Benchmarks add losses; Nifty slips below 8250 mark

Indian bourses adding losses, continued to trade in red in the late morning session, with the Sensex losing over 200 points and Nifty falling below the 8250 level, due to declines in blue chip stocks on continued worries about retrospective taxes and lower-than-expected January-March earnings so far. Sentiments were weighed down after Commerce and Industry Minister Nirmala Sitaraman highlighted that country failed to achieve its export targets of $340 billion set for 2014-15 due to economic slowdown in many countries across the world and that the markets were yet to fully recover from the financial crisis of 2007-08.  Besides, investors remained cautious ahead of central bank meetings this week in the United States and Japan and because of the deadlock in creditors' talks with Greece. However, losses remained capped with Finance Minister Arun Jaitley’s statement in order to contain the adverse fall out of MAT levy on foreign investors that the Indian government will set up a high- level committee to sort out the taxations issues of the past and make the system predictable. Also, the long-pending Bill on Goods and Services Tax (GST), that was moved in the Lok Sabha amid stiff resistance by several Opposition parties, would be taken up for consideration and passing today.

Meanwhile, shares of mid and small-sized companies were too under pressure with both the mid-cap and small-cap indices down over 2% each on the bourses. The markets are likely to be volatile ahead of the upcoming April derivatives expiry on Thursday. On global front, Asian stock markets were mostly in positive territory on Monday, tracking the gains on Wall Street Friday and as higher commodity prices lifted resource stocks. Meanwhile, traders also remained focused on corporate earnings results. Back home, Extending losses for the third consecutive day, Indian Rupee shed 21 paise to hit a four-month low of 63.77 against the US dollar in early trade due to continued demand for the American currency from importers.

Back on street, all sectoral indices on the BSE were in the red with BSE Consumer Durables index emerging as the top loser down nearly 2.5% followed by Realty, IT and Auto indices among others. In scrip specific development, Shares of Siemens surged after reporting 83% year on year jump in its standalone net profit at Rs 162 crore for the quarter ended 31 March 2015 due to a strong operating performance. Further, Cholamandalam Investment and Finance rose after the company posted 48% growth in net profit during the quarter ended March 31, at Rs 137 crore against Rs 92 crore for the same quarter of the previous financial year.

The market breadth on BSE was negative, out of 2219 stocks traded, 420 stocks advanced, while 1729 stocks declined on the BSE.

The BSE Sensex is currently trading at 27222.49, down by 215.45 points or 0.79% after trading in a range of 27210.10 and 27567.28. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.32%, while Small cap index down by 2.96%.

The top losing sectoral indices on the BSE were Consumer Durables down by 2.43%, Realty down by 2.30%, IT down by 1.70%, Auto down by 1.51% and Capital Goods down by 1.51%, while there were no gaining indices on BSE.

The top gainers on the Sensex were NTPC up by 1.57%, Sesa Sterlite up by 1.00%, ICICI Bank up by 0.49%, ITC up by 0.48% and Coal India up by 0.32%. On the flip side, Dr. Reddys Lab down by 2.43%, Infosys down by 2.32%, SBI down by 2.23%, BHEL down by 2.16% and Hero MotoCorp down by 2.07% were the top losers.

Meanwhile, amid wide criticism and in order to contain the adverse fallout of the Minimum Alternate Tax (MAT) levy on foreign investors’, finance minister Arun Jaitley has said that the government would set up a high-level committee to sort out the taxations issues of the past and make the system predictable. Jaitley further said that this committee will be instructed to report back expeditiously so that early actions can be taken.

Finance minister though said that the disputes now attracting attention are legacy cases, which are tax demands arising from actions that the tax authorities and the judiciary took before NDA government came to power. He added that the decision was taken not by the government but by quasi-judicial bodies, which were created - well before the present government came to power - to reassure investors that the tax system would be free of political interference. He said the 2015-16 Budget has done away with taxation which could be construed as unfriendly to investors. Where, while general anti-avoidance rules has not been implemented, minimum taxes on foreign portfolio investors have been removed.

Earlier, following a ruling by the AAR, the revenue department has sent notices to 68 foreign institutional investors (FIIs) for payment of dues totalling Rs 602.83 crore towards MAT.The MAT provision was introduced to make sure the large companies that did not pay taxes due to various tax incentives could be brought under the revenue department’s net. But the tax department had sought to impose the same rule on FPIs (formerly referred to as foreign institutional investors, or FIIs) and foreign private equity firms structured as corporate entities.

The CNX Nifty is currently trading at 8227.95, down by 77.30 points or 0.93% after trading in a range of 8224.35 and 8334.45. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were NTPC up by 1.64%, Sesa Sterlite up by 1.05%, Idea Cellular up by 0.96%, ICICI Bank up by 0.49% and Ultratech Cement up by 0.48%. On the flip side, Lupin down by 3.13%, Tech Mahindra down by 2.97%, Asian Paints down by 2.94%, Bank of Baroda down by 2.90% and Hero MotoCorp down by 2.28% were the top losers.

Asian markets were trading in green; Straits Times increased 0.07%, FTSE Bursa Malaysia KLCI was up by 0.02%, Taiwan Weighted rose 0.58%, Shanghai Composite added 2.2% and Hang Seng was up by 1.28%. On the flip side, Jakarta Composite tumbled 2.7%, Nikkei 225 decreased 0.3% and KOSPI Index shed 0.21%.