Nifty tests 7,900 even as Jaitley calms nerves on capital gains tax

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The benchmark indices continued to trade lower even as Finance Minister assured investors the government does not plan to impose a long-term capital gains tax, a day after Prime Minister suggested that people earning from financial must make a “fair contribution” to nation building.

 

At 10:42 am, the S&P BSE was trading at 25,816, down 223 points, while Nifty50 was ruling at 7,913, down 72 points.

 

“Short term outlook for the market remains negative till trades below 8,275 levels. We expect targets in the range of 7,715-7,680 levels in short term. Medium term outlook also remains negative till trades below 8,737 levels. We expect targets in the range of 7,500-7300 levels in the medium term. Traders should use any kind of rise or consolidation to sell till trend reverses,” said Devang Shah, independent market consultant & advisor.

Sectors and stocks

All stocks on were trading in red. Cipla (down 3.13%), Axis Bank (down 2.26%), Adani Ports (down 1.79%) and Lupin (1.62%) fell the most.

Divi’s Laboratories extended losses to tank over 10% after falling 24% intra-day on Friday. The plunge came after a brokerage report cited ‘manipulated data records’ as one of the observations made by the US Food and Drug Administration (USFDA) against its Vizag facility. The Hyderabad-based drug firm did not deny or acknowledge the authenticity of the said remarks, which appeared in the Form 483 observations of the US drug regulator, as disclosed in its report by stock broking firm Emkay Global.
Among gainers, Camlin Fine Sciences surged over 4% after the company announced that it has entered into a share purchase agreement to acquire 51% stake in an entity in China, which shall be subject to certain conditions being fulfilled prior to the said acquisition and regulatory approvals.

December F&O expiry

 

This week is crucial for as it will mark the end of month and calendar year too. Also, we have derivative expiry of December series scheduled on Thursday, wherein unwinding and rollover of positions will provide some cues for the next month.

 

“Amid all negativity, participants are hopeful that final week would bring in some cheer to the markets,”said Jayant Manglik, President, Retail Distribution, Religare Securities.

 

Jaitley calms nerves

 

In a bid to calm frayed nerves of stock market players, Finance Minister on Sunday clarified the government has no intention to impose a tax on long-term capital gains from trading in shares. He went on to blame “some sections” of the media for “misinterpreting” Prime Minister Narendra Modi’s speech in Mumbai on Saturday.

 

“The Prime Minister’s speech in Mumbai on Saturday has been misinterpreted in some sections of the media, which have started speculating this is an indirect reference to the fact that there could be long-term capital gains (tax) on securities transactions,” said Jaitley.

 

Council meeting remains inconclusive

 

The Council could not evolve a consensus on the issue of dividing the administrative powers between the Centre and states in its two-day meeting which concluded on Friday even as it cleared all other provisions of draft model Bill and whole of compensation Bill. The next meeting of the Council will take place on January 3 and 4.

 

Global markets

 

Asian were trading mixed. China’s Shanghai Composite index fell 0.84% to 3,279 on Monday morning, while Japan’s Nikkei fell 0.09% to 19,412. Major global remained shut on account of Christmas and Boxing Day holidays.

 

On Friday, Wall Street ended the week on a positive note as investors doubled down on a rally fuelled by optimism that President-elect Donald Trump’s policies will boost economic growth.

 

The Dow Jones advanced 14.86 points, or 0.07%, to close at 19,933.74. The S&P500 rose 2.75 points, or 0.12%, to settle at 2,263.71. The Nasdaq Composite added 15.27 points, or 0.28%, to finish at 5,462.69.