percent each. The scrips of Coal India are in somber mood since beginning as the pollution control board of Jharkhand state has ordered its unit BCCL to close 22 open cast and underground mines in the state.

The BSE Sensex is currently trading at 16,435.46 down by 63.01 points or 0.38%. The index has touched a high and low of 16,533.22 and 16,405.50 respectively. There were 11 stocks advancing against 19 declines on the index.

The broader indices are trading firm and BSE Mid cap index was up by 0.67%, while Small cap index was up by 0.91%.

The top gaining sectoral indices on the BSE were, HC up by 0.55%, Realty up by 0.50%, CD up by 0.43%, Bankex was up by 0.15% and CG was up by 0.13%. While, IT down by 1.33%, TECk down by 0.87%, Metal down by 0.51%, Auto down by 0.45% and Power down by 0.36% were the top losers on the index.

The top gainers on the Sensex were HDFC up by 1.18%, Hindalco Industries up by 1.135, Cipla up by 1.08%, JP Associates up by 0.80% and DLF up by 0.77%.

On the flip side, Jindal Steel down by 3.14%, Tata Power down by 2.74%, Coal India down by 2.02%, TCS down by 1.58% and Hero Moto Corp down by 1.35% were the top losers on the Sensex.

Meanwhile, the government is expected to levy Minimum Alternate Tax (MAT) on the construction sector as the Comptroller and Auditor General (CAG) pointed out loop holes in the existing system. On August 23, the CAG in its report pointed out that the construction business incorporated as firms and association of persons, or AOPs, have escaped the MAT levied on companies. The CAG also released its report on Duty Entitlement Pass Book scheme (DEPB) and service tax on banking and other financial services.

Anupam Kulshreshtha, Director General, CAG said, 'as MAT is not applicable to firms/AOP, these entities get away by paying nil or minimal tax resulting in huge amounts of revenue being foregone by the government despite these companies making comparable profits from their business.'

In its report CAG said, 'we recommend that the purview of section 115JB i.e. MAT may be extended to Firms/AOPs who are taking advantage of deductions or incentives available in the Act.' The report noted that a number of entities engaged in the construction sector were registered as firms/AOP.

The CAG in its report found that the turnover and profits of AOPs were comparable to some companies in the construction sector. The CAG recommendation has been accepted by the Central Board of Direct Taxes (CBDT). The report also noted that the section 80IB (10) incentives to the low and middle income housing was being appropriated by high income groups. However on this, the CBDT said, the section 80IB (10) was being phased out.

The S&P CNX Nifty is currently trading at 4,938.60, lower by 10.30 points or 0.21%.  The index has touched a high and low of 4,962.40 and 4,918.65 respectively. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were Reliance Capital up by 3.57%, RCom up by 3.39%, Axis Bank up by 1.80%, Ranbaxy up by 1.79% and Cipla was up by 1.35%.

On the flip side, Jindal Steel down by 3.32%, Tata Power down by 3.07%, TCS down  by 1.84%,ITC down by 1.40% and  Hero Moto Corp down 1.30% were the major losers on the index.

The Asian markets continue to trade mixed; Shanghai Composite was up 0.22%, Jakarta Composite was up by 0.10% and KLSE Composite was up by 0.25%.On the other hand Hang Seng was down by 0.81%, Nikkei 225 was down by 57%, Straits Times was down by 0.36%, Seoul Composite was down by 0.10% and Taiwan Weighted was down by 0.53%. 

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