Markets continue to trade lower in early noon deals

Indian equity benchmarks continued to trade in red in early noon session, with sensex falling over by 398 points, while Nifty dipped below the 7,650 level, as further sell-off in China forced the market to halt trading for the second time this week. Further, reports that the World Bank lowered its global economic growth forecast for 2016 to 2.9% against its June forecast of 3.3% growth because of sluggish performance from major emerging market economies like china and Brazil, outlook was also dampened sentiment. Moreover, weakness in the rupee against the American currency too weighed on the sentiment. Investors failed to draw any sense with World Bank report that the India is projected to grow by a robust 7.8 per cent this year and 7.9 per cent in the next two years, citing strong investor sentiment and the positive effect on real incomes of the recent fall in oil prices. Meanwhile, share of metal stocks came under strong selling pressure on concerns that the devaluation of the Chinese yuan could make imports cheaper. Oil stocks also tumbled following global crude prices plunging to 11-year lows. 

On the global front, Asian markets were trading sharply in red, as sell-off in Chinese shares with the Shanghai Composite down 7.9% and CSI 300 down over 7%. Back home, the broader markets are underperforming the benchmark indices- BSE Midcap and Smallcap indices are down by 1.80% and 2.10% each. In scrip specific development, share of National Buildings Construction Corporation was trading higher after the company has won orders of Rs 8,523 crore in the month of December 2015.

The BSE Sensex is currently trading at 25007.81, down by 398.52 points or 1.57% after trading in a range of 24991.24 and 25230.35. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.83%, while Small cap index down by 2.11%.

The top losing sectoral indices on the BSE were Auto down by 3.06%, Capital Goods down by 2.72%, Realty down by 2.66%, Metal down by 2.40% and PSU down by 2.22%, while they were no gainers on the sectoral index.

The top gainers on the Sensex were Sun Pharma Inds. up by 0.16% and Bharti Airtel up by 0.02%. On the flip side, ONGC down by 4.84%, BHEL down by 4.41%, Tata Motors down by 4.31%, Maruti Suzuki down by 4.12% and Tata Steel down by 3.78% were the top losers.

Meanwhile, government has collected Rs 2,428.4 crore in taxes after over 600 declarations were made by stash holders to the Income Tax department under the one-time black money compliance window that ended last year. The declarants were liable to pay tax at the rate of 30 per cent and a like amount of 30 per cent by way of penalty on the value of assets declared by December 31, 2015. The amount received by way of tax and penalty upto December 31, 2015 is Rs 2,428.4 crore .

The Central Board of Direct Taxes (CBDT) has said that there was a 'shortfall' in collections under this category as in some cases there was prior information with the taxman which led to the disqualification of the declarations while some payments had come post the December deadline. Under the compliance window provided in the Act (new anti-black money law) which closed on September 30, 2015, there were total of 644 declarations. The amount involved in these 644 declarations was Rs 4,164 crore. In some cases, the department had rejected the undertakings stating that it had prior information about the individuals or entities involved through official channels and they cannot take this route to claim lesser punishment.

CBDT further stated that the shortfall is primarily on account of certain declarations in respect of which there was prior information under the provisions of Double Taxation Avoidance Agreements (DTAAs) and Tax Information Exchange Agreements (TIEAs) or receipt of payment (was made) after December 31, 2015.

The new law, called the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 came into force with effect from July 1, 2015. The Act provided for a one-time compliance window to declare assets held abroad and pay due taxes and penalty on the value of assets declared. Under the new law, a three-month compliance window has been given for disclosure of all undeclared foreign assets, for which they would need to pay 30% tax and 30% penalty. However, after this window anyone with undisclosed foreign assets would have to pay 30% tax and 90% penalty and further would also be liable for jail term of up to 10 years.

The CNX Nifty is currently trading at 7615.30, down by 125.70 points or 1.62% after trading in a range of 7612.25 and 7674.95. There were 2 stocks advancing against 48 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 0.32% and Sun Pharma up by 0.31%. On the flip side, Cairn India down by 6.47%, Vedanta down by 5.06%, ONGC down by 4.93%, BHEL down by 4.56% and Tata Motors down by 4.43% were the top losers.

Asian markets were trading in red; Hang Seng decreased 520.63 points or 2.48% to 20,460.18, Nikkei 225 decreased 394.68 points or 2.17% to 17,796.64, Shanghai Composite decreased 245.95 points or 7.32% to 3,115.89, Taiwan Weighted decreased 138.33 points or 1.73% to 7,852.06, Jakarta Composite decreased 51.14 points or 1.11% to 4,557.84, KOSPI Index decreased 17.88 points or 0.93% to 1,907.55 and FTSE Bursa Malaysia KLCI decreased 5.99 points or 0.36% to 1,661.98.