Sensex hits 20500

MUMBAI: Equities continued to gain momentum as buying activity picked up across the board. Retail participation was seen in midcap stocks as broader markets outperformed the benchmarks. Analysts are advising caution at higher levels on account to low volumes trade.

At 10:10 am; Bombay Stock Exchange’s Sensex was at 20506.15, up 117.08 points or 0.57 per cent. The 30-share index touched a high of 20519.85 and low of 20412.76 in trade so far.

National Stock Exchange’s Nifty was at 6126.55, up 24.70 points or 0.40 per cent. The broader index touched a high of 6138.15 and low of 6103.55 intraday.

“Nifty is holding firmly above its short term 20 & 50-day moving average of 5964 & 6015 which is a very positive indication. However, the overall trend remains lackluster as the trading volumes are very low at higher levels.

Going forward it’s very important that the markets continue to witness follow-up buying above the 6100 levels for further positive development. Strong support for Nifty future is seen at 6070 and resistance is seen in the range of 6140 – 6180 levels where profit booking or fresh selling could emerge,” said Nirmal Bang report.

BSE Midcap Index was up 1.01 per cent and BSE Smallcap Index rose 1.15 per cent.

Amongst the sectoral indices, BSE Realty Index gained 1.73 per cent, BSE Capital Good Index moved 1.10 per cent higher and BSE Bankex advanced 0.93 per cent.

Jaiprakash Associates (3.01%), Reliance Communications (2.93%), Reliance Infrastructure (1.90%), DLF (1.83%) and Bajaj Auto (1.46%) were amongst the top Nifty gainers.

Sterlite Industries (-0.42%), Hero Honda (-0.38%), NTPC (-0.32%), Infosys Technologies (-0.25%) and ONGC (-0.10%) led the losers pack.

Market breadth was positive on the BSE with 1818 advances as compared to 618 declines.

Meanwhile, the Asian markets were mixed. Nikkei 225 was down 1.12 per cent and Strait Times was down 0.12 per cent. Taiwan Weighted was up 0.80 per cent and Seoul Composite edged 0.37 higher.

ET

Pranab Mukherjee to make big Budget change in direct tax laws

NEW DELHI: Saddled with huge tax arrears of Rs 2,50,000 crore -- more than half of the total tax collection projected for 2010-11 -- finance minister Pranab Mukherjee is likely to introduce in the forthcoming Budget some major changes in direct tax laws that could help in swift recovery of a significant portion of the arrears.

The changes proposed include reducing the limits to approach Income Tax Settlement Commission (ITSC), allowing those who have faced I-T raids to approach the commission even if the demand raised against them is not hefty.

Till last year, search cases were debarred from approaching the ITSC for settling their tax demand cases. The FM had in his 2010-11 Budget allowed these cases but the bar was kept at Rs 50 lakh and above, the tax demand raised. However, from this year, the government may reduce this and restore it to pre-2007 level of Rs 3 lakh in cases of search and survey cases and Rs 1 lakh for others.

Other changes proposed include measures to improve the functioning of the settlement mechanism under direct tax laws -- bringing all types of cases within the ambit of the ITSC and giving a security of tenure to the members of the commission. These changes may reflect in the forthcoming budget, sources said.

The matter was discussed by the FM in a pre-Budget review meeting with senior officials of the Central Board of Direct Taxes (CBDT) last week. The CBDT is working on the details to be incorporated in the Budget.

The FMs directive is to streamline the ITSC and make it a preferred mode of resolution for tax disputes, a senior CBDT official said. Mukherjee acknowledged the role of the settlement commission in reducing litigation with taxpayers and its potential for reducing tax arrears.

Out of the nearly Rs 2.50 lakh crore arrears, nearly Rs 99,000 crore is locked in tax disputes between the I-T department and taxpayers. The options were further squeezed when former FM P Chidambaram disempowered the ITSC in 2007 to take up search and survey cases.

Till March 31, 2010 the total arrears were Rs 2.30 lakh crore, and in the new fiscal year another Rs 20,000 crore has been added to this figure. Last year, the department had managed to recover nearly Rs 12,000 crore while the target set for this year has been fixed at Rs 14,000 crore.

To speed up the recovery process, the I-T department has circulated details of at least 550 high net worth individuals and entities -- who have willfully defaulted or have unpaid tax of Rs 25 crore and above -- to field officers for recovery, sources said. The tax arrears have doubled in the last two years to Rs 2.50 lakh crore, almost 66% of the total direct taxes collection of 2009-10.

Box
1. FM may modify tax laws to accommodate more I-T raid cases for settlement
2. Details of 550 high net worth willful defaulters put on priority
3. Dossiers have details of properties, bank transactions & investments
4. IT Officers have been asked to initiate attachment of assets if necessary
5. Individual Transaction Statement (ITS), special tool to help track related assets of defaulters


Read more: Pranab Mukherjee to make big Budget change in direct tax laws - The Times of India http://timesofindia.indiatimes.com/business/india-business/Pranab-Mukherjee-to-make-big-Budget-change-in-direct-tax-laws/articleshow/7187426.cms#ixzz19fGKMIuW

Sahara buys UK hotel for Rs 3,275cr

MUMBAI: In the first crossborder deal for the Indian hospitality sector this year and also the first one for Subrata Roy's Sahara India, the Lucknow-based financial services-to-real estate conglomerate has acquired UK's iconic Grosvenor House hotel for a knock-down price of £470 million (Rs 3,275 crore) from the Royal Bank of Scotland (RBS).

The UK has been a favourite shopping destination for Indian companies, with several well-known assets like Tetley and Typhoo in the tea category, Cuticura, Erasmic and Nulon in cosmetics and premier auto brands Jaguar & Land Rover having been snapped up.

The 494-room luxury property on London's Park Lane, which was once home to the Duke of Westminster, is Sahara India's second acquisition in the hospitality sector after its 2006 buyout of Sahara Star hotel, earlier known as Airport Centaur, in Mumbai.

"This acquisition is part of the major expansion plans of the group. In addition to the acquisition of Grosvenor House, London will be the gateway for Sahara to introduce some of its new business ventures internationally," said Subrata Roy Sahara, managing worker & chairman, Sahara Group.

RBS took over Grosvenor House in 2001 after Le Meridien collapsed into administrative receivership. The bank had been looking for a buyer for Grosvenor House for the last three years. At that time, the hotel was "valued for more than £1 billion." However, unfavourable economic conditions hit valuations hard. Roy said, "The valuation, even today, is quite high but due to a highly satisfactory due diligence by RBS and after long and strict negotiations, we have purchased it for £470 million."

Richard Lewczynski of Blandford Goldsmith put the deal together for Sahara India, which has acquired the property through Amby Valley Ltd. Grosvenor House, which has the largest banquet hall in London, is managed by the US-based Marriott International and is positioned as a JW Marriott hotel since September 2008. However, following the change in ownership, Sahara and Marriott will jointly manage the property.

The conglomerate plans to refurbish Grosvenor House by offering several facilities such as an Indian restaurant under the name Namak, a night club, swimming pool and spa.

When Subrata Roy took over Sahara Star, he gave the property a complete makeover. The five-star hotel boasts of being the world's largest pillar-less clear-tosky dome structure complemented by India's biggest marine aquarium.

Kaushik Vardharajan, MD of HVS, a global hospitality consultancy firm, said, "The US and European hospitality sector continues to be under pressure with low room occupancy levels and dropping tariffs. As a result, valuation of hotels has declined significantly. This helps companies like Sahara to acquire properties at a discount."

Vardharajan added that in terms of capital investment, it works out better to acquire hotels abroad at a discount compared to building one in India. The cash flows kicks in immediately in a running hotel compared to a greenfield one.


Read more: Sahara buys UK hotel for Rs 3,275cr - The Times of India http://timesofindia.indiatimes.com/business/india-business/Sahara-buys-UK-hotel-for-Rs-3275cr-/articleshow/7194258.cms#ixzz19fFq5GKi

Food inflation at 10-week high of 14.44%

NEW DELHI: Food inflation surged to a 10-week high of 14.44 per cent for the week ended December 18 as prices of vegetables, particularly onions, fruits, cereals and protein-based products, continued to escalate.

Food inflation stood at 12.13 per cent in the previous week. This is the fifth consecutive week when the rate of price rise of food items has increased.

However, food inflation is still far below the level of 21.19 per cent seen during the same week last year.

On an annual basis, onions became costlier by 39.66 per cent, whereas on a week-on-week basis, the increase was 3.49 per cent, government data released here shows.

The rate of price rise of vegetables was 29.26 per cent on an annual basis, while on a weekly basis, it was 4.58 per cent.

Fruits became 21.97 per cent more expensive, while milk grew 17.75 per cent costlier on a year-on-year basis during the week under review.

Similarly, eggs, meat and fish prices rose by 20.34 per cent on an annual basis.

Overall, the price of cereal declined marginally by 0.70 per cent year-on-year, while pulses fell by 10.79 per cent.

The price of rice went up marginally year-on-year, while wheat declined by 5.51 per cent.

On a weekly basis, however, the price of most items -- barring vegetables -- moved in a narrow range.

A good monsoon and prospects of a bountiful kharif harvest had prompted the government to exude confidence about a decline in food inflation.

However, after moderating for a few weeks in November, resurgent inflationary pressure has made all the government's calculations go haywire.

Unseasonal rainfall in Maharashtra, which resulted in damage to onion crops, saw prices of the staple vegetable soar by over Rs 80 per kg in mid-December. This prompted the government to ban exports of the product and also remove import duty to increase availability in the domestic market.

High food inflation could prompt the Reserve Bank to hike key short-term rates at its policy review next month.

RBI Deputy Governor Subir Gokarn had last week hinted that more tightening monetary measures were likely to be taken by the apex bank at its next policy review, as headline inflation is not easing as fast as the apex bank would like and the upside risks still remain high.

"Inflation is not easing as we would like it to be... Upside risks to inflation are still high," he had said.

Overall inflation for November was at 7.48 per cent, down from 8.58 per cent in the previous month.

Experts have said that the rise in food inflation is likely to have repercussions on the final WPI inflation figures for December.

Read more: Food inflation at 10-week high of 14.44% - The Times of India http://timesofindia.indiatimes.com/business/india-business/Food-inflation-at-10-week-high-of-1444/articleshow/7189620.cms#ixzz19alosIKL

Carrefour opens first cash and carry store in India

NEW DELHI: Retail giant Carrefour today announced its entry into the Indian market by opening its first cash and carry store for wholesale distribution.

The new store -- Carrefour Wholesale Cash&Carry -- in New Delhi will house over 10,000 stock keeping units and cater to professional businesses, institutions, restaurants and local retailers.

"The opening of this first store marks Carrefour's entry into the Indian market and will be followed shortly by the opening of other cash and carry stores," Carrefour, CEO, Lars Olofsson said in a statement.

He said opening of the first store was essential to allow the Carrefour teams to fully understand the specificities of the Indian market and further build the company's presence in other formats.

According to the statement, the development is in line with the group's strategy to be present in major emerging markets that offer significant expansion and medium and long- term growth opportunities.

Spread across 5,200 square metres, the store is located at Seelampur Metro Mall developed by Parsvnath Developers.

Read more: Carrefour opens first cash and carry store in India - The Times of India http://timesofindia.indiatimes.com/business/india-business/Carrefour-opens-first-cash-and-carry-store-in-India-/articleshow/7189921.cms#ixzz19am2ZAHj