The Indian equity markets came off the day's low but choppiness continued in the market, which is still trading in the red on weak inflation numbers in the late morning session. The BSE benchmark Sensex slipped more than 100 points and the Nifty fell way below the 4,900 level. Markets were still expecting some volatility ahead of the derivatives expiry today. Meanwhile, primary articles inflation for week ended August 13 rose to 12.4% versus 11.64% (WoW), food articles inflation was at 9.8% versus 9.03% (WoW) while fuel group inflation remains unchanged at 13.13% (WoW). On sectoral front Technology, metal, consumer durable, capital goods, banking, power and (ADAG) stocks were witnessing selling pressure. While select auto, FMCG and healthcare stocks were providing marginal support to the markets. On the global front, Asian markets were trading in mixed. Asian markets recovered sharply on Thursday morning after United States manufacturing data provided some optimism to investors that the US economy was not falling off the cliff. The US Commerce Department reported that manufactured goods surged 4% in July from the revised 1.3% fall in the previous month. Global markets are waiting to hear what Federal Reserve chairman Ben Bernanke has to say on Friday. Back home, the market breadth turned in favor of declines; there were 804 shares on the gaining side against 1,485 shares on the losing side while 108 shares remained unchanged.
The BSE Sensex is currently trading at 16,161.96 down by 123.02 points or 0.76%. The index has touched a high and low of 16,373.84 and 16,137.55 respectively. There were 9 stocks advancing against 21 declines on the index.
The broader indices are witnessing deeper cut and BSE Mid cap index was down by 1.03%, while Small cap index was down by 0.67%.
The top gaining sectoral indices on the BSE were, Auto up by 0.28%, FMCG up by 0.14% and HC up by 0.07%. While, IT down by 1.97%, Metal down by 1.86%, CD down by 1.85%, TECk down by 1.69% and CG down by 1.47% were the top losers on the index.
The top gainers on the Sensex were ONGC up by 2.46%, Sun Pharma up by 2.06%, Tata Motors up by 1.86%, Tata Power up by 1.22% and Bajaj Auto up by 0.92%.
On the flip side, Jindal Steel down by 2.90%, JP associates down 2.73%, Tata Steel down by 2.56%, TCS down by 2.16% and HDFC down by 2.00% were the top losers on the Sensex.
Meanwhile, India has entered into an agreement for Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital (DTAA) with Government of Georgia. The DTAA that was signed by M. C. Joshi, Chairman, Central Board of Direct Taxes (CBDT) on behalf of the Government of India and Zurab Katchkatchishvili, Ambassador of Georgia to India on behalf of the Government of Georgia, will help both the nations by preventing tax evasion and facilitating better exchange banking information.
According to the statement released by the finance ministry, the agreement provides that business profits will be taxable in the source state if the activities of an enterprise constitute a Permanent Establishment (PE) in the source state. The DTAA also provides for fixed place PE, building site, construction and installation PE, service PE, insurance PE and agency PE.
The agreement incorporates Para 2 in Article concerning Associated Enterprises which would enhance recourse to Mutual Agreement Procedure to relieve double taxation in cases involving transfer pricing adjustments. However, dividends, interest and royalties and fees for technical services income will be taxed both in the country of residence and in the country of source. The low level of withholding rates of taxation for dividend (10%), interest (10%) and royalties and fees for technical services (10%) will promote greater investments, flow of technology and technical services between the two countries.
The DTAA incorporates provisions for effective exchange of information between tax authorities of the two countries in line with best international standards, including exchange of banking information and supplying of information without recourse to domestic interest. The agreement also provides for sharing of information to other agencies with the consent of supplying state.
The agreement has an article on assistance in collection of taxes, including provision for taking measures of conservancy. The agreement incorporates anti-abuse (limitation of benefits) provisions to ensure that the benefits of the agreement are availed of by the genuine residents of the two countries. The agreement will provide tax stability to the residents of India and Georgia and will facilitate mutual economic cooperation between the two countries. It will also stimulate the flow of investment, technology and services between India and Georgia.
The S&P CNX Nifty is currently trading at 4,846.40, lower by 42.50 points or 0.87%. The index has touched a high and low of 4,915.85 and 4,838.95 respectively. There were 13 stocks advancing against 36 declines on the index and one remained unchanged.
The top gainers of the Nifty were ONGC up by 2.55%, Tata Motors up by 1.92%, Sun Pharma up by 1.82%, Tata Power up by 0.99% and DLF up by 0.96%.
On the flip side, HCL Technology down by 4.09%, Jindal Steel down by 3.22%, JP Associates down by 3.05%, Axis Bank down by 2.51% and Tata Steel down by 2.46% were the major losers on the index.
The Asian markets are trading mixed; Shanghai Composite was up 2.23%, Hang Seng was up by 0.88%, and Jakarta Composite was up by 0.22%, Nikkei 225 was up by 1.49%, Straits Times was up by 0.77% and Seoul Composite was up by 0.88%.
On the other hand Taiwan Weighted was down by 1.23%.and KLSE Composite was marginally down by 0.03 points.
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