Sensex breathes 205 points sigh on GAAR clarity; rupee spikes

The BSE Sensex showed smart recovery on Tuesday after CNBC-TV18, citing unnamed finance ministry officials, reported the government would not target the participatory notes under its newly proposed General Anti-Avoidance Rule (GAAR).

Overall the day was quite choppy ahead of F&O expiry on Thursday. The 30-share BSE Sensex rose 204.58 points or 1.20%, to close at 17,257.36 after hitting an intraday high of 17,366.84 and low of 17,061.16.

Finance ministry sources say, only participatory notes which fail certain regulatory tests may be subject to taxation. There will not be a double taxation, the report said.

Aliff Fazelbhoy, partner - tax, M&A and employment, ALMT Legal, said that it was not the government's intention to tax P-notes but advised caution until it was spelt out.

Meanwhile, the NSE's 50-share Nifty rallied 58.90 points or 1.14% to 5,243.15, helped by the rising rupee, short covering post yesterday's sharp fall and the global cues.

Jason Hughes of IG Markets tells CNBC-TV18 that Indian equities look attractive around the 5200 level on the Nifty.

The Indian rupee appreciated by 58 paise to 50.69 a dollar today after falling in previous sessions, which suggests that foreign institutional investors may have stepped in to buy their favourite stocks. The 8.79% 2017 bond yield spiked further by 0.5% to 8.52 ahead of announcement of government's borrowing programme this week.

Cigarette major ITC rose 1.8% and FMCG company Hindustan Unilever shot up 3.5%.

Country's largest lenders State Bank of India and ICICI Bank were up 0.7-1% while rival HDFC Bank was up 1.5%. Housing finance company HDFC moved up 2.2%.

Shares of Sterlite Industries, Cipla and DLF topped the buying list, rising 3.5-4.5%.

Engineering and construction major Larsen & Toubro, telecom company Bharti Airtel and top commercial vehicle maker Tata Motors rallied 2-3%.

Index heavyweights Infosys and ONGC were up 1-1.8%. Tata Consultancy Services, India's No. 1 software services exporter rose 0.9%.

However, shares of Maruti Suzuki, country's largest car maker fell 2% after Maharashtra government imposed 4% tax on diesel cars and 2% on petrol cars. State-run BHEL was down 1%.

Declining shares outnumbered advancing by 841 to 593 on the National Stock Exchange. Total traded volume was more than Rs 2.42 lakh crore.

Global markets gained after comments over US economy by Fed chairman Ben Bernanke yesterday. Asian markets closed 0.8-2.4% higher barring Shanghai while European markets were moderately higher.

At 14:55 hours IST: Sensex off day's high again; Nifty holds 5200

The BSE Sensex came off day's high again, which was rallied more than 300 points on short covering post clarification on General Anti-Avoidance Rules (GAAR) by Finance Ministry sources. However, the NSE Nifty managed to hold the 5200 level quite nicely amid volatility ahead of expiry on Thursday.

CNBC-TV18 reported quoting finance ministry sources that finance ministry will not be chasing after these P-notes, or derivative products that allow foreign investors to invest anonymously into Indian equities, as part of its recently proposed General Anti-Avoidance Rule (GAAR). Only participatory notes which fail certain regulatory tests may be subject to taxation, the reports said.

The BSE benchmark rose 119 points to 17,171.44 and the NSE benchmark was up 33 points at 5,217.05.

Global markets too were higher in trade post comments by Federal Reserve chairman Ben Bernanke. European markets moved up 0.5-1% and even the Dow Jones futures gained 33 points.

Back home, shares of HDFC, ITC, Infosys, Larsen & Toubro, HDFC Bank, Tata Motors and ONGC climbed 1-2%. HUL, Bharti Airtel, Cipla, DLF and Sterlite Industries rallied 2.5-3.7%.

However, Maruti Suzuki, Coal India, BHEL, Tata Power and NTPC fell 1-2%. Index heavyweights Reliance Industries and ICICI Bank declined 0.2% each.

8.79% 2017 bond yield spiked 0.5% to 8.52 ahead of announcement of government's borrowing programme this week. The Indian rupee appreciated by 58 paise to 50.69 a dollar.

The market breadth stayed in favour of declines; about 575 shares advanced while 850 shares slipped.

Stocks In News

Adani Power gained 3.5% and Reliance Power rose 2% after the news that group of ministers will consider nod for 8 coal blocks. CNBC-TV18 reported quoting government sources that clearance is likely to 7 coal blocks out of 8 and coal blocks are linked to power plants of major companies like Reliance Power, Essar Power, Hindalco, Adani Power etc.

At 13:53 hours IST: Sensex up over 1%, rupee regains 50.78/USD

The BSE Sensex recovered all its yesterday's losses in afternoon trade, supported by banks, capital goods, FMCG and technology stocks. The Indian rupee too gained quite sharply, rising by 49 paise to 50.78 a dollar that suggests inflow of foreign money.

The BSE benchmark shot up 219 points or 1.28% to 17,271, helped by 26 components. Meanwhile, the NSE benchmark climbed 65 points to 5,249.

CNBC-TV18 reported quoting Finance Ministry sources that General Anti-Avoidance Rules (GAAR) will be invoked if set up for invoking tax benefit. It will not target P-notes, say sources. The Sensex gained as much as 314 points post this news.

The Realty, FMCG, TECk, Bank, Metal, IT, Capital Goods, Oil & Gas, Healthcare and Auto indices were up 1-2%.

Shares of Infosys, HDFC, L&T, HUL, Bharti Airtel and Tata Motors gained 2-3% on short covering.

ITC, HDFC Bank, ICICI Bank, ONGC, Tata Steel and Wipro were up 1-1.5%.

Reliance Industries, State Bank of India and Tata Consultancy Services rose over 0.5%.

However, shares of BHEL, Maruti Suzuki and Coal India fell 1% each.

About 1200 shares advanced while 1531 shares declined on the BSE.

At 13:08 hours IST: Nifty hovers around 5200; HDFC, Bharti, HUL rally

The NSE Nifty was consistently struggling to hold the 5200 level, though it was higher with moderate gains. Shares of HDFC, Infosys, Bharti Airtel and L&T were helping the market stay higher while the fall in ICICI Bank, BHEL, Reliance Industries, TCS and ONGC capped the upside.

The BSE benchmark was up 43 points at 17,095.66 and the NSE benchmark gained 13 points at 5,197.10.

Housing finance company HDFC rose nearly 2% while its group company HDFC Bank advanced just 0.7%.

Cigarette major ITC moved up 0.5% whereas defensive stock - HUL jumped 2.7%.

Shares of Infosys, country's second largest IT services exporter gained 0.9% and telecom company Bharti Airtel went up 2.4%.

Engineering and construction company Larsen & Toubro rose 0.8% while state run BHEL lost 1.8%.

Index heavyweights ICICI Bank, Reliance Industries, TCS and ONGC were down 0.4-0.8%.

The market breadth was in favour of declines; about 1037 shares advanced while 1615 shares slipped on the BSE.

At 12:17 hours IST: Choppy Sensex trades higher; BHEL, Maruti top sell list

The BSE Sensex stayed higher amid choppy trade in the afternoon trade, though it shed more than half of gains from day's high. The Indian rupee gained quite sharply after falling in previous sessions, shooting up by 42 paise to 50.85 a dollar today.

The 30-share BSE benchmark was down 64 points to 17,116.34 and NSE's 50-share benchmark gained 18 points at 5,202.

Shares of Infosys, HDFC, HUL, Bharti Airtel, Larsen & Toubro, ITC and HDFC Bank were supporting the market, rising 1-2.5%.

However, index heavyweights State Bank of India, TCS, Reliance Industries and ONGC were flat with a negative bias.

Country's largest private sector lender ICICI Bank fell nearly 1%. State-run BHEL and top car maker Maruti were biggest losers among largecaps, falling 2% each.

Shares of gold loan financing companies Muthoot Finance and Manappuram Finance crashed 11% and 7%, respectively after the Reserve Bank of India issued new fair practice guidelines for the MFI and gold loan NBFCs (Non-banking finance companies). According to new rules, these companies will have to ensure that adequate due diligence is carried out on customers.

Most active shares on exchanges were SBI, Coal India, ICICI Bank, Onelife Capital, Reliance Industries, Yes Bank and Cipla.

Stocks in news

Sadbhav Engineering gained 3% amid heavy volumes post the company won order from NHAI worth Rs 1,220 crore.

Jubilant Foodworks tumbled 3% post promoters sold 2 lakh shares in company on March 23.

Suzlon Energy rose 1% as it signed contract for 332 MW for German offshore project.

At 11:14 hours IST: Sensex rises over 100 pts; rupee touches 50.96/USD

The BSE Sensex turned strong after it priced in General Anti-Avoidance Rules (GAAR) fears, supported by banks and financials, technology, metals, FMCG and auto (barring Maruti). Even the Indian rupee recovered from two-month lows today, rising by 31 paise to 50.96 a dollar. Index heavyweights Reliance Industries and ICICI Bank too trimmed their losses.

The BSE benchmark climbed 140 points to 17,192.16 and the NSE benchmark was up 39 points at 5,223.05.

State Bank of India, country's largest lender rose 0.8% while its rival HDFC Bank was up 1.6%. Housing finance company HDFC gained 2.2%.

Infosys, India's No. 2 software services exporter jumped 1.7% whereas rivals TCS and Wipro moved up 0.4-0.6%.

Capital goods major Larsen & Toubro and telecom major Bharti Airtel were up nearly 1.5%.

However, Maruti Suzuki retained its top position in the selling list, falling over 2%. BHEL, Coal India and Tata Power were down 0.5-1%.

In the second line shares, Rajesh Exports, Vaarad Ventures, Shree Renuka, Sadbhav Engg and Century Textiles shot up 4-5% while Muthoot Finance, Manappuram Finance, Himadri Chemical, HT Media and Hotel Leela lost 3-10%.

Asian markets continued to trade higher after Federal Reserve chairman Ben Bernanke comments and positive European economic data. Nikkei shot up over 2% while Hang Seng, Straits Times and Kospi gained 0.6-1.6%.

At 10:07 hours IST: Sensex erases early gains on GAAR fears; RIL, SBI down

The BSE Sensex shaved off all its early gains due to lack of clarity over General Anti-Avoidance Rules (GAAR). Foreign institutional investors and investors investing via promissory notes are still worried over tax issues. Index heavyweights Reliance Industries, ONGC, SBI and ICICI Bank were under pressure.

The BSE benchmark was up 13 points at 17,066 and the NSE benchmark rose 2.5 points to 5,187.

Lack of clarity on the GAAR provisions has brought a lot of uncertainty in the minds foreign institutional investors (FIIs), said Hiren Ved, chief investment officer, Alchemy Capital Management. He sees a likelihood of FIIs shelling out 15% cap gains on short-term capital gains.

Given this confusion, he expects arbitrage funds to unwind their positions towards this expiry. "We could see some pressure on the market until clarity emerges on this, which my sense is will only happen in the early days of April," he told CNBC-TV18.

Shares of HDFC and HDFC Bank climbed 2% and 0.6%, respectively while country's largest private sector lender ICICI Bank dropped 2%, State Bank of India slipped 0.56%.

Oil & gas producers and index heavyweights Reliance Industries and ONGC were down around 0.5%.

State-run capital goods major Bharat Heavy Electricals fell 2% while engineering and construction company L&T was up just 0.2%.

Auto stocks too were down after Maharashtra government raised motor vehicle tax; Maruti Suzuki plunged 2.7% while Tata Motors, M&M and Bajaj Auto were down 0.5%.

FMCG major HUL gained 2.5%. Technology stocks like Wipro, TCS and Infosys moved up with marginal gains. Bharti Airtel, country's largest telecom player gained 1.65%.

Advancing shares outnumbered declining by 727 to 481 on the National Stock Exchange.

At 9:19 hours IST: Short covering lifts Sensex over 100 pts; ICICI Bank down

The BSE Sensex opened with 170 points gap up on Tuesday led by short covering, tracking positive global cues. However, the market immediately shed some gains due to fall in ICICI Bank and lack of clarity over GAAR issue. Global markets rallied post Federal Reserve chairman Ben Bernanke's comments.

The BSE benchmark rose 124 points to 17,176.56 and the NSE benchmark gained 38.5 points at 5,222.70.

Among frontliners, Sesa Goa, Sterlite Industries, Hindalco, DLF, IDFC, Cipla, Ranbaxy Labs, SBI, PNB, Axis Bank, Kotak Mahindra Bank, Reliance Power, Reliance Infrastructure, Bharti Airtel, L&T, NTPC, Hero MotoCorp and Bajaj Auto surged 1-3%.

Reliance Infrastructure rose 1.5% after the company said it says to mull raising Rs 365 crore via NCDs on Tuesday

However, ICICI Bank fell over 1% as sources said Kingfisher is likely to be a NPA for the bank in Q4.

The CNX Midcap climbed 85 points to 7,636. About five shares advanced for every share falling on the National Stock Exchange.

In the second line shares, Unitech, S Kumars Nationwide, Punj Lloyd, Lanco Infratech, Voltas, HDIL and Indiabulls Real were up 2.5-3.6%.

Shree Renuka Sugars shot up 3.6% after EGoM approved export of 1 million tonnes more sugar.

Paper space too was on buyer's radar. BILT and JK Paper surged 4% each.

Delta Corp rose 3%, even after annual license fee raised by Goa government in its Budget.

Manappuram Finance tanked 3.7% after notification by the RBI for gold loan financing companies.

Thomas Cook was down 8%.

Kingfisher Airlines declined 1% after sources reclaimed that ICICI Bank sent loan recall notice to the company.