A bout of volatility was witnessed in early afternoon trade as key benchmark indices trimmed intraday gains. At 12:20 IST, the barometer index, the S&P BSE Sensex, was up 75.74 points or 0.28% at 27,311.40. The Nifty 50 index was up 28.40 points or 0.34% at 8,426.40. Indian stocks rose today, 18 January 2017, after reports suggested that the Central Board of Direct Taxes put in abeyance its earlier circular raising foreign investors' concerns over a potential rise in tax liability under indirect transfer provisions boosting sentiment.
After opening higher amid mixed Asian cues, key indices extended intial gains but failed to pick up momentum and trimmed gains in early afternoon trade.
The BSE Mid-Cap index was up 0.56%. The BSE Small-Cap index was up 0.74%. Both these indices outperformed the Sensex. The market breadth indicating the overall health of the market was strong. On BSE, 1,550 shares rose and 899 shares declined. A total of 172 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.
Auto stocks gained. Mahindra & Mahindra (M&M) (up 0.85%), Ashok Leyland (up 0.01%), Maruti Suzuki India (up 0.6%), Eicher Motors (up 1.41%), Hero MotoCorp (up 0.62%), Tata Motors (up 0.27%) and TVS Motor Company (up 0.61%) gained. Bajaj Auto declined 0.33%.
Hit hard by weak consumer sentiment and a cash crunch post demonetisation, the auto industry is pinning its hopes on the forthcoming Budget to boost consumer sentiment.
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Capital goods stocks also gained in a firm market. Bharat Heavy Electricals (Bhel) (up 4.14%), ABB India (up 2.79%), Bharat Electronics (up 0.33%), L&T (up 1.39%), Thermax (up 0.4%), and Siemens (up 1.83%) gained. Havells India fell 0.5%.
PVR rose 2.48% to Rs 1,272.05 after a large bulk deal of 29.66 lakh shares was reportedly executed on the scrip at Rs 1,266 per share in opening trade on the NSE.
Mercator slipped 1.35% to Rs 43.70 after the company fixed issue price of Rs 40.75 for issue of shares to eligible qualified institutional buyers. The announcement was made after market hours yesterday, 17 January 2017.
Mercator said that the qualified institutional placement (QIP) committee of the company has approved the issue price of Rs 40.75, after giving discount of 4.79% i.e. Rs 2.05 per share, on the floor price of Rs 42.80 per share for the shares to be issued and allotted to eligible qualified institutional buyers. The QIP committee also approved issue of confirmation allocation note for the allocation of 2.5 crore shares to the qualified institutional buyers.
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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