BSE, Nifty Rise Nearly 1 Percent On MAT Rollback Hopes, Subdued Inflation Data

13/08/2015 4:16 PM IST | Updated 15/07/2016 8:25 AM IST
NEW! HIGHLIGHT AND SHARE
Highlight text to share via Facebook and Twitter
ASSOCIATED PRESS
A stock broker discusses trades with a colleague (unseen) at a brokerage in Mumbai, India, Wednesday, July 9, 2008. India's main Sensex stock index surged 4.6 percent Wednesday with brisk buying in heavyweight property and utility stocks. The Bombay Stock Exchange's benchmark 30-stock Sensex rose 614 points to close at 13,964.26. On the broader National Stock Exchange, the 50-company S&P Nifty index rose 4.24 percent to close at 5,378.51 points. The Press Trust of India news agency said investor sentiment was boosted by the withdrawal of support by communists parties for Prime Minister Manmohan Singh's government, which will now have a free hand in pursuing economic reforms. (AP Photo/Gautam Singh)

The BSE Sensex and Nifty rose nearly 1 percent on Thursday on reports that a government appointed committee suggested that there was no legal basis to retrospectively impose the controversial minimum alternate tax on foreign investors. Retail inflation that grew at its slowest pace since November also added to the positive sentiment.

Justice AP Shah-led committee report said there was no legal basis to impose minimum alternate tax on foreign institutional investors and foreign portfolio investors, Bloomberg TV reported, citing sources.

"This is a sentiment boost, the markets can breathe a sigh of relief," Deven Choksey, managing director of KR Choksey Securities said.

Both the Sensex and the Nifty were up 0.72 percent, on track to end a four-session losing streak. Encouraging inflation data contributed to the rise.

Consumer prices rose 3.78 percent from a year ago in July, compared with a forecast 4.4 percent gain. This is the slowest pace since November, and one reason was a favourable base effect. Reserve Bank governor Raghuram Rajan maintained borrowing rates in August to control inflation, resisting pressure from the government to cut rates that are among the highest in Asia.

“The RBI should have an out-of-policy rate cut,” said Shishir Bajpai, a director at IIFL Wealth Management Ltd. “Lower oil and commodity prices, and falling food inflation should prompt a rate cut.”

Gains were led by financial stocks such as Axis Bank up 2 percent and ICICI Bank up 0.9 percent and IT stocks such as Infosys, up 1.4 percent, and HCL Tech, up 1.7 percent.

Indian stocks were largely flat in the first half of the session on Thursday as a weak rupee weighed on sentiment. The currency touched an intraday low of 65.02 to the dollar earlier on Thursday, its lowest level since Sept. 9, 2013.

Investors were also disappointed after the government failed to pass a key reform on goods and services tax in the monsoon session of parliament that ended on Thursday.

Telecom stocks Bharti Airtel rose 1.6 percent after the government on Wednesday allowed telecom operators to share airwaves in the same band to reduce call drops. The move is expected to improve cost efficiencies for telecom companies.

Shares of Nestle India gained 5 percent after the Bombay High Court ruled in favour of its appeal challenging the food safety regulators' findings that the Swiss group's Maggi instant noodles contained excess levels of lead.

Like Us On Facebook |
Follow Us On Twitter |
Contact HuffPost India

More On This Topic