Mayhem continues at Dalal Street; Nifty breaches 7,600 mark

Bloodbath continued at Dalal Street in noon deals with frontline gauges declining below their crucial 25,000 (Sensex) and 7,600 (Nifty) levels, as selling pressure intensified after trading in Chinese shares was suspended for the second time this week. Sentiments also remain dampened with the World Bank lowering 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. Weakness in the rupee against the American currency and slump in crude oil prices to multi-year lows too weighed on the sentiment.

On the global front, all the Asian markets were trading with a deep cut at this point of time amid a sell-off in Chinese shares with the Shanghai Composite down 7.9% and CSI 300 down over 7%. Trading was halted on the stock exchanges for the day after the benchmarks hit their circuit limit. Back home, metal stocks slumped after the devaluation of yuan would lead to exports becoming costlier. Selling was both brutal and wide-based as none of sectoral indices on BSE was spared. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 529 shares on the gaining side against 2,153 shares on the losing side while 85 shares remain unchanged.

The BSE Sensex is currently trading at 24927.66, down by 478.67 points or 1.88% after trading in a range of 24896.44 and 25230.35. There were 0 stocks advancing against 30 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.50%, while Small cap index down by 2.90%.

The top losing sectoral indices on the BSE were Realty down by 3.82%, Auto down by 3.35%, Capital Goods down by 3.17%, Power down by 3.09% and PSU down by 2.89%, while there were no gainers on the index.

The top losers on the Sensex were BHEL down by 5.89%, Tata Motors down by 5.29%, ONGC down by 4.95%, Maruti Suzuki down by 4.50% and Tata Steel down by 4.21%, while their were no gainers on the Sensex.

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 7588.60, down by 152.40 points or 1.97% after trading in a range of 7580.80 and 7674.95. There was 1 stock advancing against 49 stocks declining on the index.

The lone gainer on Nifty was Power Grid up by 0.11%. On the flip side, Cairn India down by 7.72%, BHEL down by 6.25%, Vedanta down by 5.85%, Bank of Baroda down by 5.51% and Tata Motors down by 5.22% were the top losers.

All the Asian markets were trading in red; Hang Seng declined 611.57 points or 2.91% to 20,369.24, Nikkei 225 dropped 423.98 points or 2.33% to 17,767.34, Shanghai Composite tumbled 245.95 points or 7.32% to 3,115.89, Taiwan Weighted fell 138.33 points or 1.73% to 7,852.06, Jakarta Composite decreased 51.78 points or 1.12% to 4,557.20, KOSPI Index shed 21.1 points or 1.1% to 1,904.33 and FTSE Bursa Malaysia KLCI was down by 6.93 points or 0.42% to 1,661.04.