We had mentioned in Wednesday’s closing report that Nifty, Sensex might record more gains. As expected, the major indices of the Indian stock markets advanced further and closed on Thursday with upto 1.88% over Wednesday’s close. Trading volumes were high on the NSE (more so since it was the derivatives expiry day) and no one was in doubt about the strength of the rally. The trends of the major indices in the course of Thursday’s trading are given in the table below:
Positive global cues, along with fresh influx of foreign funds and a rise in global crude oil prices, lifted the global and Indian equity markets on Thursday. Besides, healthy quarterly results and a strong rupee pushed both the key benchmark indices to their new highest monthly levels. The key indices made substantial gains during the mid-afternoon trade session as healthy buying was witnessed in capital goods, banks and automobile stocks. The BSE market breadth was tilted in favour of the bulls -- with 1,304 advances and 1,142 declines. In terms of broader markets, the midcap and smallcap indices gained more than half a percent each. Initially on Thursday, the key indices opened on a higher note, in-sync with their Japanese peers, and a positive close to the US markets on Wednesday. The domestic indices moved on their upward trajectory aided by positive global cues emanating out of US and Europe. Besides, value buying and fresh influx of foreign funds helped domestic indices surge. In addition, higher crude oil prices and a strong rupee cheered investors. There is however, a word of caution for short-term investors that the market can turn volatile owing to F&O (Futures and Options) expiry session, according to market analysts.
Reserve Bank of India Governor Raghuram Rajan on Thursday said the central bank had been moderating extreme currency volatility through interventions. "The RBI has been moderating periods of extreme volatility in currency through exchange intervention -- though only when the movement is excessive -- and increasing access to foreign exchange reserves, including pooling of reserves," Rajan said while inaugurating a meeting of SAARCFINANCE. On the Indian situation, Rajan described the steps taken to reduce the fiscal deficit, of containing inflation through a combination of better food management, and on a new inflation framework and calibrated monetary policies. India had also embarked "on a clean-up of bad debts in the banking system so as to free bank balance sheets to support growth", he added. The stability of the rupee is important for FIIs to maintain the ability to take back stock market capital gains to their home country in US dollars, and this is clearly a time when FIIs are bullish on the Indian stock markets.
As the government fine-tunes tax regime with countries it has the Double Taxation Avoidance Agreement (DTAA) with, India Inc. has asked the Income Tax department to ensure that Indian firms are not subjected to double taxation. “Difference in accounting practices followed by different countries would lead to a double taxation on the income of an Indian taxpayer,” the Associated Chambers of Commerce and Industry of India (Assocham) said in a statement. The association said it has made a presentation to the Central Board of Direct Taxes (CBDT) suggesting changes in the proposed Foreign Tax Credit (FTC) rules to ensure the Indian taxpayer is not subjected to double tax incidence on income. “A high-level delegation led by Rajesh Garg, chairman of the Assocham national council on direct taxes, recently called on CBDT member Rani Singh Nair and held detailed discussion on the issue,” the statement said. Assocham said it may be possible that in the initial years, FTC exceeds the amount of Indian taxes whereas in the subsequent years, the Indian taxes exceed FTC. The tax policy of the Indian government is important as India is an attractive destination for both FDI and FII investment.
Tata Steel on Wednesday posted a net loss of Rs.3,279 crore for the fourth quarter ended March caused by one-off costs associated with its European business. The company said in a statement that fourth quarter earnings were impacted due to one-off costs associated with the Britain business, such as impairment of non-current assets (Rs.1,724 crore), employee separation compensation (Rs.239 crore) and restructuring and other provisions (Rs.856 crore), among others. "While the pressure on the product prices continued during the quarter both in India and in Europe, our operations during the quarter were very resilient across most of the geographies and have reported much improved underlying performance compared to the previous quarter," said Tata Steel ED (Finance) Kaushik Chatterjee. The company's consolidated revenues for the quarter in question of Rs.29,507 crore were down 12.4% from Rs.33,666 crore in the same period a year ago. Earnings before interest, tax, depreciation and amortisation (EBITDA), or operating income, during the fourth quarter of Rs.2,270 crore, increased 43.7% from Rs.1,580 crore last year. From its India business, the company recorded a net profit of Rs.676 crore and EBITDA of Rs.2,188 crore on revenues of Rs.10,522 crore. "Despite muted market environment, Tata Steel India operations recorded strong growth in the quarter and volumes grew by 16% on the back of growth in high value segments like auto and branded products," the company said. Tata Steel shares closed at Rs325.00, up 0.20% on the BSE.
State-run gas utility GAIL (India) on Wednesday reported a healthy 51% rise in net profits at Rs.770 crore for the fourth quarter ended March buoyed by higher volumes of gas transmission and bigger trading margins. The company posted a net profit of Rs.511 crore in the same period a year ago, GAIL chairman B.C. Tripathi told reporters. "Profit was higher because of higher transmission and trading margins," Tripathi said. GAIL's turnover in the quarter, however, fell 18.3% to Rs.11,627 crore. In the same quarter last year, the company's turnover was Rs.14,235 crore. Sales fell due to a 15% drop in petrochemicals prices and a 38 percent decline in LPG price realisations, the chairman said. For the full fiscal 2015-16, GAIL reported a net profit of Rs.2,299 crore on a turnover of Rs.51,614 crore. In the previous fiscal, the company had a net profit of Rs.3,039 crore. GAIL will import 55 shiploads of 3.5 million tons of liquefied natural gas (LNG) in 2016-17, which was the same volume imported in the previous fiscal, Tripathi said. Gail India shares closed at Rs380.10, down 0.31% on the BSE.
The top gainers and top losers of the major indices are given in the table below:
The closing values of the major Asian indices are given in the table below: