Indian share markets open firm

Mon, 20 May 09:30 am

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Barring Taiwan (down 0.1%), the major Asian stock markets have opened the day on a positive note with stock markets in Japan (up 1.4%) and Hong Kong (up 1.7%) leading the gains. The Indian share markets indices have opened the day on a positive note. Barring healthcare, all sectoral indices have opened in the green with stocks in the FMCG and realty sector leading the gains.

The Sensex today is up by around 125 points (0.6%), while the NSE-Nifty is up by around 36 points (0.6%).The mid and small cap stocks have also opened in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.4% each. The rupee is trading at Rs 54.99 to the US dollar.

The stocks in the software sector have opened the day on a mixed note with Moser Baer India Ltd and Oracle Financial Services Ltd leading the gains. However, Wipro Ltd and Info Edge (India) Ltd have opened in the red. As per a leading financial daily, the income tax department has imposed a tax demand notice worth Rs 5.8 bn on Infosys Ltd for the fiscal year 2009.It is important to note here that Infosys is already contesting additional income tax demands of around Rs 11.8 bn for four fiscals years starting from 2005. The tax demand for these years is mainly on account of disallowance of a portion of the deduction claimed by the company under Section 10A of the Income Tax Act. The deductible amount is governed by the ratio of export turnover to total turnover. The disallowance is mainly on account of some expenses incurred in foreign currency that were reduced from export turnover, but not reduced from total turnover. As per the management, the company will take legal recourse against the fresh tax demand notice as well.

The stocks in the mining sector have opened the day on a positive note with Coal India and Metals and Minerals Trading Corporation (MMTC) leading the gains. As per a leading financial daily, the Government is planning to bring surplus coal produced in private captive coal mines under regulation. The proposed coal regulatory authority being set up aims to bring transparency in pricing and coal mining operations. It will also decide how to price coal produced in captive mines, apart from doing so for Coal India's linkage. The coal ministry has inserted a separate clause in the draft legislation covering captive mines. Post implementation, the new clause will bring under regulator's power a host of private companies including Tata Power, Reliance Power and Jindal Steel & Power. As per a coal ministry official, the price of coal produced by captive mines will be decided on the basis of the principles and methodologies for price determination as specified by the regulator. It will also form the basis for determining the price of coal declared as surplus and for calculation of royalty to state governments.