Key benchmark indices hovered in a narrow range in positive zone in mid-morning trade. At 11:15 IST, the barometer index, the S&P BSE Sensex was up 73.40 points or 0.26% at 28,133.34. The Nifty 50 index was currently up 24 points or 0.28% at 8,674.30. The market breadth indicating the overall health of the market was strong. On BSE, 1,385 shares rose and 811 shares declined. A total of 162 shares were unchanged. The BSE Mid-Cap index was currently up 0.43%. The BSE Small-Cap index was currently up 0.54%. Both these indices outperformed the Sensex.
Meanwhile, the Union Cabinet yesterday, 24 August 2016, approved amendments to the Double Taxation Avoidance Agreement (DTAA) with Cyprus, which could impact foreign portfolio investment and foreign direct investment into India from Cyprus. With the revision of the treaty, India will have the right to tax capital gains arising in India for entities resident in Cyprus. All existing investments from Cyprus and additional investments made up to 31 March 2017 will be grandfathered like the Mauritius Treaty and therefore capital gains tax will not be applicable on shares acquired prior to 1 April 2017. According to a government statement, the proposed DTAA with Cyprus also expands the scope of the Permanent Establishments (PE) that enables source based taxation of business income.
As per media reports, foreign direct investment into India from Cyprus totaled $3.3 billion in 2015-16. Companies based in Europe and the US use Cyprus to route investments in India to take advance of the tax treaty, reports suggest. The Indian government is also in discussion with Singapore for amending tax treaty with Singapore.
IT stocks declined. Wipro (down 1.48%), TCS (down 0.65%) and Tech Mahindra (down 0.43%) edged lower. HCL Technologies (up 1.68%) and Oracle Financial Services Software (up 0.57%) rose.
Index heavyweight and software major Infosys was down 1% at Rs 1,047. The stock hit a high of Rs 1,058 and a low of Rs 1,044 so far during the day.
Telecom stocks were mixed. Bharti Airtel (down 0.6%) edged lower. Reliance Communications (up 0.87%) edged higher. Idea Cellular was unchanged at Rs 98.20.
Bharti Infratel was off 0.92% at Rs 343.20. Bharti Infratel is a telecom tower arm of Bharti Airtel.
Index heavyweight and housing finance major HDFC was up 0.23% at Rs 1,387.40. The company during market hours today, 25 August 2016, announced that it intends to raise Rs 500 crore from issue of non-convertible debentures on private placement basis. The debentures will carry a coupon rate of 7.7% per annum and will have a tenor of 1 year 6 months. The proceeds of the issue would be utilized for financing/refinancing the housing finance business requirements of the company. The issue opens and closes for subscription tomorrow, 26 August 2016.
Bosch was off 0.04% at Rs 23,660. The stock hit a high of Rs 23,786.65 and a low of Rs 23,600 so far during the day. The company fixed 6 September 2016 as the record date for the proposed buyback offer of the company. The announcement was made after market hours yesterday, 24 August 2016. On 1 July 2016, board of directors of Bosch had approved buyback of 8.78 lakh fully paid up equity shares, or 2.79% equity, at Rs 23,000 per share through the tender offer route. The buyback offer aggregates to Rs 2019.76 crore. Bosch's German parent Robert Bosch GmbH has decided to participate in the buyback offer. The foreign parent currently holds 71.18% stake (as per the shareholding pattern as on 30 June 2016).
PNC Infratech rose 2.4% at Rs 123.95 after consolidated net profit jumped 145% to Rs 54.2 crore on 6.23% decline in total income from operations to Rs 635.5 crore in Q1 June 2016 over Q1 June 2015. PNC Infratech said that the decline in total income from operations is attributed to application of Indian Accounting Standards (Ind-AS) for the first time. Based on Indian GAAP, however, consolidated revenue was higher by 26.9%, it added. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 25.4% to Rs 165.8 crore in Q1 June 2016 over Q1 June 2015. The EBITDA margin improved from 19.5% in Q1 June 2015 to 26.1% in Q1 June 2016. The result was announced after market hours yesterday, 24 August 2016.
In overseas stock markets, Asian stocks witnessed a mixed trend ahead of Federal Reserve Chairwoman Janet Yellen's speech tomorrow, 26 August 2016, which could provide hints about the timing of the next rate hike from the Fed. US stocks closed lower yesterday, 24 August 2016, with healthcare stocks leading the decline triggered by intensifying outrage over the pricing of a lifesaving drug by Mylan Inc. Meanwhile, Yellen is due to speak tomorrow, 26 August 2016, at the Kansas City Fed's annual Monetary Policy Symposium in Jackson Hole, Wyoming. Minutes from the Federal Open Market Committee's (FOMC) July meeting showed officials were split on whether an increase in interest rate was needed soon.
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