ML sectoral trends

Shares of office equipment companies, trading companies and oil & gas companies declined 15% each. Shares of pharmaceuticals companies and garment companies fell 5%. Stocks of glass companies and consumer products companies fell 2% and 4%, respectively. 

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Government accepts Shah panel report on MAT inapplicability

The Income Tax department had sent notices to 68 FIIs demanding Rs602.83 crore as MAT dues of previous years, and these FIIs, in turn, moved court challenging the demand

 

The government on Tuesday accepted the recommendations of the Justice A.P.Shah committee on the applicability of the vexed minimum alternate tax (MAT) on foreign instituitional investors (FIIs), and said it has decided to effect an appropriate amendment to the Income Tax Act.
 
"Through the amendment the government proposes to clarify that MAT provisions will not be applicable to FIIs/FPIs (foreign portfolio investors) not having a place of business/ permanent establishment in India, for the period prior to April 1, 2015," the finance ministry said in a statement here.
 
"The committee has recommended that section 115JB of the Income Tax Act may be amended to clarify the inapplicability of MAT provisions to FIIs/FPIs," it added.
 
"This will send a positive signal to the investors abroad. It only shows that the government is concerned about the issue of inconsistency and uncertainty in taxation," committee chairman Shah told reporters here.
 
Addressing a press conference earlier, Finance Minister Arun Jaitley said: "Today (Tuesday) I have accepted on the recommendation of CBDT and department of revenue, the report of Justice A.P. Shah dated August 25."
 
A senior official here told IANS that "the income tax department will soon issue instructions to assessing officers on how to deal with cases relating to applicability of MAT for periods prior to April 1, 2015, to the effect that they will not pursue the tax notices already sent".
 
"The legislative changes will happen in Finance Act next year," he said.
 
The Income Tax department had sent notices to 68 FIIs demanding Rs.602.83 crore as MAT dues of previous years, and these FIIs, in turn, moved court challenging the demand.
 
The CBDT had earlier said it will not raise any new demands for payments, and will take no coercive action to pursue claims that have already been filed under MAT.
 
"If order (on levying of MAT on FIIs) is in appeal, then we can certainly tell our assessing officer (that) please don't take it further; don't agitate it further and this is exactly what we did in Shell and Vodafone tax cases," CBDT chairperson Anita Kapur told reporters.
 
"Shell and Vodafone cases went against us and once we accepted that judgment, we told our officers, please don't do future assessments and please don't further agitate these in appeals," she said.
 
In the 2015-16 Budget, Jaitley had exempted FIIs from paying MAT with effect from April.
 
Even after Jaitley's announcement, the Income Tax department sent notice to at least 90 foreign portfolio investors.
 
With the uncertainty created by MAT, foreign investors sold Indian shares and bonds of around $630 million on May 6, marking the biggest single-day sale since January 2014.
 

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Nifty, Sensex will record further losses - Tuesday closing report
But Nifty is falling on lower and lower volumes
 
We had mentioned in Monday’s closing report that Nifty, Sensex look weak again and that as long as Nifty closes below 7,980, the trend is down. Most of the indices in the Indian stock market suffered a decline of more than 2% down on Tuesday. Almost all the sectors were trading in the red. Heavy selling pressure was seen in metal, banking, realty and consumer durables sectors. 
 
 
The slide in Asian markets and below-expected macro data sobered investor sentiments in the Indian equities markets on Tuesday, leading the Sensex to close 2.23% down.
 
The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) tanked by 586.65 points or 2.23%. Bearish sentiments were also witnessed at the wider 50-scrip Nifty of the National Stock Exchange (NSE). It ended the day's trade at 185.45 points or 2.33 percent down at 7,785.85 points. 
 
Analysts cited negative cues emanating out of Asian markets, especially the continuous slide in the Chinese exchanges to be the catalyst for the sharp fall in the domestic bourse. 
 
Among the Asian markets, Japan's Nikkei plunged by 3.84%. Hong Kong's Hang Seng plummeted by 2.24%. China's Shanghai Composite Index dropped by 1.28%.
 
The massive implosion in the Chinese markets which has by some estimates eroded 40%-45% of the entire stock value coupled with yuan devaluation and lower factory output has spooked the world markets. 
 
Other factors which subdued the markets were below-expected first quarter (Q1) gross domestic product (GDP), eight core industries (ECI) and purchasing manager’s index (PMI) figures. All these macro data points were below market's estimates.
 
The Q1 GDP came in at 7%, showing signs of slowing vis-a-vis the 7.5% expansion in the quarter before. But the growth was much higher than 6.7% registered in the first quarter of the last fiscal.
 
The ECI for select factory output slowed to 1.1% growth in July from an increase of 3% in the previous month, mainly due to a fall in steel production and marginal growth in coal. The select factory output index rose by 4.1% in July 2014.
 
The Nikkei India Manufacturing PMI (Purchasing Manufacturer’s Index) for the last month stood at 52.3. This is marginally down from July's 52.7. An index reading of above 50 indicates an overall increase in the manufacturing sector, below 50 an overall decrease.
 
Sector-wise, all 12 sub-indices of the BSE ended the day's trade in the red. The S&P BSE banking, automobile, capital goods, consumer durables and healthcare indices came under intense selling pressure.
 
The S&P BSE banking index plunged by 713.55 points, the automobile index receded by 472.84 points, the capital goods index contracted by 442.05 points, the consumer durables index declined by 272.67 points and healthcare index decreased by 263.78 points.
 
Major Sensex gainers during Tuesday's trade were: Sun Pharma, up 0.34% at Rs.900.75.
 
The major Sensex losers were: Axis Bank, down 5.24% at Rs.480.15; Hindalco Industries, down 5.18% at Rs.75.90; Tata Steel, down 3.93% at Rs.216.20; BHEL, down 3.91% at Rs.217.65; and Vedanta, down 3.80% at Rs.94.85.
 
The top gainers and top losers in the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given below:
 
 
Among European indices, the DAX was at 9,964.45, down 2.88%, and the FTSE 100 was at 9,964.45 2, down 3.08%

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