MAT Decision May Support Sensex Amid Global Selloff

BSE Sensex and Nifty are likely to open flat despite a fresh round of selloff in global markets. The tax relief announced for foreign investors on the controversial minimum alternative tax (MAT) may support the Indian markets. SGX Nifty was up 0.22 per cent, indicating a slightly higher opening for Indian markets. Here are top 10 developments 1) The government last evening announced the waiver of imposition of a minimum alternative tax (MAT) on foreign funds for the period prior to April 1, 2015. 2) Finance Minister Arun Jaitley said the government had accepted the recommendations of a panel set up to examine the issue, and said he would make the change permanent through legislation in the next Parliament session. 3) Mr Jaitley said that pending the change in the income tax law, a notice would be circulated to tax officers ordering them not to issue any more claims under the levy known as MAT. 4) The government's announcement comes in the wake of record selling from foreign investors last month. In August, foreign investors sold shares worth Rs 16,877 crore, a record. Yesterday, foreign investors sold stocks worth Rs 675.32 crore. The selloff by foreign investors has been attributed to the possibility of a rate hike in the US later this month and concerns over global growth. 5) Asian shares were mostly lower today after weak manufacturing activity reports from both the US and China sent Wall Street reeling overnight. The head of the International Monetary Fund said yesterday global growth is likely to be weaker than expected due to a slower recovery in advanced economies and a further slowdown in emerging nations. 6) On Wall Street on Tuesday, US stocks fell nearly 3 per cent, with all three major US equity indexes solidly in negative territory for the year so far. 7) Markets in China were down nearly 3 per cent, further weighing on the Asian markets. Analysts say rising concerns of a deep-seated slowdown in China, the world's second biggest economy, is weighing on global stocks. 8) China's giant manufacturing sector contracted at the fastest pace in three years in August, trigger a fresh round of global selloff. Even China's services sector, which has been one of the few bright spots in the sputtering economy, showed alarming signs of cooling. 9) Weak economic data in India did not help matters with Sensex falling nearly 600 points yesterday. Growth in core sector, which contributes nearly 40 per cent to industrial output, slowed to a 3-month low, while June quarter GDP grew below estimates at 7 per cent.) 10) A delay in recovery in corporate earnings has led Macquarie, Barclays and Ambit to downgrade Indian shares over the last few days. The series of downgrades has hurt sentiments, traders say.

MAT Decision May Support Sensex Amid Global Selloff

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