Market hits 18-week low as India, Mauritius to restart negotiations on the tax treaty

The key benchmark indices fell sharply in morning trade to their lowest level in more than 18 weeks in the reports of Mauritius has agreed to negotiate and revise the existing double taxation agreement (DTAA) with India. Data showing the sustained selling by foreign funds in recent days have weighed on sentiment. BSE Sensex fell 410.44 points or 2.3%. The size of the market was weak. RCOM R-Infra and drop these two populations will be excluded from the BSE Sensex from August 8, 2011. Metal stocks fell on worries about the global economic recovery. Interest rate auto stocks fell on concerns sensitive high interest rates may dent demand for vehicles. Index heavyweight Reliance Industries (RIL) has reached the 52-week low.

The market fell in the first as data showing sustained selling by foreign funds in recent days have weighed on sentiment. The volatility witnessed in the morning trade as the market recovered from the bottom after a fall caused by reports that Mauritius has pledged to negotiate and revise the existing double taxation agreement (DTAA) with the India.

At 10:20 IST, the BSE Sensex fell 410.44 points, or 2.3%, and 17,460. Sensex was 54.64 points higher on the day 17925.17 early trading. The index lost 556.15 points lower to 17,314.38 in today’s morning trading, the lowest since February 11, 2011.

The S & P CNX Nifty fell 110.95 points or 2.07% to 5255.50. The limited success of 5195.90 Nifty intraday trading, its lowest level since February 11, 2011.

The size of the market, which indicates the health of the market was extremely low. On BSE, 1959 shares declined, while 361 stocks advanced. A total of 83 stocks remained unchanged.

Of the 30 member Sensex pack, 29 stocks fell, and a single rose. TCS, Wipro and Cipla fell by between 4.45% and 5.55%.

Index heavyweight Reliance Industries (RIL) fell 3.78% to RS 835.55 on the latest reports, a government watchdog has accused the oil ministry in favor of the company by allowing it to double the cost of developing its gas field in KG-D6. The stock had hit 52-week low of Rs 835 today, June 20, 2011. According to recent reports, a draft report of the Comptroller and Auditor General of India (CAG) has questioned the decision by the Ministry of Petroleum and its technical arm, Director General of Hydrocarbons (GH) to enable the EFI to meet the development cost of RIL KG-D6 field. The Central Bureau of Investigation (CBI) is the examination of cases.

At the same time, advance payment of taxes Ril reportedly jumped 38.46% to Rs 900 crore in Q1 June 2011 over Q1 June 2010.

R-Infra and RCOM declined 9.04% and 6.46% respectively, and was the big loser from the top Sensex pack. Coal India and pharma major Sun Pharmaceutical Industries was 2.44% and 2.03% respectively. The Bombay Stock Exchange (BSE) has kidnapped two Reliance Anil Dhirubhai Ambani (ADA) Group share, Reliance Infrastructure (R-Infra) and Reliance Communications (RCOM), the barometer index BSE Sensex. State-run coal giant Coal India and pharma major Sun Pharmaceutical Industries will replace the R-Infra and RCOM Sensex at August 8, 2011.

Interest-sensitive auto stocks fell on concerns about higher interest rates may require Dent for cars. Tractor and utility vehicle maker Mahindra & Mahindra (M & M) fell 3.98%, with the stock falling for the fourth consecutive day. The company pre-tax income would have increased 42.85% to Rs 90 crore in the first quarter, in June 2011 at the First District in June 2010.

The largest manufacturer of trucks and buses India, Tata Motors shed 0.95%, with a volume of up to a third day as input tax the company would have fallen from 4.61% to Rs 62 million rupees in June 2011 in Q1 Q1 June 2010. Tata Motors, car sales in general rose from 11% to 88,251 units in May 2011 to May 2010. Jaguar and Land Rover sales rose 17% to 22,296 units, driven by a 30% increase in sales of Land Rover. The company announced sales figures for hours on Wednesday, June 15, 2011.

Maruti Suzuki India fell 0.89%, since the position of the sixth day straight. Strike in the company’s Manesar, Haryana unit ended late Thursday, June 16, 2011. The company has reportedly returned 11 employees were laid off during the strike, citing insubordination.

Bajaj Auto dropped 0.75%, with the stock falling for the fourth consecutive day. The company pre-tax income would have increased 13.63% to RS 125 crore in the first quarter, in June 2011 at the First District in June 2010.

Metal stocks fell on concern the global economic recovery. Hindustan Zinc, Sterlite Industries, Jindal Steel & Power, SAIL, Tata Steel, JSW Steel and Nalco paid by between 0.11% to 1.38%.

Shares of network engineering services company GTL fallen more than 56.16%, while another group company GTL Infra dropped over 41%.

Maurice has agreed to renegotiate and amend the existing double taxation agreement (DTAA) with India. Countries must meet soon to work out the details of the new AATD, the Central Board of Direct Taxes (CBDT) chairman Prakash Chandra was quoted as saying. Although the India-Mauritius Joint Working Group had recommended in 2008 by the renegotiation of the AATD, Maurice was the opponent, saying he could not accept India’s proposal for capital gains of companies make profits in India. No capital gains in Mauritius and businesses took advantage of this provision.

India DTAA with 79 countries and countries undergoing the process of reworking of the AATD to include a clause to share banking information. In addition, there are agreements to exchange tax information with 22 tax havens like the Cayman Islands and St. Kitts. Mauritius and other tax havens are increasingly under pressure from the Organization for Economic Cooperation and Development (OECD) in the G-20 to address the problem of money laundering, especially after the United States and other industrialized nations, Pressure mounted on the treatment of terrorist financing.

Meanwhile, government tax revenue in advance in the first quarter of this fiscal year increased 19% to 33% growth recorded in the same period last year, highlighting a tension lines below the company due rising costs of inputs and high interest rates. The retention is mainly composed of business, personal input tax is not due until September 15. Corporate income tax withholding at source (TDS) increased at a healthy rate of 33% this year, up 8% last year. NRI Demat Account

Gross tax collection during April-June 2011 direct to 12 crore Rs 1 lakh beyond, including Rs 40.797 million rupees was given as a refund, leaving net revenue of Rs 60.087 million rupees. The growth of the gross receipts of 24% over the same period last year.

RBI raised its key rate to know the loans. repo rate by 25 basis points to 7.5%, as expected, after a mid-quarter monetary policy 16 June 2011 to tame inflation, saying that monetary policy remains strongly anti-inflationary. While the Reserve Bank of India must continue its anti-inflationary stance, the scale of political action necessary to balance the negative fluctuations in inflation with the latest global developments and their likely impact on the way to inner growth, RBI said in its policy statement on 16. June 2011.

Based on current growth and evolution and the scenario of inflation, the Reserve Bank of India will have to persist with their anti-inflationary monetary policy, the central bank. RBI said it will continue to maintain liquidity conditions so that neither excess liquidity monetary policy dilutes the large deficit or choking cash flow to productive sectors of the economy.

Most Asian stocks fell Monday, June 20, 2011. The key benchmark indices in China, Hong Kong, Singapore, South Korea and Taiwan were down between 0.06% to 0.94%. The key benchmark indices in Japan and Indonesia increased from 0.21% to 0.59%. PAN Card for NRI

The new financial strategy for Greece have been defined at the beginning of July 2011, the Eurogroup, said at the end on Sunday after negotiations with the government and the greek European Commission continued the siege toward solving the nation’s sovereign debt problems .

The U.S. index futures indicated the Dow could fall 44 points at the opening bell Monday, June 20, 2011.

The International Monetary Fund cut its forecast for U.S. economic growth on Friday and warned Washington and European countries in debt they are playing with fire unless they take immediate action to reduce their budget deficits. IMF, in its regular assessment of the global economic situation, said the main threats to growth had appeared since the last report in April, with reference to the debt crisis of the Eurozone and signs of overheating in the emerging economies. The Washington-based global lender provides that U.S. GDP would increase by only 2.5% this year and 2.7% in 2012. In its forecast two months ago, it was expected, 2.8% and 2.9% respectively. NRI Share Trading Account

Federal Reserve holds its next policy meeting Tuesday, June 21, 2011 and Wednesday, June 22, 1011, and will present his policy statement after the conclusion of the meeting. Second round of the Fed quantitative easing or QE2, a temporary policy intended to increase the money supply, to keep interest rates low and stimulate the economy, will expire June 30, 2011. Part of the market speculated on the possibility of a third quantitative easing program, the Fed, after the expire in June 2011. NRI Online Trading account


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