After trading in the negative territory during post noon trading session, the Indian equity markets closed the day in the red. While the BSE Sensex today closed lower by 35 points, the NSE-Nifty closed lower by 20 points. Midcaps and Smallcaps too closed on a weak note today. While the BSE Mid Cap index closed lower by 0.18%, the BSE Small Cap index was lower by 0.14%. Realty stocks were the biggest losers today. The BSE Realty Index lost 9%.
As regards global markets, Asian indices closed mixed today. The rupee was trading at Rs 61.39 to the dollar at the time of writing.
Real Estate stocks ended the day on a weak note. DLF and Unitech were the biggest losers today. The stock of DLF cracked in excess of 25% in a single trading session today after market regulator SEBI banned the company from accessing capital market for 3 years. The ban has come from failing to disclose certain material information in its prospectus when the company came out with its IPO in 2007. The company was accused of cheating a person in land transaction. Subsequently, there was an FIR against the company and its key executives. The company chose to not disclose this matter in its prospectus. This has resulted in a ban by SEBI. We reckon such moves will tighten governance disclosures in India.
With signs of economic revival being on the anvil the government has decided to defer the roll out of GAAR. Basically, these rules were aimed to avoid tax evasion. However, many foreign investors were apprehensive with introduction of GAAR as such rules dampen investor sentiment. It gives government the power to deny any deal where it sees a deliberate attempt has been made to avoid taxes. With investor sentiment riding high the Modi government has decided to defer the implementation of GAAR. This may further attract investor interest into India.