Indian markets remain lackluster

Mon, 11 Feb 01:30 pm

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Indian stock markets recovered some losses in last two hours of trade, though they hovered around the dotted line. Amongst the sectors, capital goods and IT stocks witnessed maximum selling pressure, while realty and healthcare stocks led the pack of gainers.

BSE-Sensex is down by 11 points and NSE-Nifty is trading down by 5 points. While BSE Mid Cap is trading down by 0.2%, BSE Small Cap index is trading up by 0.01%. The rupee is trading at 53.68 to the US dollar.

Most of the aluminum stocks are trading in green with Sterlite Industries Ltd and Hindalco being the top gainers. As per a financial daily, Novelis, which is a subsidiary of Hindalco, is set to get a notice from income tax (IT) department. The notice is pertaining to transfer pricing tax on the fees earned for providing corporate guarantees to the foreign banks that had given loans to its subsidiary AV Minerals at Netherlands. Reportedly, as of now no tax demand has yet been made on Hindalco, however the same could be expected in next couple of weeks. The final order on Hindalco will depend on various aspects, including whether only a letter of comfort was issued or actual corporate guarantee was given. This would be the second notice to the company from the income tax department. Earlier in 2008-09 too, the company had received notice from the IT department pertaining to transfer pricing order. Hindalco had filed an appeal for the same. Recently, the IT department had also served similar type of notice and made a tax demand on Shell Global, for undervaluing its Indian subsidiary while making fresh investments into it. Hindalco is trading up by 1.32%

Textile stocks are trading mixed with Vardhaman Holdings and Welspun India leading in gains and Eastern Silk and Bombay Dyeing being the major losers. As per a leading financial daily, Arvind's subsidiary Arvind Life Style Brands has entered into a licensing agreement with Hanesbrands Inc. to market and sell basic and intimate apparel in the country under the Hanes and Wonderbra brands. The Hanes brand, which has a 100-year old history, is present in high quality underwear, intimates, casual wear, hosiery and socks. Through the agreement, Arvind has acquired the Hanes Brand India operations and plans to increase the Hanes point of sales from 5,000 to 15,000 over the next three years. Reportedly, the company plans to grow the revenues from the Hanes vertical to the tune of Rs 5 bn over the next four years. Arvind stock is currently 1.9% up.