Tax Reform Talks Bolster Stocks in India

Mayank Mehta
13 Aug, 2009
New York City

Stocks in India surged after the government proposed to lower individual and corporate taxes to the lowest on record. The simplified and lowered tax regime with vigorous enforcement is expected to widen the taxpayer base from the current 2.5% of population.

[R]6:00 PM Mumbai, 8:30 AM New York – Stocks in India surged after the government proposed to lower individual and corporate taxes to the lowest on record. The simplified and lowered tax regime with vigorous enforcement is expected to widen the taxpayer base from the current 2.5% of population.[/R]

Stocks surged after Finance Minister Mukherjee proposed to lower corporate and individual tax rates. In the revised and simplified tax regime corporate taxes will be lowered to 25%. Individual will pay taxes on earnings above 10 lakh rupees at a rate of 10%.

The government hopes that simplified taxes and tighter tax enforcement will improve revenues collection and lower its dependence only 2.5% of the population.

The Sensex index in India increased 498.33 or 3.32% to 15,518.49 and CNX Nifty index rose 147.50 or 3.31% to 4,605. Among the Sensex 30 stocks all stocks closed higher.

On BSE trading, 2,211 stocks advanced, 515 declined and 61 were unchanged.

Gainers & Losers

Adlabs Films Limited gained 3.6% or Rs.11.60 to Rs.325.50 after the board approves Rs.600 crore fund raising.

Ambuja Cements Limited rose 3.0% or Rs.3.10 to Rs.103.60.

Compact Disc India Limited the animation company jumped 13.6% or Rs.7.95 to Rs.66.10.

Everonn Systems India Limited surged 5.7% or Rs.20.10 to Rs.367.00 after a Rs. 918.7 million order from government of Uttar Pradesh.

Hindustan Petroleum Corporation Limited an integrated oil refining and marketing company fell 1.1% or Rs.1.45 to Rs.352.65.

ICICI Bank Limited rose 5.0% to Rs.746.20 after its American depository receipt or ADR increased 3.78% overnight to $30.44 on the New York Stock Exchange.

Jammu and Kashmir Bank Limited increased 5.7% or Rs.27.00 to Rs.495.20.

Maruti Suzuki India Ltd increased 6.4% to Rs 1,373.10 after the talks of lower individual tax rate lifted stocks in the auto sector.

Mastek Limited gained 3.4% to Rs.268.00 and IT solutions provider launched a new platform to enable new insurance carrier to launch business in 90 days.

National Aluminium Company jumped to Rs.320.30 and separately the company strengthened security at mine after Maoist terrorist threat.

Orchid Chemicals & Pharmaceuticals Ltd jumped 3.9% or Rs.3.95 to Rs.105.25 after it received the final approval from the US Food and Drug Administration for its drug Sumatriptan Succinate tablets.

Pantaloon Retail (India) Limited slumped 1.3% Rs.302.45.

Pratibha Industries Limited jumped 8.6% or Rs.14.05 to $175.75 after the company received an order worth Rs 523 crore for construction of ESIC Medical College at Patna from National Buildings Construction Corporation.

Prime Securities Limited rose 4.6% or Rs.1.35 to Rs.30.55 after the company cancelled 6 lakh warrants at exercise price of Rs 275.

PSL Limited surged 10.4% or Rs.13.40 to Rs.141.25 after the pipe manufacturer receive an order worth Rs 500 crore from Gail (India) Ltd.

Reliance Industries added 1.7% to Rs 2,024.30.

Sun TV Network Limited the engaged in producing and broadcasting satellite television added 3.3% or Rs.9.15 to Rs.280.15.

Rallis India Limited surged 4.2% or Rs.31.10 to Rs.768.05 after the board approved buying up to 35.80% equity shares from other Tata group founders for not more than 850 rupees per share.

Usher Agro Limited jumped 8.8% or Rs.3.00 to Rs.36.75 after the food processor commenced commercial production for second line of its rice mill with a capacity of 94,400 mtpa at Chhata, Mathura.

Unitech Limited advanced 5.1% or Rs.4.55 to Rs.92.90 after the real estate developer plans to invest Rs. 600 crore into affordable housing.

Three aviation stocks surged after Civil Aviation Minister Praful Patel said the government will look into the issue of jet fuel pricing and the demands of airline industry.

Jet Airways rose 5.6%, Kingfisher Airlines rose 5.9%, and SpiceJet surged 9.3%.

Bank of Baroda rose 3.6% or Rs.15.50 to Rs.440.60. Bank of India rose 3.5% or Rs.11.15 to Rs.322.65. Canara Bank gained 1.3% or Rs.3.70 to Rs.271.80. HDFC Bank rose 1.6% or Rs.22.15 to Rs.1,424.95.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 82.19 or 0.79% to 10,517.19, Hang Seng index in Hong Kong increased 426.06 or 2.08% to 20,861.30 and CSI 300 index in China higher 43.42 or 1.28% to 3,440.82. ASX 200 index in Australia increased 92.80 or 2.14% to 4,435.90. The FTSE Bursa KL Composite index in Malaysia closed higher 5.65 or 0.48% to 1,186.19.

The Kospi Index in South Korea decreased 0.71 or 0.05% to close at 1,564.64. SET index in Thailand closed higher 12.66 or 1.97% to 655.68 and JSE Index in Indonesia increased 49.13 or 2.09% to 2,396.49. The Sensex index in India increased 498.33 or 3.32% to 15,518.49.