Sensex Surge 2%, Higher Advance Tax Payments

123jump.com Staff
17 Jun, 2008
New York City

Stocks in India rose after leading companies pre-paid higher taxes, lifting optimism for earnings for the current quarter. Banks, realty and industrial companies led the rally. In Mumbai trading, the 30-share BSE Sensex gained 2% or 301.08 at 15,696.90. On the National Stock Exchange CNX Nifty rose 1.8% or 80.5 to 4653.

[R]10:00AM New York, 7:30PM Mumbai - Indian markets closed firm on higher advance tax payments by companies.[/R]

Indian shares rose on Tuesday for a second day in a row supported by reports of higher advance tax payment of first installment by leading companies and easing global crude prices.

Banking and realty shares led the Tuesday''s rally. In Mumbai trading, the 30-share BSE Sensex gained 2% or 301.08 at 15,696.90. On the National Stock Exchange CNX Nifty rose 1.8% or 80.5 to 4653.

Of the BSE traded shares, 1,802 shares rose, 882 declined and 80 shares remained unchanged.

Advance tax payment rises

Many companies have paid higher advance tax in the first installment of 15 June compared to the corresponding period last year, raising expectations earnings gain. The Finance Minister expects direct tax collection for the current year to cross 4 lakh crore rupees.

Advance taxes are paid in four installments, in June, September, December and March. Usually, the first payment in June is 15% of the total estimated annual tax.

Monsoon rain 40% above average

India''s monsoon rains in the first half of June 2008 were 40% above the long-term average, raising hopes of strong crop output at a time when rising food prices have helped push inflation to a 7-year high.

Trading statistics

Daily turnover on the BSE stood at 5,312 crore rupees and on the NSE at 10,991 crore rupees.

Anu''s Laboratories was the most active stock on the BSE with the highest trading turnover of 449.52 crore rupees followed Reliance Capital, Reliance Industries, Reliance Petroleum and Larsen & Toubro.

Chambal Fertilizers & Chemicals recorded the highest volume of 1.22 crore shares on BSE followed by Anu''s Laboratories, Reliance Natural Resources, Nagarjuna Fertilizers & Chemicals and Reliance Petroleum.

Economy to grow by 9.5%

India''s real GDP is expected to grow at 9.5% in the financial year 2009, according to the Centre for Monitoring Indian Economy.

In its monthly review, the centre said Asia''s third largest economy is heading towards the fourth consecutive year of above 9% growth fueled by investment through capital markets. The industrial projects worth 3.4 lakh crore rupees (or $100 billion) are scheduled for commissioning, a record level of investment.

The capital investment boom in the country drives the current growth phase of the Indian economy. India''s GDP started rising by over 8% since four years ago and the gross capital formation rose in the range of 13% to 23% during this same period. The Mumbai based CMIE said it expects growth in gross capital formation to accelerate to 18.7% in the current financial year up from 13.4% in the previous period.

Duty collection grow 4.4% in May

Excise duty collections surged 4.4% in May helping the government to collect 12.8% higher revenues at 35,216 crore rupees from indirect taxes, barring service tax, for the first two months of this fiscal. April service tax collections surged 40% to 6,093 crore rupees in that month, according to the official data released in New Delhi.

Excise duty collections gained 0.9% at 15,993 rupees crore for the first two months of the current year from the same period a year ago, buoyed by 4.4% growth in May at 9,583 crore rupees against 9,175 crore rupees in the month last year.

For the month of April, collections under excise duty had fallen by 3.9% to 6,410 crore rupees against 6,673 crore rupees in the same month last year.

Finance Minister P Chidambaram had said that meeting target of excise duty collections for this fiscal year may be challenging. Excise duty collection growth in May fell short of the target of 8.8% growth for the whole fiscal.

Customs duty and service tax collections are targeted to grow at 14.4%t and 26.1% during the current fiscal respectively.

Gainers and losers

Housing Development Finance Corporation gained 6% at 2,298.05 rupees. The company paid advance tax of 140 crore rupees in the first installment, marking an over 40% increase over the corresponding figure a year ago.

Maruti Suzuki climbed 5.2% at 755.60 rupees on reports the company plans to introduce its own entry price car to compete with Tata Motors’s Nano with a stripped-down version of Maruti 800, its leading model.

Reliance Communication fell 0.9% to 530.20 rupees. Reliance Industries claimed first right of refusal to buy a controlling stake in the mobile company. Reliance Communications, controlled by Anil Ambani, is in exclusive talks with South Africa''s MTN about a tie-up that could create a top-10 global telecoms firm.

Anil Ambani controlled ADAG is considering to swap its controlling stake of 66% in Reliance Communications to become the largest shareholder in the newly merged company with 33% stake. Reliance Industries surged 1.9% at 2,329.20 rupees.

Reliance Power rose 3.4% at 191 rupees on reports the firm will get a $500 million loan from the Asian Development Bank for its 4,000-megawatt ultra mega power project coming up in Andhra Pradesh.

Ashok Leyland rose 0.9% to 33.05 rupees after the company said it has made a strategic investment in Albonair GmbH, Germany for development of vehicle emission treatment products.

Asian markets review

In Tokyo Nikkei 225 Index closed lower 6.00 or 0.04% to 14,348.37, in Hong Kong Hang Seng index increased 28.30 or 0.12% closed to 23,057.99. In Australia ASX 200 index higher 51.00 or 0.95% to close 5,422.70. In Malaysia KL Composite index decreased 10.30 or 0.83% closed to 1,227.76.

In South Korea Kospi Index decreased 10.11 or 0.57% to close at 1,750.71, in Thailand SET index closed lower 10.42 or 1.32% to 777.17 and Indonesia JSE Index edged decreased 20.07 or 0.84% to 2,377.98. Sensex index in India increased 301.08 or 1.96% to 15,696.90.