Market Update: Bulls brought Market back on track, Nifty reclaims 11000 levels

Markets at a Glance:

There was a major turnaround in market sentiment today with Sensex climbing 835 points, while Nifty reclaiming 11000 level by gaining 244 points. Rally in US tech stocks, recovery in Asian markets, stable rating to India by S&P and fresh hopes about US stimulus package were among the major reason behind the market recovery.

All sectoral indices were in green with IT, Media and Auto sectors leading the rally.

Top Gainers/Losers:

Bulls were so aggressive that only 3 stocks viz. SBI Life, BPCL and UPL among Nifty’s 50 stocks were in red, while all other 47 were in green. Major winners were Bajaj Fin Serv, HCL Tech, Cipla, Bharti Airtel and L&T.

DII/FII Data:

DIIs kept their buying strategy in weak market by investing Rs.2070.63 crore, while FIIs drew Rs.2080.21 crore from the markets.

Harley-Davidson in talks with Hero Motocorp for distribution deal in India:

After its decision to shut the manufacturing plant as well as sales in India, Harley-Davidson is in advance talks with Hero Motocorp for a distribution deal. There are also rumours that Harley will allow Hero to manufacture at least one of its motorcycle with 300-600 cc engine capacity.

Such type of only distribution deals are not new to Indian market. Bajaj is already doing distribution of KTM bikes from long time in India.

Vodafone won retrospective tax case against India in ICJ, stock soars by 12%:

UK telecom major Vodafone won tax case against India over latter’s retrospective demand of Rs.20000 crore. The International Court of Justice (ICJ) at Hague ruled that conduct of Income Tax Department is in breach of ‘fair and equitable’ treatment.

ICJ further said that imposition of such retrospective tax on Vodafone is in breach of the investment treaty agreement between India and the Netherlands and ordered Indian government to pay Rs.40.3 crore as legal expenses to Vodafone.

The tax dispute is since 2007 when Vodafone acquired Hutchison Whampoa for 11 billion dollars. Indian government’s stand was, as Vodafone hadn’t deducted the tax at source (TDS) in this acquisition deal, hence it’s liable to pay Rs.20000 crore tax to income tax department.

In 2012, Vodafone won battle against Indian government over the same tax issue, but government nullified the court’s order by passing a law in parliament. After which Vodafone moved to ICJ in 2016.

S&P Affirms India’s ‘BBB-‘ / ‘A-3’ rating for long-term/short-term:

S&P Global Ratings today affirmed its ‘BBB-‘ long-term and ‘A-3’ short-term unsolicited foreign and local currency sovereign ratings on India.

The rating agency said that India’s economy will experience a record contraction in fiscal 2021 largely owing to the global Covid-19 pandemic, and it expects real GDP growth to recover from fiscal 2021 onwards, but warned that the country’s fiscal setting could deteriorate further this year.

It further added that stable outlook reflects the rating agency’s expectation that India’s economy will recover following the resolution of the Covid-19 pandemic, and that the country’s strong external settings will act as a buffer against financial strains despite elevated government funding needs over the next 24 months. Rating agency expect the economic activity in India to begin to normalize in fiscal 2022, resulting in real GDP growth of about 10 per cent.