Key benchmark indices extended initial gains and hit fresh intraday high in morning trade buoyed by reports that the Central Board of Direct Taxes put in abeyance its earlier circular that had raised foreign investors' concerns over a potential rise in tax liability under indirect transfer provisions. At 10:20 IST, the barometer index, the S&P BSE Sensex, was up 164.25 points or 0.6% at 27,399.91. The Nifty 50 index was up 54.35 points or 0.65% at 8,452.35.
The Sensex rose 178.07 points or 0.65% at the day's high of 27,413.73 in morning trade, its highest level since 13 January 2017. It gained 21.08 points or 0.07% at the day's low of 27,256.74 in early trade. The Nifty rose 59.55 points or 0.7% at the day's high of 8,457.55 in morning trade, its highest level since 13 January 2017. It rose 5.65 points or 0.06% at the day's low of 8,403.65 in early trade.
The BSE Mid-Cap index was up 0.67%. The BSE Small-Cap index was up 0.7%. Both these indices outperformed the Sensex. The market breadth depicts strength with more than two gainers for every loser on the BSE. 1,453 shares rose and 532 shares declined. A total of 94 shares were unchanged.
As per reports, in a major relief to foreign portfolio investors (FPIs) in India, the Central Board of Direct Taxes (CBDT) yesterday, 17 January 2017, put in abeyance its 21 December 2016 circular that amplified their concerns over a potential rise in tax liability under India's controversial indirect transfer provisions. The move signalled the government's intent to spare small overseas investors in FPIs registered in India from paying taxes in India on redemption of shares/units.
Metal & mining stocks gained in firm market. JSW Steel (up 1.29%), Bhushan Steel (up 0.47%), Hindustan Copper (up 0.69%), Vedanta (up 1.9%), Hindalco Industries (up 1.14%), Hindustan Zinc (up 3.5%), Jindal Steel & Power (up 1.74%), Tata Steel (up 1.7%), Steel Authority of India (Sail) (up 1.43%), National Aluminum Company (up 1.68%) and NMDC (up 1.68%) gained.
The steel ministry has reportedly sought reduction in import duty on both coking coal and nickel -- vital components of steel making -- a move that may revive the sector, in the upcoming Budget 2017-18.
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Telecom stocks were mixed. Bharti Airtel (down 0.66%), and Idea Cellular (down 0.14%) declined. Tata Teleservices (Maharashtra) was flat. Reliance Communications (RCom) gained 1.26%.
Shares of Bharti Infratel fell 0.17%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.
Overseas, Asian stocks were mixed as investors warily await President-elect Donald Trump's inauguration as the President later this week. US stocks retreated yesterday, 17 January 2017, as investors remained cautious in the wake of President-elect Donald Trump's charge that a strong dollar is hurting the economy. Trump's comments on the dollar sent the currency sharply lower.
Trump reportedly told The Wall Street Journal in an interview that published Friday, 13 January 2017, that the US currency was too strong because China was keeping its own yuan weaker. Our companies can't compete with them now because our currency is too strong, and it's killing us, the president-elect said in the interview.
Among economic data in US, the Empire State index for January slipped to 6.5, from a revised 7.6 in December, which was an 8-month high. Any reading above zero indicates improving conditions. Meanwhile, New York Federal Reserve President William Dudley played down the role of inflation in monetary policy decisions. Dudley said inflation is simply not a problem and that a strong dollar would limit corporations' ability to raise prices.
UK Prime Minister Theresa May in a speech indicated Britain will press for a firm exit from the European Union. May said she'll put the terms of the country's exits from the EU to a parliamentary vote. Setting out a vision that could determine Britain's future for generations and the shape of the EU itself, May answered criticism that she has been coy about her strategy with a 12-point plan for what has been dubbed a "hard Brexit".
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