IT stocks lead gainers

Thu, 31 Mar 11:30 am

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The benchmark indices in the Indian stock market extended their gains on the back of buying interest in heavy weights across sectors during the last two hours of trade. All the sectors are trading in the positive except the automobile sector.

The BSE-Sensex is up by 152 points while NSE-Nifty is trading 42 points above yesterday's closing. BSE Midcap and BSE Small cap indices are up by 0.3% and 0.6% respectively. The rupee is trading at 44.67 to the US dollar.

Infrastructure stocks are trading mixed with Sobha Developers and Supreme Infrastructure trading in the green while Hindustan Construction Company and Pratibha Industries are trading weak. As per a leading financial daily, the Union Ministry of Environment and Forests (MoEF) has granted conditional permission to Lavasa Corporation, a subsidiary of Hindustan Construction Company (HCC) to complete the ongoing construction at its project site near Pune. The permission has been provided for constructing 257 buildings which are above the plinth level at its hill city. The ministry has taken this step in view of the investments already made and the effort of the petitioners.

It may be recalled that HCC and MoEF are engaged in a court battle due to environmental concerns over the former's ambitious hill city project. Lavasa in turn has withdrawn two of its petitions against the MoEF and is seeking an out-of-court settlement. But, the Bombay High Court has maintained status quo regarding stoppage of work at the site despite the withdrawal of the petition. According to Lavasa lawyer, the company has already lost Rs 3 bn because of work being stopped and the loss may cross another Rs 5 bn soon.

Auto stocks are trading weak led by M&M and Eicher Motors. As per a leading financial daily, the Andhra Pradesh High Court has asked Mahindra Satyam to pay Rs 3.5 bn to Central Board of Direct Taxes (CBDT). Mahindra Satyam has also been directed to provide an unconditional bank guarantee worth Rs 2.6 bn. This is a major setback for the company. It may be recalled that Mahindra Satyam had moved the high court last week seeking a stay on proceedings on a claim made by tax authorities for unpaid taxes to the tune of Rs 6.17 bn. IT department's claim is based on Rs 3.45 bn foreign tax credit availed by the former management of Satyam Computers. However, the present management claims that this is forged. On the other hand, the company's senior counsel has admitted that Mahindra Satyam does not have any proof other than Ramalinga Raju's confession letter to show that the foreign tax credits were fictitious. The Division Bench of the high court is not ready to consider this as evidence as Ramalinga Raju has not been found guilty yet. CBDT has been given time till April 20 for filing the counter. Currently, M&M is one of the biggest losers on the bourses.