Sensex pares gains, Nifty tests 8,400; Tata Steel top gainer

The benchmark indices pared gains, but were still trading higher after the Income Tax (I-T) Department soothed foreign investors’ nerves by putting in abeyance its December 21 circular that amplified their concerns over a potential rise in tax liability.

Gains were capped by mixed trade seen in Asian markets after Britain’s Prime Minister Theresa May set out a vision for a clean break with the European Union.

At 2:12 pm, the S&P BSE Sensex was trading at 27,264, up 28 points, while the broader Nifty50 was ruling at 8,413, up 15 points.

“Going ahead, as long as the intraday support of 8,370 on Nifty remains intact, we may see index consolidating with a positive bias. On the higher side, we would continue with our near term levels of 8,460-8,510,” said Angel Broking in a technical note.

Meanwhile, on Tuesday, foreign investors turned net buyers for the first time since December 20 and bought equities worth Rs 142 crore, while domestic investors sold equities worth Rs 607 crore.

Sectors and stocks

NTPC, Hindustan Zinc, Adani Power, Tata Steel and Steel Authority of India (SAIL) were among 24 stocks from the BSE500 and Small-cap indices hitting their respective 52-week highs in intra-day trade.

Dalmia Bharat, Datamatics Global Services, Mastek, Pokarna, Sonata Software, Graphite India and Sterlite Technologies were other stocks that hit their 52-week highs.

Hinduja Ventures gained over 3% to Rs 511 after the company disinvested 61.10 million shares of Hinduja Energy (India) shares held by Hinduja Ventures. 

Delta Corp tanked 5% to Rs 128 even as the company reported a net profit of Rs 1.76 crore, down 78%, against Rs 8.03 crore in the corresponding quarter last year. 

Tax breather for FPIs

Foreign portfolio investors (FPI) can now breathe easy with the Income Tax (I-T) Department on Tuesday putting in abeyance its controversial circular on taxing India-dedicated funds. The circular, in the form of frequently asked questions (FAQs), had spooked the markets when it was issued last month. Experts expect the finance ministry to amend the law in the Budget to put an end to the controversy.

Theresa May outlines ‘Brexit’ plans

May promised a parliamentary vote on Britain's deal to leave the EU and sought to draw a line under discussion of a "hard" or "soft" Brexit. She promised to seek the greatest possible access to European markets but said Britain would aim to establish its own free trade deals with countries far beyond Europe, and impose limits on immigration from the continent.

Dollar near six-week low

The dollar index wallowed near six-week lows on Wednesday, pressured by US President-elect Donald Trump's comments showing concern over the currency's strength. In an interview with the Wall Street Journal, Trump said US companies "can't compete with (China) now because our currency is strong and it's killing us."

Global markets

Asian stock markets held near three-month highs as investors scooped up exporter shares after US President-elect Donald Trump expressed concerns over a stronger dollar.

In Asia, MSCI's ex-Japan Asia-Pacific shares index rose 0.3%, just shy of a three-month high hit last Thursday. Stock markets in Hong Kong and China led the gains.

Japanese stocks bucked the trend and fell to five-week lows. Japan’s Nikkei was down 0.35%.

Overnight, the Dow Jones Industrial Average index dropped 58.96 points, or 0.3%, to close at 19,826. The S&P500 index declined 6.75 points, or 0.3%, to 2,267. The Nasdaq Composite index fell 35.39 points, or 0.63%, to settle at 5,538. 

(With inputs from agencies)