Pre Session- Bearish opening likely for Sensex amid govt move to tax Mauritius investments
11/05/2016
The key Indian equity benchmarks are poised to witness a negative opening on Wednesday as the government late Tuesday announced that starting next year, a capital gains tax on investments coming from Mauritius will be imposed as it seeks to curb black money. The decision marks an amendment to the treaty signed by India and Mauritius in 1983 that led to the latter becoming the biggest source of foreign investments in India but was also suspected to have given risen to tax evasion with rich Indians using Mauritius investments as a means to avert Indian taxes. Investments made from April,1, 2017, will be taxed at 50 per cent of the domestic rate which is currently 15 to 20 per cent, depending on the instrument and length of investment - until March 31, 2019, for companies already established in Mauritius, while the full rate will apply for all companies after that. The new terms may make foreign investors jittery. Losses in the CNX Nifty Index Futures for May delivery which fell by 1.66 per cent or 129 points at 7,790.5 at 10:41 AM Singapore time also signal that Dalal Street may open lower today. Focus will be on Kotak Mahindra Bank, Havells India, Apollo Tyres and Asian Paints as they unveil their March quarter earnings today. Caution ahead of key macro data to be released on Thursday including March industrial output and April consumer inflation which are likely to offer further cues over the health of Asia’s third biggest economy, may also weigh on sentiment. Analysts expect retail inflation to have crept up to 5 per cent in April 2016 from 4.83 per cent in March 2016, while industrial output growth probably accelerated to 2.5 per cent in March 2016, year on year, from 2 per cent in February 2016. Marking a second straight closing in the green, the 30-share Sensex on Tuesday rallied by 83.67 points or by 0.33 per cent to end at 25,772.53 in choppy trade as indirect tax data and rising foodgrain production lifted sentiment.
Asian stocks were trading mixed amidst a rally in commodity prices and a surge in US stocks overnight after a rise in US job openings to the second highest level on record in March signaled a strengthening labour market recovery in the world’s biggest economy. China’s Shanghai Composite logged slim gains but Hang Seng fell and Japan’s Nikkei 225 rallied but a stronger yen curbed gains. The Dow Jones Industrial Average, the Nasdaq Composite and the S&P 500, all advanced more than 1 per cent on Tuesday after data showed that US job openings increased by 149,000 to 5.76 million in March 2016
11/05/2016
The key Indian equity benchmarks are poised to witness a negative opening on Wednesday as the government late Tuesday announced that starting next year, a capital gains tax on investments coming from Mauritius will be imposed as it seeks to curb black money. The decision marks an amendment to the treaty signed by India and Mauritius in 1983 that led to the latter becoming the biggest source of foreign investments in India but was also suspected to have given risen to tax evasion with rich Indians using Mauritius investments as a means to avert Indian taxes. Investments made from April,1, 2017, will be taxed at 50 per cent of the domestic rate which is currently 15 to 20 per cent, depending on the instrument and length of investment - until March 31, 2019, for companies already established in Mauritius, while the full rate will apply for all companies after that. The new terms may make foreign investors jittery. Losses in the CNX Nifty Index Futures for May delivery which fell by 1.66 per cent or 129 points at 7,790.5 at 10:41 AM Singapore time also signal that Dalal Street may open lower today. Focus will be on Kotak Mahindra Bank, Havells India, Apollo Tyres and Asian Paints as they unveil their March quarter earnings today. Caution ahead of key macro data to be released on Thursday including March industrial output and April consumer inflation which are likely to offer further cues over the health of Asia’s third biggest economy, may also weigh on sentiment. Analysts expect retail inflation to have crept up to 5 per cent in April 2016 from 4.83 per cent in March 2016, while industrial output growth probably accelerated to 2.5 per cent in March 2016, year on year, from 2 per cent in February 2016. Marking a second straight closing in the green, the 30-share Sensex on Tuesday rallied by 83.67 points or by 0.33 per cent to end at 25,772.53 in choppy trade as indirect tax data and rising foodgrain production lifted sentiment.
Asian stocks were trading mixed amidst a rally in commodity prices and a surge in US stocks overnight after a rise in US job openings to the second highest level on record in March signaled a strengthening labour market recovery in the world’s biggest economy. China’s Shanghai Composite logged slim gains but Hang Seng fell and Japan’s Nikkei 225 rallied but a stronger yen curbed gains. The Dow Jones Industrial Average, the Nasdaq Composite and the S&P 500, all advanced more than 1 per cent on Tuesday after data showed that US job openings increased by 149,000 to 5.76 million in March 2016
