Policymakers are worried about the pace of the economic recovery across the globe amid rising prices
The Indian market is likely to see a range-bound opening on the back of negative cues from the global markets and domestic inflationary pressures. Wall Street settled lower on Monday on economic concerns in the US and debt issues plaguing countries in Europe. The Asian pack opened weak on Tuesday on growth concerns and profit booking. The SGX Nifty was 10 points down at 5,480 compared to its previous close of 5,490.
The steep hike in petrol prices which came into force on Sunday, rattled investors, and led to the market opening lower. Negative cues from the global arena also added to the woes. The Sensex opened 31 points lower at 18,493 while the Nifty opened at 5,542, three points off its Friday close. Nervousness ahead of the announcement of headline inflation data also added to the sluggishness, and saw indices range-bound in negative terrain. The market touched its intra-day high in the first hour of trade, with the indices around the opening levels.
The market pared some of its losses as inflation numbers were marginally lower. Concern is already building that despite easing headline inflation, high fuel costs could lead the Reserve Bank of India (RBI) to go in for further tightening measures in June.
The market dropped in the post-noon session on the possibility that the government may also increase diesel and domestic LPG prices. The indices touched their intra-day lows in post-noon trade, with the Sensex at 18,320, down 211 points, and the Nifty off 57 points at 5,488. However, the market closed a little above these levels. The Sensex settled at 18,345, down 186 points and the Nifty closed at 5,499, down 46 points.
If the Nifty is able to keep itself above 5,540, we can expect the market to see some gains. The first resistance for the Nifty is at 5,650 but if the Nifty declines to below 5,472, we may see the market head for 5,390.
Markets in the US closed lower on signs of economic weakness as a gauge of manufacturing in New York State declined more-than-expected in May to its lowest level in five months, the New York Federal Reserve said. The Empire State Manufacturing Index fell to 11.88 in May from 21.7 in April, the lowest level since December 2010. Besides, White House and congressional Republicans have not been able to reach a consensus over the deficit and the debt ceiling. A failure to raise the debt limit could lead to a worse financial crisis than the one in 2008-09, president Barack Obama warned. This apart, European debt issues also weighed on investors’ sentiments.
The Dow Jones declined 47.38 points (0.38%) to close at 12,548.37. The S&P 500 fell by 8.30 points (0.62%) to settle at 1,329.47 and the Nasdaq was down 46.16 points (1.63%) to 2,782.31.
Markets in Asia opened lower on Tuesday on concerns about the pace of global growth and profit booking after recent gains. Global financial firm Moody’s Investor Services said Greek default losses may “far exceed” bank loans. Authorities stepped up pressure on Greece to sell assets and expand spending cuts to win an increase of its 110 billion- euro ($156 billion) aid package and more time to repay the loans.
The Shanghai Composite fell by 0.51%, the Hang Seng declined 0.58%, the Nikkei 225 lost 0.44%, the Seoul Composite retreated 0.29% and the Taiwan Weighted was down 0.28%. Markets in Singapore, Malaysia, Thailand and Indonesia are closed for a public holiday.
Back home, the new Index of Industrial Production (IIP) which will come into effect from 10th June, with the base year 2004-05, has been approved by the Committee of Secretaries (CoS).
Production trend in 100 new items, including ice cream, fruit juices and mobile phones will be included in the new index. It will also have items like computer stationary, newspapers, chemicals like ammonia, ammonia sulphate, electrical products like solder power systems, gems and jewellery and molasses.
On the other hand, obsolete articles like typewriters, loud speakers and VCRs would be taken off to make the series representative of the present-day industrial production and demand scenario.
Moneylife investigation reveals that the mysterious trail of Speak Asia runs through several India companies and the money is being remitted to purchase 'survey software' from a company linked to the shadowy promoters
Some new, worrying details about Speak Asia, the flashy survey company that has ensnared millions of gullible Indians over the past few months, are now available from a Moneylife investigation.
It now appears that Speak India Network Marketing P Ltd is a company registered in Mumbai, with Indian directors. This company and Speak India Online are collecting money from survey panelists and have accounts in ICICI Bank, ING, State Bank of India and a dozen others. Each bank has remitted Rs50 crore to Rs180 crore. About Rs1,000 crore has already been transferred abroad. The money remitted to these accounts are pooled into a company called Tulsiateck, which is also registered in Mumbai.
Our sources tell us that Tulsiateck remits funds to buy "survey software" from a company called Haren Ventures Pte of Singapore owned by Harender Kaur, who sometimes appears as a promoter of Speak Asia at mega events such as the glitzy conference recently held in Goa. The money from Haren Ventures in Singapore may or may not be going to Speak Asia Singapore, the company in whose name this massive 'survey' company has enrolled 1.9 million panelists. Haren Ventures is the distributor of e-zine "Surveys Today". Interestingly, it is also into trading in coal from Kalimantan mines in Indonesia, for China and India, shows a Google search.
We now learn from the banks that some of the accounts of Speak India have been frozen for possible legal violations. If banks take a tough stand, Speak Asia may fold up as quickly as it grew.
For months together there has been no clarity about Speak Asia's business model and no information has been forthcoming as to who owns Speak Asia and how it makes money. It appeared to be another chain-marketing scheme, which was distributing liberal patronage to the Indian media, hiring expensive advertising and public relations firms, even as it was spreading its tentacles at lightening speed.
After the banks have frozen the accounts for possible foreign exchange violations, it should now become an issue that has to be investigated by the Enforcement Directorate, which has clearly been sleeping on its job. The pooling of funds and the import of bogus software is in the jurisdiction of the Enforcement Directorate.
Strangely enough, at the press conference Speak Asia held on Monday, company officials neatly evaded all issues, saying it was collecting Rs11,000 as a deposit from panelists. It claimed that this money was the subscription price for the spectacularly expensive magazine called "Surveys Today".
The Ministry of Finance and the Ministry of Corporate Affairs have done nothing so far to follow the trail of the large sums of money raised by this company and its modus operandi. Right from the growth of Speak Asia, Moneylife has been warning the public about this company. Recently, two TV channels also telecast detailed reports on the issue.
The court said despite the department coming to know about tax evasion cases in 2008, it started taking action only after March this year after it was directed to file action taken report. The court added that had it not intervened, the officials would have "slept over it" and the oversees probe would not have proceeded
New Delhi: The Supreme Court today pulled up the Income Tax (I-T) department for not taking timely action against the companies involved in the second generation (2G) spectrum allocation scam and said had it not intervened, the officials would have "slept over it" and the oversees probe would not have proceeded, reports PTI.
The court said despite the department coming to know about tax evasion cases in 2008, it started taking action only after March this year after it was directed to file action taken report.
"We are sure they (I-T department) would have slept over it otherwise (if it had not intervened). There is no doubt about it," a bench comprising justices GS Singhvi and AK Ganguly said.
Additional Solicitor General Vivek Tankha, appearing for the department, tried to justify the delay saying that big companies are involved in the case and they are creating obstacles.
The court, however, was not satisfied with the submission and said there is no need to say all these things about these companies as they are "prima facie tax evaders".
"How are they big? What kind of mindset do you have? Prima facie they all are tax evaders. Do not call them big. Do not insult the word," the bench said.
The department also informed that all telecom companies, which after the allotment of the spectrum, have sold their controlling stakes to foreign firms through the Mauritius route, have been asked to pay tax on the capital gain from such transactions.
Mr Tankha submitted that the department has already served notices to these firms and are treating them as assessees.
"The Director General of International Transactions has already issued notices to them. Some of them have already admitted that they should be taxed in India and we have issued them notices. They have permanent offices in India and they are assessees now," said Mr Tankha.
The bench asked the I-T department to complete the departmental proceedings against the tax-evading firms within the permitted time.
The bench also asked the Central Bureau of Investigation (CBI), Enforcement Directorate (ED) and I-T department to cooperate with each other during the probe.
The department said that it was following the Vodafone case, where the UK-based telecom giant bought controlling 67% stake in the Hutchison Essar using the DTAA (Double Taxation Avoidance Agreement) route in Mauritius and claimed exemption. However, the apex court asked it to make part payment of Rs2,500 crore.