Finance Minister Pranab Mukherjee breathed life into battered India stock indices with the announcement that the controversial General Anti-Avoidance Rule will be postponed to the next financial year.
FIIs recently turned averse to Indian markets as uncertainties loomed larger over the GAAR issue and the inclusion of Participatory Notes, or P-Notes, under GAAR.
Many purchasers of P-notes are believed to be overseas funds registered in countries safe from Indian taxes, such as Mauritius. India has a double tax avoidance treaty with Mauritius.
Even though the FM did clear the air over the issue recently, attempts to allay fears over the anti avoidance proposal were of little help. He then today announced that GAAR itself would be postponed to FY14.
Indian markets had a gap-down opening tracking global trends and saw the Nifty break 5000 on the downside. They finally recovered smartly to end well in green territory.
While China ended flat on Monday, other Asian indices in Hing Kong, Japan and Korea settled lower on weak global cues. European markets were trading down on worries that outcome of weekend elections in France and Greece will put the EU fiscal compact in jeopardy.
BSE Sensex: 16,912 up 0.5%
NSE Nifty: 5,114 up 0.5%
The India VIX measuring volatility too witnessed a massive swing, touching a day’s high of 23.23 and finally ending down 4.3% at 20.22.
The BSE Small Cap and BSE Mid Cap index too recovered smartly up 0.3% and 0.5% respectively.
Among the sectoral indices, Capital Goods was the biggest gainer, up 3.9%. It was followed by Power, Metals, Consumer Durables, Auto, Bankex, Realty and PSU. FMCG led the pack of laggards and closed down 0.7%. Oil&Gas, IT and HC were other notable losing indices while Teck ended flat.
BHEL, BPCL, L&T, DLF, Jindal Steel, Grasim, RInfra, Maruti Suzuki, IDFC, Siemens, Tata Motors, Tata Steel, ICICI Bank, SBI and Tata Power were among the notable leaders on the Sensex and the Nifty.
Cairn India, JP Associates, HCL Tech, Dr.Reddy’s, RIL, HUL and Hero MotoCorp were the notable losers on both the indexes.
TTK Prestige tanked 13.7% to end at Rs.3,026.90 after the company’s 4Q profit came in at Rs.197.4m lagging estimates of Rs.227mn
ITD Cementation climbed 1.2% to Rs.177 after the company’s 1Q profit rose almost 3 times to Rs.119.5mn rupees from Rs.39.3mn in the same period a year ago.
Orient Refractories closed at a new high of Rs.34.20, up 3.8% on reports that Germany’s RHI a leading refractory manufacturer may acquire the company for Rs.6bn.
Sobha Developers gained 0.8% to Rs.325 after the company’s 4Q profit more than doubled to Rs.890mn versus Rs.402mn in the year ago period.
Allahabad Bank slumped 4.4% to finish at Rs.162.45 after its 4Q net income came in below estimates of Rs. 5.1bn at Rs.4b.
After falling to Rs.569.65 Godrej Properties recovered to close at Rs.594.60 up 0.8%. The stock fell after the company’s 4Q net income declined 34% on year to Rs.398mn.
After declining earlier on it 4Q results, Grasim Industries finally recovered to settle at Rs.2,520 up 4%. Grasim had earlier declined to Rs.2,321.40 after 4Q profit slipped 8% on year to Rs.8.09bn.
Jaiprakash Associates closed down 2.3% at Rs.69.40 on reports that the company said it was studying the implications of the Himachal Pradesh High Court’s ruling of the Rs.1b fine imposed on the company for violation of environmental laws.
Motherson Sumi finished down 0.35% at Rs.169.25 after the company announced that its Chairman Mohinder Gujral passed away on May 4. Also, Samvardhana Motherson Finance withdrew its Rs.16.7bn IPO after it failed to draw enough bids from investors. Samvardhana owns 36.5% stake in Motherson Sumi.
Reliance Industries declined 1.5% and ended at Rs.715.30 as it said the production cost recovery dispute with the government would be settled by arbitration. Reports said that the oil ministry had refused to join arbitration but said there was a dispute over how much of cost could be recovered because of the fall in gas production. Morover, the government has not appointed an arbitrator on the matter since RIL’s arbitration notice on Nov 2011. The company has now filed a petition in the Supreme Court under Sec 11 of the Arbitration Act for the appointment of an arbitrator on behalf of the government by the court.
Syndicate Bank recovered from early losses and closed up 1.6% at Rs.98.85. Shares had fallen earlier after the bank registered 4Q net income at Rs.3.09bn versus estimates of Rs.3.44bn.
After declining earlier on Q4 results that missed estimates, UCO Bank finished higher at Rs.73.30, up 1.3%. The bank’s 4Q profit stood at Rs.2.52bn trailing estimates of Rs.3.42bn.
Bosch climbed 3.5% to Rs 8,873 after the company’s net profit climbed 22.38% to Rs 3.35bn.
NIIT Technologies advanced 3.4% to Rs. 259.95 after the company said on May 4 that a 44% increase in orders executable over the next 12 months would translate to another year of robust growth.
Ramky Infrastructure gained 2.85% to close at Rs 196.55 after the company announced that it had won new orders aggregating Rs.12.48bn from different states.