Sensex ends 206 pts higher as FIIs may be left out of GAAR net

3:30 pm Following reports that GAAR will not target foreign institutional investors, the Sensex ended 206 points up at 17,257.36, while the NSE Nifty gained 58 points to close at 5.243.15

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.

Meanwhile, Kingfisher released it summer schedule for this year and said it is temporarily suspending operations to several destinations as per its revised flight schedule, and most employees at those places have been asked to “stay at home.” The stock closed 1.5 percent lower at Rs 16.50.

All eyes would be on the H1 FY13 borrowing calendar today. The market is expecting it to be around Rs 3.7 lakh crore. Liquidity remains fairly tight. So, any indication from the RBI on OMOs could sooth the bond market.

Sensex gains 270 points as GAAR will not target foreign investors

2:00 pm: In a major relief to foreign institutional investors, finance ministry sources have said that the General Anti-Avoidance Rule, which will be introduced from 1 April, will not target participatory notes, or P-notes.

The finance ministry will not be chasing after these P-notes, or derivative products that allow foreign investors to invest anonymously into Indian equities.Only participatory notes which fail certain regulatory tests may be subject to taxation.

P-notes are issued by foreign portfolio investors registered with the market regulator, or by their sub-accounts, to investors overseas and they offer the buyer anonymity. Investments through these instruments are estimated at Rs 1.8 lakh crore. If these notes were to be taxed due to GAAR provisions, many foreign investors will have to re-visit their strategies.

Reacting to the news, the Sensex immediately shot up 300 points to 17354, while the Nifty is up 85 points at 5289. GAAR will be invoked only if the company is found setting up plant in a country that has a DTAA with India for the purpose of tax avoidance.Sources told CNBC-TV18 that GAAR will be invoked only if a transaction fails the main purpose test, after which the I-T department will have to prove one of the other.

Muthoot Finance and Manappuram Finance crash further

1:00 pm Even though Sensex is trading higher it has shed more than half its gains from the day’s high.

Reliance Industries, BP are planning submit integrated plan for KG-D6 gas. The plan would help in cost savings of over $ 1 billion due to integration and optimisation, say media report. Reports stated that RIL and BP made a presentation to the Oil Secretary G C Chaturvedi on March 16 detailing “an integrated and capital efficient plan for block development.

Tata Communication surges 2 percent at Rs 223.10 as TCL is planning to hive off its data centre business into a subsidiary to unlock its value and enable it to raise funds without putting a strain on the parent company.

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. According to new rules, these companies will have to ensure that adequate due diligence is carried out on customers.

Delta Corp gains 2.29 percent at Rs 69.10 on BSE after Goa government reduces the entry fee to offshore casinos to Rs 500 from Rs 2000 earlier.

Deep Industries rises 2.04 percent to Rs 65 , with the stock extending Monday’s 3.49 percent gains triggered by the company’s consortium with Monnet Ispat & Energy winning coal bed methane blocks in Indonesia.

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

Bank of India in green on launching online remittance service for NRIs. The stock is up 1.4 percent

RInfra gains on likely fund raising via NCDs, rupee recovers

11:30 am Sensex continues with early gains on positive global cues. It is currently trading at 17,189 up 137 points, while Nifty is quoting 5,227, up 43 points.The rally today is driven largely by the Large-Cap shares while the broader indices are marginally higher.

Rupee recovered from two-month lows today, rising by 31 paise to 50.96 a dollar.

Realty, Teck, FMCG and IT indices on the BSE are among the top leaders so far in the session. The Pharma index too is up by almost 1 percent. Power, Auto, Oil & Gas and PSU indices are relatively subdued.

Reliance Infrastructure rises 1.43% at Rs 591 on BSE on reports the company is planning to raise Rs.365 crore through non-convertible debentures, or NCDs, today.

13 sugar stocks rally, auto stocks down on Maha motor tax

10:30 am Sugar stocks rally on the bourses after the government decided to allow the export of another 1 MT of sugar export under the Open general license (OGL) in view of surplus production.The EGoM will review wheat and rice exports after 2 months. Following the news, shares of 13 sugar companies rose between 0.39% to 9.4% on BSE.

Among the major sugar stocks, Shree Renuka Sugars is up 4.43 percent,Sakthi Sugars is up 6 percent at Rs 26.15,Bajaj Hindusthan has gained 2.27 percent, Dhampur Sugar Mills is up 2.2 percent and Balrampur Chini Mills is trading 2.24 percent higher today.

Auto stocks too are 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%

Brent held steady above $125 today as comments from the US Federal Reserve indicating easy monetary policy would remain in place for some time raised investors’ appetite for riskier assets.

Sensex erased 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.The Sensex is up 13 points at 17,066 and the NSE benchmark rose 2.5 points to 5,187.

Meanwhile, interest rate on Public Provident Funds have been increased to 8.8% from 8.6%, while Monthly Income Schemes will attract 8.5% interest against 8.2% now.

Mannapuram bleeds on KYC norms, Sensex up 0.9%

9:30 am Markets open higher today with the Sensex gaining 0.9 percent in opening trade at 17217 and the Nifty keeping its head above 5200, tracking global cues.Top Sensex winners include L&T, RIL and HDFC Bank while the losers include, Maruti Suzuki, which was trading 0.2 percent lower and Coal India was trading at Rs 332, down 0.09 percent.

Equities globally have rallied after comments from Federal Reserve Chairman Ben Bernanke indicated that interest rates in the US will stay exceptionally low for a long time to support growth and boost jobs.

Mannapuram and Muthoot Finance are bleeding today as the Reserve Bank announced fresh rules for MFIs and gold loan NBFCs yesterday to prevent injustices to customers. They need to ensure that Know Your Customer (KYC) guidelines are complied with and adequate due diligence is carried out on customers. While Mannapuram is down 5 percent at Rs 30.60, Muthoot Finance is down 4 percent at Rs 133.60

ICICI Bank has sent a loan recall notice to the cash strapped Kingfisher Airlines. While the bank declined to comment, Kingfisher says that ICICI Bank has sought topping up of security or adjustment of loan but there is absolutely no recall of the entire loan amount. Reacting to the clarification by the airline, the stock is up 1 percent today while ICICI Bank is down about 0.70 percent today.

Sources say that Coal India’s independent directors have sounded a dire warning on the fuel supply agreements (FSAs). The six non-executive directors have written to the government saying that the proposal to sign 20-year FSAs with a guarantee to meet at least 80% of the commitment is neither fair, nor in public interest. The stock is down marginally at Rs 331.55 today.

The sugar space is in focus as the Empowered Group of Ministers gave its nod for export of 1 million tonne of additional sugar.

Reliance Infra is likely to mull raising Rs 365 crore via non-convertible debentures (NCD) today. The stock is up 2 percent today.

Tata Metaliks is likely to issue 10 million preferential shares to Tata Steel and the stock has soared 5.5 percent in early trade.

Tata JLR announces pricing of 500 million pound senior notes at the coupon rate of 8.25 percent per annum. Tata Motors has gained 1 percent today.

The government and the RBI will meet today to finalise the borrowing calendar for the first six months. The government could end up borrowing atleast Rs 3.5 lakh crore in the first half. Bond markets are eagerly awaiting this figure.