GAP DOWN START

The Indian equity markets have made a gap down start as investors booked their profits recorded in the previous four sessions amid a weak trend in other Asian markets. Moreover, there was no debt deal yet, which is even unlikely before European Union Summit that would be started today. Fitch downgraded Italy and Spain among others last week. Back home, NSE's Nifty and BSE's Sensex declined below their crucial 5,200 and 17,100 level respectively in opening trade. Dismal third quarter performance of BHEL on margin front also weighed down the markets sentiment. Power equipment major slumped more than 8% as the company's operating profit margin (OPM) declined sharply in Q3 FY12. NTPC also declined on poor Q3 results. However, sugar stocks rose after Prime Minister Manmohan Singh constituted an Expert Committee under the Chairmanship of C Rangarajan, Chairman Economic Advisory Council to the Prime Minister, to examine issues relating to the sugar sector. On the sectoral front, fast moving consumer goods and software remained the only gainers while, capital goods, power and metal witnessed the most selling pressure, dragging down the Sensex. Moreover, the broader indices too were struggling to get some traction and the market breadth on the BSE was negative; there were 698 shares on the gaining side against 801 shares on the losing side while 61 shares remained unchanged. 

The BSE Sensex opened at 17,138.04; about 95 points lower compared to its previous closing of 17,233.98, and has touched a low of 17,056.18 while high remained its opening.

The index is currently trading at 17,080.71 down by 153.27 points or 0.89%. There were 7 stocks advancing against 23 declines on the index.

The overall market breadth has made a negative start with 44.74% stocks advancing against 51.35% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices declined by 0.41% and 0.24% respectively.

The only gaining sectoral indices on the BSE were, FMCG up by 1.34% and IT up by 0.02%. While, CG down by 2.63%, Power down by 2.15%, Metal down by 1.76%, Bankex down by 1.37% and Realty down by 1.16% were the top losers on the index.

The top gainers on the Sensex were Bajaj Auto up by 1.09%, Sun Pharma up by 0.96%, GAIL up by 0.74%, Hero MotoCorp up by 0.71% and Wipro up by 0.56%.

On the flip side, BHEL was down by 7.93%, Sterlite Industries was down by 3.20%, Bharti Airtel was down by 2.56%, Hindalco was down by 2.46% and Tata Steel was down by 2.46% were the top losers on the Sensex.

Meanwhile, India and 31 countries have joined hands to ensure that individuals and multinational enterprises pay the right amount of tax, at the right time and in the right place. The convention sends a strong signal to individuals and companies that it will no longer be easy to evade taxes. It is of greater significance to India as it will give a further boost to the efforts of the Government in bringing the Indian money illegally stashed abroad.

The convention was signed by Sanjay Kumar Mishra, Joint Secretary, Foreign Tax & Tax Research Division, Department of Revenue. The instrument till now was available only for members of OECD and Council of Europe. It was amended in 2010 and is now open for all countries since June 2011. Many more countries are expected to sign the Convention in future.

This instrument is multilateral and a single legal basis for multi-country co-operation as against the DTAAs/TIEAs which are bilateral. It not only facilitates the exchange of information, but also provides for assistance in the recovery of taxes. It allows tax officials to enter into the territory of the other country to interview individuals and examine records. The Convention also allows exchange of past information in criminal tax matters. The information received under the convention can also be used for other purposes besides those related to tax co-operation, for example to counter money laundering with the approval of the supplying state.

Present signatories to the amended Convention are: Argentina, Australia, Belgium, Brazil, Canada, Denmark, Finland, France, Georgia, Germany, Iceland, India, Indonesia, Ireland, Italy, Japan, Korea, Mexico, Moldova, Netherlands, Norway, Poland, Portugal, Russia, Slovenia, South Africa, Spain, Sweden, Turkey, Ukraine, the United Kingdom, and the United States.

The S&P CNX Nifty opened at 5,163.55; about 41 points lower compared to its previous closing of 5,204.70, and has touched a high and a low of 5,166.15 and 5,147.60 respectively.

The index is currently trading at 5,157.45, lower by 47.25 points or 0.91%. There were 15 stocks advancing against 35 declines on the index.

The top gainers of the Nifty were RPower up by 2.78%, Sesa Goa up by 1.42%, Sun Pharma up by 1.16%, Bajaj Auto up by 1.06% and GAIL up by 0.93%.

On the flip side, BHEL down by 7.93%, IDFC down by 3.73%, Sterlite Industries down by 3.31%, JP Associates down by 3.18% and SAIL down by 2.47%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite was down 7.42 points or 0.32% to 2,311.70, Hang Seng was down 100.35 points or 0.49% to 20,401.32, Jakarta Composite was down 65.60 points or 1.65% to 3,920.81, Nikkei 225 was down 41.62 points or 0.47% to 8,799.60, Straits Times was down 16.55 points or 0.57% to 2,899.71 and Seoul Composite was down by 19.35 points or 0.98% to 1,945.48.

On the flip side, Taiwan Weighted was up by 186.26 points or 2.57% to 7,419.95.