Indian equity markets reacted with acute volatility to the ongoing Greek debt crisis. Assurances from the RBI Governor, Mr. Raghuram Rajan, that the Greek default on IMF loan and the upcoming referendum are unlikely to influence India, seemed to have an impact on Dalal Street as traders remained buoyant about Indian markets. The equity markets saw a third consecutive weekly advance and ended at a two-month high on Friday, 3 July 2015. The 30-scrip sensitive index, S&P BSE Sensex ended the week in green and rode over the crucial 28k level to close at 28,092.79 points. This is a gain of 280.95 points or 1.01 per cent over the previous weekly close at 27,811.84 points. The other key index, the CNX Nifty with 50 stocks, ended at 8,484.90 points, an addition of 103.8 points or 1.23 per cent to last week’s closing level at 8,381.10 points.
This week, the BSE small-cap index gained about 1.45 per cent while the mid-cap index added about 1.30 per cent. A strong buying trend by domestic investors and a hearty monsoon were key reasons for the indices to move up despite the anxiety. Market experts advise retail investors to remain cautious and refrain from speculation in the coming weeks. The outcome of the Greek referendum and the movements of major global markets will influence the indices. Banking and infrastructure stocks did well this week. Top gainers at the Sensex this week include BHEL, Cipla, Tata Motors, TCS, Infosys, Vedanta and Bharti Airtel.
After three dampening days of trading, the precious yellow metal closed on Friday at the bullion market at a price of INR 26,500 per 10 grams. Jewellers seem to be moderately keen on buying at existing levels but traders feel that in the coming weeks gold may dip below the 26000 mark. In contrast to gold’s subdued movement, demand for silver rose among industrial units and coin makers pushing prices up to INR 36,000 per kg on Friday. Weekly-based delivery for Silver also rose to INR 35,500 per kg (addition of INR 320).
Airbus and Mahindra Bid to Build Military Helicopters
Renowned European aircraft manufacturer, Airbus, has tied up with India’s Mahindra Group in an effort to compete for a large order for military helicopters that is soon likely to come from the country’s armed forces. PM Narenda Modi’s dual focus on upgrading the machinery and equipment available with the defence forces and boosting indigenous manufacturing capabilities to meet defence requirements makes this joint venture well poised to be a leading contender. Over the past few months, Airbus Helicopters had been holding talks with several Indian companies including the Tata Group and Reliance Industries before settling on Mahindra Defence Systems as the ideal partner. The Indian Navy alone is in need of 100 utility helicopters. Apart from this, there has been a high demand for transport helicopters in the Indian Air Force and Indian Army to replace aging units. The JV shall find other Indian companies such as Hindustan Aeronautics Limited and Textron to be its primary rivals in its efforts to secure the contract.
BSNL Launches New Mobile Wallet
The Bharat Sanchar Nigam Ltd. (BSNL) introduced its new mobile wallet service, Speed Pay. Speed Pay is likely to allow BSNL customers to conduct transactions such as transfer of money, bill payment, and even cash withdrawal through a prepaid card linked to the wallet. The cash withdrawal limit through this mobile wallet service has been capped at INR 1 lakh. This service has been launched by BSNL in partnership with Pyro, a technology-based solutions company. BSNL has also tied up with Andhra Bank and Corporation Bank and talks with Bank of India and Punjab National Bank regarding tie-up are underway. The service shall be available in three southern states – Tamil Nadu, Karnataka and Andhra Pradesh in September before it is launched in the rest of the country. The Pyro debit card that comes with the mobile wallet is enabled by Visa and shall be accepted as an ordinary debit card at all points of sales accepting Visa cards.
SnapDeal Sells Penthouse Worth INR 6 Crore
In what is now being deemed the biggest ever apartment sale in India till date, e-commerce site Snapdeal has sold a Bengaluru penthouse to a person called Poornima for INR 6 crore. Apart from garments, fashion products, and household products and FMCG goods, Snapdeal has been selling houses and apartments since August 2014 and has enlisted a number of top real estate sellers such as Tata Housing. The category has seen a growth of about 400 per cent since it was launched, says the website. The INR 6 crore project was sold by Mantri Developers.
New Tax Penalty Laws
This week, the new Undisclosed Foreign Income and Assets and Imposition of Tax Act, 2015 came into effect. On 1 July 2015, the new act dealing with black money and undeclared assets became effective and so did the compliance window for the law. The act requires all undisclosed assets, especially property and shares held overseas, to be disclosed in a prescribed format within 90 days. The current market prices for these assets shall be considered to calculate tax and penalty. After this three-month period, any income or assets discovered by the IT department shall attract a combined tax and penalty of up to 120 per cent. The government said that this compliance opportunity shall, however, not be offered in cases when hidden assets and black money have already been discovered by the IT department. Evaders may find themselves sentenced to a maximum of 10 years rigorous imprisonment for tax evasion under the new law.