Key indices edged higher in early trade tracking firmness in Asian markets. The barometer index, the S&P BSE Sensex, was currently up 224.31 points or 0.82% at 27,682.95. The market breadth indicating the overall health of the market was quite strong with more than four gainers against every loser on BSE.
Cairn India dropped after the company said that its parent Vedanta Resources Plc's board of directors instructed counsel to file a notice of claim against the Government of India (GOI) under the UK-India bilateral investment treaty (the BIT) in a tax dispute.
In overseas markets, Asian markets were higher today, 30 March 2015. US stocks closed mildly higher on Friday, 27 March 2015, as investors digested Fed Chair Janet Yellen's remarks ahead of first quarter earnings in April.
Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 320.52 crore on Friday, 27 March 2015, as per provisional data. Domestic institutional investors (DIIs) bought shares worth a net Rs 674.76 crore on Friday, 27 March 2015, as per provisional data.
At 9:18 IST, the S&P BSE Sensex was up 224.31 points or 0.82% at 27,682.95. The index gained 232.23 points at the day's high of 27,690.87 in early trade. The index rose 177.30 points at the day's low of 27,635.94 in early trade.
The CNX Nifty was up 58.50 points or 0.7% at 8,399.90. The index hit a high of 8,405.05 in intraday trade. The index hit a low of 8,390.25 in intraday trade.
The BSE Mid-Cap index was up 72.71 points or 0.7% at 10,432.64, underperforming the Sensex. The BSE Small-Cap index was up 123.39 points or 1.18% at 10,564.08, outperforming the Sensex.
The market breadth indicating the overall health of the market was quite strong with more than four gainers against every loser. On BSE, 901 shares gained and 194 shares fell. A total of 28 shares were unchanged.
Cairn India dropped 1.53% at Rs 212.25. Vedanta Resources Plc (Vedanta), the holding company of Cairn India with approximately 59.9% interest in the company on Friday, 27 March 2015 in a filing to the London Stock Exchange said that Cairn India, a subsidiary of Vedanta received an assessment order from the Indian Income Tax Department regarding a decision by the Government of India (GOI) in 2012 to amend the Indian Income Tax Act 1961 to impose retrospective tax on various prior transactions. In this respect, Vedanta's Board of Directors has instructed counsel to file a Notice of Claim against the GOI (Notice) under the UK-India bilateral investment treaty (the BIT) in order to protect its legal position and shareholder interests.
The Notice relates to the retrospective tax legislation passed by the GOI and a related tax demand made against Cairn India, an Indian company in which Vedanta has an approximate 59.9% interest.The tax demand is for an alleged failure to deduct withholding tax on alleged capital gains arising during 2006-07 in the hands of Cairn UK Holdings, Cairn India's erstwhile parent company, a subsidiary of Cairn Energy Plc. The sums demanded from Cairn India total Rs 20494.72 crore (equivalent to approximately $3.293 billion) comprising Rs 10247.36 crore of "tax", and the same amount again as "interest". If enforced, such tax demand would have serious consequences for Cairn India and therefore Vedanta's investment in Cairn India, the statement said. Vedanta understands that a parallel tax demand has also been made by the Indian Income Tax Department on Cairn UK Holdings, Vedanta said.
The Notice was served under, and is the first step required prior to the commencement of international arbitration pursuant to, the BIT. The BIT provides that the GOI is obliged, amongst other things, to accord fair and equitable treatment to investors and to provide full protection and security to investments. Vedanta and Cairn India have been advised by leading international counsel that the retrospective tax legislation passed is a violation of protections accorded to investors under the BIT and constitutes a serious impairment of the treaty rights of Vedanta, the statement said.
Vedanta and Cairn India will continue to take all necessary steps to protect their interest and the interest of their shareholders, the statement said.
Asian markets were higher today, 30 March 2015. Key indices in China, Hong Kong, Japan, Singapore, South Korea, Taiwan, and Indonesia were up 0.12% to 1.6%.
US stocks closed mildly higher on Friday, 27 March 2015, as investors digested Fed Chair Janet Yellen's remarks ahead of first quarter earnings in April.
Fed Chair Janet Yellen on Friday, 27 March 2015 reportedly said that she expects the Federal Reserve to raise interest rates this year, and that subsequent increases will be gradual without following a predictable path. Yellen and fellow policy makers generally anticipate that a rather gradual rise in the federal funds rate will be appropriate over the next few years.
US economic growth cooled in the fourth quarter as previously estimated, with businesses throttling back on inventory and equipment investment but robust consumer spending limiting the slowdown in the pace of activity. Gross domestic product (GDP) expanded at a 2.2% annual rate, unrevised from last month's forecast, the Commerce Department said on Friday, 27 March 2015, in its third estimate. The economy grew at a 5% rate in the third quarter.
In Europe, Greece's creditors are reportedly studying new reform plans put forward by Prime Minister Alexis Tsipras' government in a bid to secure further bailout funds.
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