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Indian indices are trading on a flattish note in the post-noon trading session. Sectoral indices are trading on a mixed note with stocks from the auto and realty sectors leading the gains. Telecom and healthcare stocks are however trading in the red.
The BSE Sensex is trading down by 58 points (down 0.2%) and the NSE Nifty is trading down 6 points (down 0.1%). The BSE Mid Cap index is trading flat while the BSE Small Cap index is trading down by 0.2%. Gold prices, per 10 grams, are trading at Rs 28,635 levels. Silver price, per kilogram is trading at Rs 38,720 levels. Crude oil is trading at Rs 3,338 per barrel. The rupee is trading at 67.24 to the US$.
As per an article in Economic Times, the government has rolled back its Budget decision to apply 1% tax collection at source (TCS) on cash purchases of gold jewellery of Rs 2 lakh and above. Further, it has also raised the threshold to the earlier Rs 5 lakh with effect from June 1.
The development is likely to boost demand for gold jewellery and has led to a buzz in the gold and jewellery stocks today.
The above decision follows Finance Minister Arun Jaitley's proposal for 1% excise tax on non- silver jewellery. This announcement sparked a nationwide strike of 45 days by jewelers that ended unsuccessfully in mid-April.
TCS was introduced as a measure to curb tax evasion and check black money transaction in India. In 2012, TCS of 1% was imposed on cash purchase of jewellery worth Rs 5 lakh or more and of bullion worth Rs 2 lakh or more. The government in this year's budget had reduced the TCS threshold on jewellery to Rs 2 lakh.
The company expects its newly acquired branded drug business in Japan to contribute to revenue from second half of FY17. The guidance also takes into account continued impact of remedial measures at Halol plant and gains from sale of anti-leukemia drug Gleevec for which it has 180-day exclusivity.
Furthermore, the company will focus on building specialty business in the US and this may see a short term impact on its profitability. It is also going to increase spend on research and development to around 9% of sales.
On a separate note, the company's US subsidiary Sun Pharmaceutical Industries Inc (SPII), has received a grand jury subpoena from the anti-trust division of the US Department of Justice seeking documents from the company and its affiliates (subscription required). The subpoena is pertaining to corporate and employee records, generic products and pricing, communications with competitors and others regarding the sale of generic pharmaceutical products. The company is responding to the Justice Department's subpoena, and reportedly the outcome of the inquiry is unlikely to have any adverse material impact on operations or financial results.
Presently the stock of Sun Pharmaceuticals is trading down by 5.9%.
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