Nifty reclaims 8600, Sensex firm; Sun, Tata Motors rally

Moneycontrol Bureau

09:40am Tax Notice: In the biggest-ever tax demand slapped on them, nearly 100 foreign funds have been asked to cough up an estimated USD 5-6 billion for 'untaxed gains' made by them in the Indian markets over the past years.

The number of affected investors can rise substantially as assessments are still in progress and notices could be served in many more cases, taking the overall tax demand from them to well over USD 10 billion, sources said.

Spooked by these "retrospective" notices and assessment orders, the foreign investors have begun lobbying intensely with the policy makers and regulators, while stating that the move goes against the government's stated position of providing a 'non-adversarial and stable tax regime'.

The FIIs have, however, decided to challenge the tax demands, stating that MAT cannot be levied on FIIs or FPIs as they do not earn any 'business income' in India and their income is defined as 'capital gains' under the I-T Act.

09:15am Market Check

After a long weekend, the market opened on a positive note on Monday. The Sensex rose 101.77 points to 28361.91 and the Nifty advanced 29.55 points to 8615.80. About 519 shares have advanced, 118 shares declined, and 93 shares are unchanged on the BSE. Sun Pharma climbed 2 percent as it settled litigation for generic Angiomax with The Medicines Company, US. Tata Motors also rallied 2 percent as the stock went ex-rights today.

ONGC, Dr Reddy's Labs, Cipla and NTPC were other prominent gainers, up over 1 percent whereas banking & financials and technology stocks were under pressure on profit booking.

The Indian rupee gained by 40 paise in the early trade on Monday. It has opened at 62.10 per dollar against 62.50 Tuesday.

Agam Gupta of Standard Chartered said, "“We expect demand from the local government banks to come in at 62/dollar and see a range of 61.90-62.40/dollar for the day.”

“Uptick towards 62.30/dollar will see exporter selling. The RBI monetary policy tomorrow will be keenly awaited and will give further direction to the markets," he added.

The dollar dropped, after a dismal US jobs report pushed up US treasury yields as investors pared bets the Federal Reserve would hike interest rates anytime soon.