Markets trade near the lows of the day ahead of WPI inflation data

Markets losing their momentum are trading near the lowest point of the day in early afternoon session, some profit booking has appeared at the high beta counters that was dragging the markets lower ahead of the WPI inflation data announcement. Also, there was some cautiousness in the market after Finance Minister Arun Jaitley said the government will press ahead with the Rs 40,000 crore tax demand on foreign institutional investors as FIIs lost a case against levy of tax on capital gains they made. There was some scrip specific movement, keeping the markets in action; DCB Bank was up by around 7% after the bank reported a 61% growth in net profit at Rs 63 crore for Q4 FY15. Bank's net interest income rose to Rs 130 crore, 30% higher than the year earlier. Its net interest margin too increased 5 bps sequentially to 3.75%. On the other hand Bharti Airtel was down by over 3% after India’s largest online retailer Flipkart has pulled out of the Airtel Zero programme of India’s largest mobile phone company.

The BSE Sensex is currently trading at 28951.34, down by 93.10 points or 0.32% after trading in a range of 28918.74 and 29094.61. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices trading in green were outperforming the benchmarks; the BSE Mid cap index was up by 0.27%, while Small cap index gained 0.38%.

The top gaining sectoral indices on the BSE were Bankex up by 0.91%, FMCG up by 0.64%, Consumer Durables up by 0.59%, Oil & Gas up by 0.39%, Capital Goods up by 0.29%, while TECK down by 1.29%, IT down by 1.22%, Auto down by 0.89%, INFRA down by 0.48%, Metal down by 0.24% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 3.12%, GAIL India up by 1.55%, SBI up by 1.49%, ITC up by 1.37% and ICICI Bank up by 1.26%. On the flip side, Bharti Airtel down by 3.12%, Mahindra & Mahindra down by 2.68%, Tata Motors down by 2.03%, Sun Pharma Inds. down by 1.91% and Coal India down by 1.81% were the top losers.

Meanwhile, foreign institutional investors (FIIs) have lost a case against levy of tax on capital gains they made. They had gone to a tribunal, which is called Authority for Advance Rulings against levy of 20 percent Minimum Alternate Tax (MAT) on capital gains but got a judgment against themselves as the tribunal decided against them.

Finance Minister Arun Jaitley said the government will press ahead with Rs 40,000 crore tax demand on FIIs as they lost a case against levy of tax on capital gains they made. Jaitley said if the government did not tax FIIs, India would look like a haven. He further added that the amount involved is Rs 40,000 crore and I can change the face of India’s irrigation with that Rs 40,000 crore. He also mentioned that government has abolished the MAT from April 1, 2015, but the demands pertain to tax related to earlier period and FIIs wanted it to be waived.

India introduced MAT in 1997 as a means of combating tax avoidance among domestic businesses. In its budget in February, the Indian government clarified that no FII would be liable for MAT after April 1, 2015. However, in the biggest-ever tax demand slapped on FIIs, nearly 100 foreign funds were asked to cough up an estimated $5-6 billion for ‘untaxed gains’ made by them in the domestic markets over the past years.

Till March 31, close to 100 FIIs got notices from the Tax Department for MAT of 20 per cent and were followed up with Assessment Orders. Foreign investors have said that the move goes against the government's stated position of providing a ‘non-adversarial and stable tax regime’.

The CNX Nifty is currently trading at 8802.75, down by 31.25 points or 0.35% after trading in a range of 8795.05 and 8844.80. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Sesa Sterlite up by 3.22%, Yes Bank up by 1.97%, ACC up by 1.73%, Cairn India up by 1.71% and GAIL India up by 1.45%. On the flip side, Bharti Airtel down by 3.31%, Mahindra & Mahindra down by 2.52%, Sun Pharma Inds. down by 2.27%, Tata Motors down by 2.14% and Idea Cellular down by 2.10% were the top losers.

The Asian markets were showing a mixed trend, FTSE Bursa Malaysia KLCI gained 3.32 points or 0.18% to 1,842.93, KOSPI Index was up by 8.24 points or 0.39% to 2,119.96, Shanghai Composite added 16.08 points or 0.39% to 4,151.65, Straits Times increased 18.23 points or 0.52% to 3,539.31 and Hang Seng surged by 141.55 points or 0.51% to 27,703.04.

On the other hand, Taiwan Weighted lost 102.16 points or 1.06% to 9,540.06, Nikkei 225 was down by 38.92 points or 0.2% to 19,869.76 and Jakarta Composite was trading down by 16.68 points or 0.31% to 5,402.42.