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Markets falter on Mauritius tax woes, weak European cues

By Surabhi Roy
Last updated on: May 11, 2016 17:24 IST
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Benchmark indices snapped two-day winning streak and ended lower amid a volatile session after participants turned jittery over foreign fund inflows after the country decided to impose capital gains tax arising in Mauritius from sale of shares in Indian companies starting from April 1, 2017.

The S&P BSE Sensex ended down 156 points at 25,597 and the Nifty50 slipped 39 points to end at 7,849.

Broader markets outperformed the benchmark indices- BSE Midcap index inched up 0.2% while Smallcap index ended marginally down.

"India is better placed when compared to the other emerging pack in terms of our internal/domestic consumption story/managable Fiscal and current deficits, strong external reserves, resilient currency.

"So government reforms and policies and our own demographic dynamics help us standing out in the emerging pack. We expect nominal GDP growth rate of ~12%, corporate earnings should grow by 15-16% translating into reasonable growth for SENSEX earnings as well", says oil, says Mayuresh Joshi, Fund Manager, Angel Broking.

In overseas stock markets, energy producers led decline in European stocks as crude oil prices fell.

CAC, DAX and FTSE are down 0.2%-1%. Asian stocks witnessed a mixed trend. US stocks registered broad based gains yesterday as oil prices rallied.

Crude-oil prices fell in Asia trade Wednesday as investors weighed reports of a growing surplus from Saudi Arabia and supply disruptions in Canada and Africa.

Back home, the rupee trimmed its initial losses against the American currency, but was still trading lower by 4 paise to 66.71 per dollar on mild dollar demand from banks and importers despite lower greenback in the overseas market.

Meanwhile, investors brace up ahead of the key macro data- IIP and CPI numbers due to be unveiled tomorrow.

Among key stocks, telecom companies such as Bharti Airtel, Idea Cellular and Reliance Communications ended in negative zone after the Supreme Court on Wednesday struck down compensation policy for call drops levied by the Telecom Regulatory Authority of India.

Bharti Airtel, RCom, Tata Comm and Idea Cellular slipped between 1%-3%.

Dr Reddy’s Labs ended over 2% lower ahead of its fourth quarter and FY16 results due on Thursday.

Asian Paints ended 2% higher post the announcement of fourth quarter earnings which was in line with the street expectations. The company posted consolidated net profit of Rs 424 cr as against 352 cr.

Stock markets graphMaruti Suzuki has grabbed pole position in three of the four new segments it entered after sustained efforts of raising production and continued marketing push. The stock gained over 1%.

NTPC was up 0.3% after the company said that consequent upon testing and commissioning, 200 MW capacity (4X50 MW) of NP Kunta Ultra Mega Solar Power Project Stage-I at Anantapuram is declared on commercial operation w.e.f. May 09, 2016.

Axis Bank was the top Sensex gainer, up almost 2%. L&T, Tata Steel, M&M and HUL were up over 0.3%.

Among other shares, Parrys Sugar Industries was locked in lower circuit of 5% at Rs 55.55 on the BSE after the board of directors of the company approved the scheme of amalgamation of Parrys Sugar Industries with EID Parry.

Parrys Sugar is a listed subsidiary of EID Parry.

Grasim Industries, Biocon, Yes Bank and Zee Entertainment Enterprises touched their respective 52-week highs on the BSE in an otherwise weak market, extending their gains after reporting good earnings for the quarter ended March 31, 2016.

Future Retail was locked in lower circuit of 5% at Rs 19 on the BSE after the stock was traded ex-demerger of its retail business undertaking. On Tuesday, the stock had closed at Rs 151 on the BSE.

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Surabhi Roy in Mumbai
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