Indian shares rose modestly on Monday, reversing early losses amid a weak trend in global markets, after finance minister Pranab Mukherjee deferred applying the General Anti-Avoidance Rules (GAAR) by one year until fiscal 2013/14.
The government would not use retro amendments on cases where assessment has been final and the proposed amendments will not override double taxation avoidance agreements, that India has with other countries, Mukherjee told Parliament today, perking up sentiment in the afternoon session. The burden of proving tax evasion has also been shifted to the authorities from the tax payer.
The rupee strengthened against the dollar after falling to a near six-month low against the dollar early in the session, thanks to suspected RBI intervention and clarification on the GAAR issue related to FII taxation.
The benchmark 30-share Sensex recovered more than 300 points from the day's lows to end up 82 points or 0.48 percent at 16,913, with 19 of its stocks advancing. State-run power equipment major BHEL topped the buying list, climbing over 6 percent, engineering & construction giant Larsen & Toubro jumped 4.8 percent on fresh buying interest and property developer DLF rallied 4.3 percent.
Automakers such as Tata Motors and Maruti Suzuki rose over 2 percent each, metal stocks like Sterlite and Tata Steel added 1-2 percent, lenders ICICI Bank and SBI rose around 1.6 percent each, telecom major Bharti Airtel gained 0.9 percent and state-run oil explorer ONGC ended up 0.7 percent.
HDFC rose 0.6 percent after the nation's largest mortgage lender reported a 16 percent rise in quarterly profit, beating estimates.
The broader Nifty index rose by 27 points or 0.54 percent to 5,114, while the BSE mid-cap and small-cap indexes ended up 0.5 percent and 0.3 percent, respectively.
Shares of state-run oil retailers soared, with HPCL, IOC and BPCL rallying 3-5 percent as U.S. crude futures plunged about 8 percent in the past three trading sessions on signs oil demand may be weaker than previously expected. However, shares of oil & gas producer Reliance Industries fell 1.5 percent and those of Cairn India lost 2.6 percent.
Andhra Bank rallied 3.7 percent after announcing better-than-expected fourth-quarter results. Titan Industries jumped 3.5 percent after the government announced a roll back of the excise levy on both branded and unbranded jewelery.
Jaiprakash Associates fell 2.3 percent on news that the Himachal Pradesh High Court has fined the company Rs 100 crore for violating environmental laws.
Elsewhere in Asia, key benchmark indexes in Australia, Hong Kong, Japan, Singapore and Taiwan fell over 2 percent each, as a weak lead from Wall Street following disappointing U.S. nonfarm jobs data and a public backlash against unpopular budget tightening and austerity measures of ruling governments in France and Greece spooked investors.
Socialist Francois Hollande, who is opposed to austerity measures, defeated incumbent Nicholas Sarkozy in the French presidential run-off election Sunday and voters punished pro-bailout ruling parties in Greece, intensifying worries about Europe's still unresolved debt crisis.
European stocks were trading off their day's lows and trading in the U.S. index futures point to a moderately lower opening.
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