Sensex closes at 2-month low on GAAR fears, rupee at 51.28

4:oo pm The Sensex closes in deep red as traders turned bearish on concerns that the Reserve Bank of India may not cut interest rates in view of high international crude oil prices. BSE benchmark dropped 1.77 percent or 307 points to 17,055 and the NSE benchmark was down 96 points to 5,182, underperforming global peers due to GAAR related selling

The rupee too extended its fall, losing 26 paise to 51.28 a dollar.

Fall in Indian rupee against the US dollar is set to increase subsidy burden if fuel prices are not hiked and that will also impact the sentiments adversely, say dealers**.**

New General Anti-Avoidance Rules (GAAR) provisions will be applicable from April 1, which means P-Note based transactions will now be subject to tax. Accordingly foreign institutional investors (FIIs) are revaluating all their PNs/ offshore derivative instruments now. Mauritius based FIIs will need to reassess strategy.The total FII investment into Indian equities stands at Rs. 11.15 lakh crore. Nearly 17% of FII participation in the Indian equity markets is through the P-note route or Rs 1.8 lakh crore.

Shares of big banks like ICICI Bank tripped almost 4 percent, State Bank of India’s shares, also dived 1.5 percent. Axis Bank, Union Bank and Canara Bank shed more than 3 percent. The sector index,Bankex, also tumbled 2 percent.

Tilaknagar Industries tanked 4 percent after Tamil Nadu government proposed 14.5 percent tax on alcohol purchased from bars and restaurants while there is no tax on alcohol from TASMAC (Tamil Nadu State Marketing Corporation which enjoys monopoly in retail of Alcohol).

Kotak Mahindra gains after block deal, Sensex at day

3:pm The main I indices fell to new low with the Nifty trading below the 5,200 levels while the BSE Sensex losing nearly 300 points amid reports that the proposed General Anti-Avoidance Rules (GAAR) could affect FII investments through participatory notes (P-notes), which runs into billions of dollars.

The GAAR comes into effect from April 1. FIIs are worried that the Government could raise tax demands as a result of these new provisions.

Metal, FMCG, PSU, Realty,HC, Oil and Gas,Teck, Consumer Durables, Auto, Bankex,IT, Power indices are the losers.

Kotak Mahindra Bank rose 2.08 percent at Rs 535.65 on BSE after a mega bulk deal of 2.65 crore shares, or 3.57 percent equity, was executed on the counter at Rs. 530.40 per share in opening trade on BSE.

Rupee at 2-month low, Sensex off day’s low

2:00 pm IVRCL rises 4.63 percent at Rs 61 on BSE on report that private equity players are looking to buy management stake in the company.

Gammon Infrastructure rallies 11% to Rs 15 after the company said it has received a construction contract worth of Rs 935 crore from the National Highways Authority of India (NHAI).

Rupee gives up early gains and skidded to its lowest in more than two months pressured by oil payments and subdued shares.

Warburg Pincus exits US$272mn investment in Kotak Mahindra Bank following which the Bank clocked volume of 2.66 crore shares on BSE, a 330.82-times surge over two-week average daily volume of 81,000 shares. The stock rose 2.33% to Rs 537.

BSE Sensex continued to trade sharply lower since early trade, though it showed somewhat recovery from day’s low. Shares of ITC and Wipro outperformed, rising 0.6% each.

Sugar stocks turn sweet ahead of EGoM meet

12:30 Seeking to increase its kitty, the government has proposed a steep hike of 160 times in stamp duty for leave-and-licence agreements for residential and commercial properties due to which Indiabulls Real Estate,Oberoi Realty and Housing Development & Infrastructure are the biggest losers today, down 3.73 percent, 1.15 percent and 5 percent, respectively.

Sugar companies are trading higher as EGoM headed by Finance Minister will meet today to decide on allowing additional export up to 1 million tones of sugar in the 2011-2012 marketing year. Bajaj Hindusthan is currently trading at Rs. 31.40, up by 0.20 points or 0.64%, Dhampur Sugar Mills is up one percent while Sakthi Sugars is currently trading at Rs. 25.40, up by 0.90 3.67 percent.

Reliance Retail is planning to raise up to Rs 4500 crore n from its parent company, Reliance Industries, to accelerate store openings and grow aggressively in select formats, according to reports.

Banking stocks dropped over 2% as high oil prices are sparking fears of a delay in rate cuts from the RBI.The BSE Sensex is currently trading at 17,105.06, down by 256.68 points or 1.48%. The index has touched a high and a low of 17,377.59 and 17,087.88 respectively.

ICICI Bank sheds over 3 percent, Nifty at day’s low

11.30 am:Nifty is still hanging around the 5,200 mark and the broader markets have shed around 1.5 percent today. Sensex still trades around 17,105.

Jaiprakah Associates rallied nearly 2 percent as the company received two contracts worth Rs 913 crore from Bhutan. Max India is also up 4.6 percent and is the biggest gainer today.

Banks have shed the most with the Bankex now down 2.15 percent. ICICI Bank is down 3.2 percent while SBI is down 2 percent.

Though bank stocks have been doing badly, Kotak Mahindra Bank is up 1.8 percent despite Warburg Pincus sold 3.6 percent stake in the company in a block deal in the morning.

Consumer stocks have performed decently with Godrej Consumer, Colgate Palmolive gaining 1.8-2 percent.

Nifty breaks crucial 5,200 mark, EIH up 5% on rights issue report

10.30 am: Markets have come under broadbased selling pressure. This was expected to an extent due to the roll over this week when traders have to close their positions (long or short) and carry forward it to the next month. Sensex is now down 240 points at 17,122 and Nifty is down 78 points at 5,199.

Realty, power and bank stocks have been the major losers. All of them have shed 3 percent already. Manappuram continues to bleed after new regulations by the Reserve Bank last week that will affect gold loan firms negatively. the stock is down 8 percent and is the biggest loser in the early trade. Pantaloon, HDIL, JSW Energy, Axis Bank and Yes Bank are some other major losers till now.

EIH Hotels has now gained 5 percent and is trading at Rs 88.90 after reports of rights issue and tips the list of gainers today.

Sluggish opening, realty plunges on likely stamp duty hike

No fireworks in opening trade today as the Sensex and Nifty open flat. Sensex opens 85 points lower, while the Nifty opens around 18 points lower near the 5250 mark due to pressure in rate sensitive stocks like banks, capital goods and realty.

BHEL is down 2 percent today, financials like ICICI Bank, IDBI, SBI and Kotak Bank are down about a percentage point.

Coal India’s controversy over one of its FII’s alleging corporate governance fraud has led to the stock falling further by 1 percent at Rs 331.70.

Mumbai-based realty stocks like Oberoi, IndiaBulls, HDIL are down around 2 percent today as theMaharashtra government is planning 160 times hike in stamp duty for leave - licence properties. This will be hugely negative for Mumbai real estate companies like Indiabulls, Oberoi, HDIL and even Bombay Dyeing, Raymond will be impacted.

Agency reports say Kingfisher Airlines will pay only Rs 10 crore of service tax due till March-end as against a total of Rs 76 crore due to be paid to the service tax department. But the news came as no relied for investors and the stock is down around 1.67 percent today.

The rupee opens at51.09/10, against the dollar, firmer than last week’s close of 51.17/18, drawing support from a firmer euro that indicates better risk appetite, traders said.

Stocks like ITC, Axis Bank and L&T will be in focus today as the Cabinet approved the winding up of SUUTI. Axis Bank, however, is down percent, ITC is trading flat while L&T is down 1 percent in early trade today. The replacement undertaking, national asset management company, will leverage the SUUTI portfolio to raise fresh capital. As per finance ministry sources, the wind up timeline is in next fiscal.

Agency reports say Kingfisher Airlines will pay only Rs 10 crore of service tax due till March-end as against a total of Rs 76 crore due to be paid to the service tax department. But the news came as no relied for investors and the stock is down around 1.67 percent today.

The Company Law Board will hear the Telenor versus Unitech case today. Talks between the two joint venture partners remained inconclusive over valuation of Uninor. The CLB will hear Unitech’s plea under section 45 of the Arbitration Act.

Maruti has announced plans to set up a new diesel engine plant in Gurgaon as demand has shifted drastically from petrol to diesel. They will now invest Rs 1700 crore in the new plant and it will be operational by mid 2013. The stock is up 1 percent at Rs 1,320 on the BSE.

Agency reports indicate that GAIL is discussing many project stakes and long-term deals in the US. The company is planning to raise $100 million via overseas bond issue in the next few months. However, the stock is marginally down by 0.63 percent at Rs 367.80

EIH Hotels may consider a rights issue and reports say they are considering to merge the company’s wholly owned unit Maharaj with the company.The stock is up around 3 percent.

Hotel Leela has powered up and is up nearly 9 percent in trade today.

Aditya Birla Nuvo board will be meeting today to consider fund raising proposals. The stock is up almost 1 percent up.

Gold finance companies are again trading lower today after the RBIReserve Bank of India (RBI) put a restriction on how much value of the gold being kept as collateral they can lend to borrowers . Mannapuram Finance is down 4 percent in early trade while Muthoot Finance is down 2.5 percent.