Economies across the world are focussing at rate-tightening measures to curb spending in a bid to bring down inflation
The local market is likely to see a cautious opening on fluctuating global markets. Wall Street closed mixed for the second day amid speculations that the Federal Reserve might begin withdrawing stimulus initiatives in the wake of an overall strength in the economy. Bank of China’s rate hike, after the regional bourses closed yesterday, spooked stock markets across the region, as a result of which key indices in the region were mixed in early trade on Wednesday. The SGX Nifty gained 8.50 points at 5,934.50 from its previous close of 5,926.
The market opened flat on Tuesday on the back of mixed cues from the global arena. The Sensex was up 29 points at 19,731 at the opening and the Nifty gained 16 points at 5,924. The indices scaled the day's high in the first few minutes of trading with the Sensex at 19,770 and the Nifty at 5,929. However, the market could not sustain the gains and slipped into the red thereafter on profit booking. Amid sharp volatility, the indices made a feeble attempt to push into positive territory in mid-morning trade, but sellers had strong control and ensured that the market stayed in the red.
Trading remained range-bound in the noon session, with the benchmarks touching the day's lows at around 12.40pm. Erasing most of the gains accrued yesterday, the Sensex tanked 179 points to 19,524 and the Nifty was down 52 points at 5,856 at the intra-day lows. The indices crawled into the green for a brief moment in the last half hour, but soon slipped and closed almost unchanged, albeit with a mixed bias. The Sensex ended 15 points lower at 19,687 and the Nifty settled two points up at 5,910.
Markets in the US closed mixed for the second day on speculations that the Fed might begin withdrawing stimulus measures in the wake of a gradual rebound in the economy. The biggest component on the Nasdaq 100, Apple Inc’s saw a cut in its weightage, resulting in the stock falling 0.7% in trade. Marketmen viewed the index rebalancing as a positive for other major technology stocks such as Microsoft, which gained 0.9% and Cisco Systems, which added 0.9%.
Meanwhile, the US House Republicans on Tuesday unveiled a plan to overhaul the federal budget and slash the deficit in coming years by about three-quarters, with a $6 trillion cut in spending and 25% cap on tax rates.
The Dow fell 6.13 points (0.05%) to close at 12,393.90. The S&P 500 shed 0.24 of a point (0.02%) to 1,332.63 and the Nasdaq added two points (0.07%) to 2,791.19.
Markets in Asia were mixed in early trade today following a rate hike by the Chinese central bank, the fourth time since October, in a bid to curb rising prices. Benchmark one-year deposit rates will be raised by 25 basis points to 3.25% and one-year lending rates will be hiked by 25 basis points to 6.31%. The increase takes effect from 6th April.
Speculations that the US Fed implementing controls on interest rates also weighed on investors in the region.
The Shanghai Composite gained 0.45%, the Hang Seng rose 0.06%, the Straits Times added 0.01% and the Taiwan Weighted surged 1.17%. On the other hand, the Jakarta Composite declined 0.21%, the KLSE Composite fell 0.17%, the Nikkei 225 was down 0.21% and the Seoul Composite shed 0.07%.
Brent crude jumped to a two and half year peak above $122 a barrel on Tuesday, gaining for a fourth straight day. Brent crude for May rose $1.16 to settle at $122.22 a barrel after reaching $122.89, the highest front-month price since August 2008.
US crude for May delivery fell 13 cents to settle at $108.34, off Monday's $108.78 intraday peak, which was the highest since September 2008.
Back home, Reserve Bank of India deputy governor Subir Gokarn on Tuesday said high inflation in India, previously considered unacceptable, should not be accepted as “the new normal” and the central bank cannot afford to drop its guard. The central bank has raised interest rates eight times since March 2010, with more rises expected, but headline inflation still topped expectations at 8.31% in February.
Mr Gokarn said high growth—the economy is expected to have expanded by 8.6% in the year that ended in March—was contributing to high inflation.
Mr Soota, who left MindTree on 1st April, told the media that he envisioned Happiest Minds achieving $100 million worth of sales within five fiscal years of operations and to be a full services firm with a global presence
Bangalore: Former MindTree chairman Ashok Soota today announced the establishment of his new business company, 'Happiest Minds Technologies Private Limited', reports PTI.
Mr Soota, who left the company he co-founded on 1st April, told the media that he envisioned Happiest Minds achieving $100 million worth of sales within five fiscal years of operations and to be a full services firm with a global presence.
Happiest Minds, expected to be formally launched for customer delivery in five months, would have six lines of businesses, namely IT services, R&D services, product engineering services, remote infrastructure management, testing and consulting.
"Happiest Minds will focus on new emerging technologies like cloud, social CRM, unified communications, mobility, business intelligence and analytics," he said.
Mr Soota said he was in touch with two venture capitalists to fund the business, but had sufficient funds for the next three months to fund it himself.
Mr Soota on Tuesday reiterated that he doesn't have a non-compete or non-solicit agreement with MindTree.
He also expects to soon partially divest his 11.1% stake in MindTree, valued at Rs1,600 crore. "There was no burning need to divest stake in MindTree right now. I will divest my stake in due course."
He also said the funding would perhaps be higher than any typical start-up in the IT services space.
"Happiest Minds expects to rapidly establish itself as a global player. It will open offices in various cities of the US, Continental Europe, UK, Japan, Singapore and India."
The new company will have marketing offices in Delhi and Mumbai, apart from Bangalore. A Chennai-based marketing agency had been roped to work out the modalities, he said.
Asked if he was in talks with any MindTree co-founder or senior management from Wipro, where he worked as CEO, he said" "I am not in conversation with anyone."
The process of team building begins from today," he said, adding he expects all those interested in being part of the team to reach him following the announcement.
Being a late entrepreneur, he said he expects to bring his vast experience and expertise to the table.
Refusing to draw parallels between MindTree and his venture or on the reasons leading to his exit, he said the word 'Mind' in his former company and new venture was coincidental. "Our bid is to create a niche company and such a company should have multiple service lines. Any other comparison is, I think, only coincidental," he said.
Mr Soota said he plans to list his new venture in due course.
He said his company would be looking at large corporations and medium and small enterprises. "India will be an important market and we expect 10% to 12% of business from within the country. But I feel US will bring us majority of revenue," he said.
Telecom firm says difficult to understand rationale in the $2 billion tax demand that the department itself describes as a test case
New Delhi: Telecom giant Vodafone today said it has filed a petition in the Supreme Court seeking protection against penal action by the income-tax authorities in the $2 billion tax case relating to acquisition of Hutchison's stake in Indian joint venture Hutchison-Essar.
"Vodafone International Holdings BV has filed a petition in the Supreme Court seeking to protect itself against a notice recently received from the Indian tax authorities initiating penalty proceedings against it," the company said in a statement. The petition follows an Income-Tax notice to Vodafone a few weeks back, saying penal action would be initiated against the company in the tax case, PTI reports.
The Income-Tax department had raised a demand of about $2 billion on Vodafone as it failed to deduct (withhold) tax at the time of purchase of majority stake of Hutchison in Hutchison-Essar in 2007 for over $11 billion. The tax case has been pending in the Supreme Court and will come up for hearing on 19th July.
With regard to the petition filed by Vodafone to pre-empt penal action by the Income-Tax department, the company said, "it is difficult to understand the rationale behind the tax authorities seeking to impose penalties on a matter which the tax authorities have, themselves, described as a test case".
Seeking penalties on a "test case" involving a major infrastructure investor, it said, "highlights the unpredictable nature of India's taxation policy. This move is only likely to raise further concerns amongst potential investors into India".
All the advice received by Vodafone during and since the acquisition, the company said, "is that there is no tax, or therefore penalty that arises, and Vodafone will take all appropriate steps to defend itself and its investors against this latest unwarranted action from the tax authority".
The established tax laws are "being reinterpreted in a completely new way" and there are no previous examples of such taxes being imposed in India on an overseas share transfer such as this, it added.