Nifty, Sensex to remain under pressure – Thursday closing report

Chance of a rally in Nifty only if it closes above 8340


After a slight rebound on Wednesday, a strong sell-off today took the indices to its lowest since 31 October 2014. Against our anticipation of the market moving sideways, the benchmarks resumed their declines.

S&P BSE Sensex opened lower at 27,796 while CNX Nifty opened at 8,339. The indices fell further to hit a low at 27,539 and 8,272. The indices hit a high at 27,796 and 8,348. The indices almost manged to reach yesterday’s close in the afternoon but were again pulled lower in the final session and closed slightly above the day’s low. Sensex closed at 27,602 (down 229 points or 0.82%), while the Nifty closed at 8,293 (down 63 points or 0.75%). NSE recorded 79.29 crore shares. India VIX rose 4.33% to close at 12.7725.

Minister of State, independent charge, Petroleum & Natural Gas, Dharmendra Pradhan informed the Rajya Sabha in a written reply on Wednesday that Petroleum & Natural Gas Regulatory Board (PNGRB) has envisaged a phased roll out plan for development of city/local natural gas distribution network in the country, which includes 8 districts of Bihar.

The Union Cabinet chaired by the Prime Minister, Narendra Modi, on Wednesday, gave its approval for allowing public sector banks to raise capital to meet their additional capital requirements under BASEL-III by diluting Government holding upto 52% in a phased manner.

The Cabinet Committee on Economic Affairs approved a mechanism for procurement of ethanol by PSU OMCs to carry out the ethanol blended petrol program. The CCEA approved replacing the current procedure on ethanol viz. delivered price of ethanol may be fixed in the range of Rs 48.50 per litre to Rs 49.50 per litre, depending upon the distance of the sugar mill from the depot/installation of the OMCs.

Finance companies like SREI Infrastructure Finance (16.92%), Gruh Finance (5.92%) and Bajaj Finance (3.65%) were among the top nine gainers in ‘A’ group on the BSE.

Havells India (9.22%) continued to be the top loser in ‘A’ group on the BSE. The company's management cut the company's standalone revenue forecast to 12%-14% from earlier 17%-20% for the year ending 31 March 2015, citing weak domestic demand.

Coal India (1.00%) was the top gainer in the Sensex-30 pack. Consultancy firm Deloitte which was selected to institute a study on restructuring options for Coal India is yet to submit its final report, Parliament was informed today.

ONGC (3.21%) was the top loser among Sensex-30 stocks thanks to a continues decline in crude prices. The stock was in the news since it won an offshore oil and gas exploration block in New Zealand. BSE sought a clarification for the same from the company for which a reply is still awaited.

On Wednesday US indices closed in the red. Asian indices closed mostly in the red. Seoul Composite (1.49%) was the top loser.

Japan's core machinery orders, a leading indicator of capital spending, snapped a four-month rising streak in October, according to data released yesterday. Core machinery orders fell 6.4% month on month and on a year-on-year basis, machinery orders fell 4.9% in October.

China's central bank has stepped up its efforts to pump more cash into its banking system with a $65 billion fund injection.

European indices were trading in the red. US Futures too trading flat.

The latest data showed that consumer price inflation in Germany remained unchanged last month. In a report, Federal Statistical Office, Germany said that German CPI remained unchanged at a seasonally adjusted 0% in November, from 0% in October.


Tax tribunal rules against Vodafone

The income-tax (I-T) department has jurisdiction in the Rs8,500 crore transfer-pricing tax dispute involving the sale of its call centre business to Hutchison in 2007


The Income Tax Appellate Tribunal (ITAT) has ruled that that the income-tax (I-T) department has jurisdiction in the Rs8,500 crore transfer-pricing tax dispute involving the sale of its call centre business to Hutchison in 2007.


''Assessee's (Vodafone India) appeal is partly allowed. But according to us, this is an international transaction and the assignment of call option took place,'' the 2 judge ITAT bench said.


ITAT was hearing a plea of Vodafone India Services, made in 2012, challenging the jurisdiction of the tax department in issuing a draft transfer-pricing order that sought to add Rs 8,500 crore to Vodafone's taxable income for FY08.


The order came after the Bombay High Court had refused to intervene in the matter earlier and asked the Tribunal to hear the case on a day-to-day basis. The matter will now go back to the HC as Vodafone can appeal against the ITAT order. The I-T department had asked Vodafone to cough up Rs3,700 crore as tax last year for sale of its call centre business to Hong Kong-based Hutchison in 2007. However, in that case the Bombay HC had ruled in Vodafone's favour and dismissed the IT department's claim.


This case is separate from the other major tax battle Vodafone has been fighting, which involved a tax liability of another Rs3,200 crore. But this claim was earlier dismissed by the Bombay HC.


Russia to construct 12 nuclear reactors for India

Russian President Vladimir Putin had been pushing for Rosatom to increase the number of reactors it could supply to as many as 25


Russia's state-owned Rosatom said it would supply 12 nuclear energy reactors for India over 20 years, under an agreement aimed at boosting nuclear energy cooperation signed by the two countries during a summit in New Delhi.


A 1,000-megawatt reactor is operating at the Russian-built Kudankulam power station in Tamil Nadu, with a second due to come onstream in 2015. Russian President Vladimir Putin had been pushing for Rosatom to increase the number of reactors it could supply to as many as 25. A total of six reactors will be built at Kudankulam, according to Indian officials. A further six reactors are to follow at a site that has not yet been determined.


All eyes are on the Annual Russia-India Summit and its aftermath. There has been a shift in India's stance vis-a-vis Russia and its traditional western rivals. A controversy was also averted as a Crimean leader was also in New Delhi today as he appealed to Putin to end the conflict over Crimea and Ukraine.


Russia has traditionally been India's closest defence partner and ally. Russia has been seeking closer ties with China and signed a landmark gas supply agreement this year.


India is looking for greater access to the Russian petrochemical resources, and as expected has not been a party to the West's sanctions against Russia since the Ukraine crisis.


"This is President Putin's 11th annual summit and my first. I am confident that our bilateral cooperation will acquire new vigour," PM Modi said, and President Putin also chimed in with a positive note regarding the talks.


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