Market surge unabated; Infosys faces 30,000 cr. tax demand

The market continues its surge. Bullish investors are hopeful that the Nifty 50 index will surpass 25,000 today.

The US Federal Reserve's decision to maintain current interest rates while hinting at potential cuts in September has boosted market sentiment. Fed Chair Jerome Powell indicated that interest rates might be reduced if inflation remains low. Consequently, the dollar dipped slightly, gold prices increased, and the yield on 10-year US Treasury bonds fell to 4.05%.

Tensions in the Middle East escalated after Israeli intelligence agents assassinated a Hamas leader in Tehran, Iran. This incident has fueled fears of conflict in the region, pushing crude oil prices up by more than 2.5%. However, there is no immediate indication that Hamas or Iran will retaliate significantly.

Infosys Technologies received a ₹32,000 crore GST notice, which the market may not take too seriously as the company claims no liability. The company asserts that it has paid all taxes due and highlights that GST does not apply to exports.

In the derivatives market, Gift Nifty closed at 25,088 on Wednesday night and rose to 25,110 this morning, indicating a positive start for the Indian market today.

Global markets

European markets ended with strong gains on Wednesday. Dutch microchip maker ASML's stock surged by 10% following the removal of export restrictions. Retail inflation in the Eurozone rose to 26% in July.

US markets also saw significant gains on Wednesday. Despite a notable slowdown in job growth last month, the market remained optimistic, possibly due to expectations of interest rate cuts. Before the Fed's monetary policy announcement, the Dow Jones closed 360 points lower but still ended the day with a half percent gain at 41,200, marking a 4% monthly gain. The S&P achieved a 1% monthly gain, while the Nasdaq's monthly loss was just under 1%.

Tech stocks, including Nvidia, saw substantial gains yesterday, with Nvidia rising by 13%.

On Wednesday, the Dow Jones index rose by 99.46 points (0.24%) to close at 40,842.79. The S&P 500 surged by 85.86 points (1.58%) to close at 5,522.30, and the Nasdaq gained 451.98 points (2.64%) to close at 17,599.40.

US futures are on the rise. The Dow is up 0.18%, the S&P 0.53%, and the Nasdaq 0.84%.

Post-market, Meta Platforms reported better-than-expected second-quarter results, driving its stock up by 7%. The company expects significant growth in profit and revenue in the third quarter. Apple and Amazon will release their second-quarter results today.

Asian markets are showing mixed trends this morning. Japan's Nikkei fell by 3%, while markets in South Korea and Australia rose.

Indian markets

Despite foreign investors continuing to sell, the Indian market surged yesterday, with the Nifty closing above 24,900 for the first time. Expectations are high that it will surpass 25,000 today, supported by the US Fed's decision. Yesterday, the Sensex rose to 81,828 and the Nifty to 24,984.60 before closing slightly lower.

The Sensex closed up by 285.94 points (0.35%) at 81,741.34, and the Nifty increased by 93.85 points (0.38%) to close at 24,951.15. The Bank Nifty closed up by 0.11% (54.10 points) at 51,553.40. The Mid Cap index rose by 0.63% to close at 58,990.90, while the Small Cap index fell by 0.36% to 19,137.65.

Foreign investors sold shares worth ₹3,462.36 crore in the cash market, while domestic funds and institutions bought shares worth ₹3,366.51 crore.

Despite the pressure from profit-booking, the market is widely expected to achieve the 25,000 mark today. The Nifty index has support at 24,910 and 24,860, with resistance at 24,990 and 25,050.

Infosys gets ₹32,000 cr. tax notice

Infosys Technologies has received a ₹32,000 crore tax notice from the GST department, alleging tax evasion. The notice states that GST should be paid on funds received from foreign branches under the reverse charge mechanism for the period from 2017-22. Infosys claims it has paid all due taxes and argues that GST does not apply to exports. The company’s former director, Mohandas Pai, described the notice as tax terrorism, as the demanded amount equals the company’s annual profit.

Gold soars again

Gold prices surged after the US Fed indicated potential rate cuts in its next meeting. Gold prices increased by more than 1.5%, reaching close to $2,450 per ounce before slightly dropping to close at $2,448.30. December holiday prices peaked at $2,497. The market predicts further increases, with an average price forecast of $2,700 next year.

In Kerala, gold prices rose by ₹640 per sovereign to reach ₹51,200 yesterday, with further increases expected today.

Silver prices also rose to $29 per ounce. In Kerala, silver continued at ₹89,000 per kilogram.

The dollar index closed at 104.10 on Wednesday, falling to 103.99 this morning.

The rupee made a slight gain yesterday, closing at ₹83.72 per dollar, up by one paisa.

Fears of conflict in the Middle East have driven crude oil prices up again. Brent crude rose by 2.7% to close at $80.72, with prices this morning at $80.6. WTI crude is at $78.60, and UAE's Murban crude is at $80.57.

The US Fed's decision has rejuvenated industrial metals. After weeks of declines, metal prices have rebounded. Copper surged by 3.33% to $9,102.13 per tonne, aluminium rose by 2.95% to $2,290.20, tin by 4.24%, and nickel by 2.89%.

Cryptocurrencies remain relatively stable. Bitcoin is around $64,700, and Ether is at $3,235.

Market Indicators (July 31, 2024, Wednesday)

• Sensex 30: 81,741.34 (+0.35%)
• Nifty 50: 24,951.15 (+0.38%)
• Bank Nifty: 51,553.40 (+0.11%)
• Mid Cap 100: 58,990.90 (+0.63%)
• Small Cap 100: 19,137.65 (-0.36%)
• Dow Jones 30: 40,842.79 (+0.24%)
• S&P 500: 5,522.30 (+1.58%)
• Nasdaq: 17,599.40 (+2.64%)
• Dollar ($): ₹83.72 (-₹0.01)
• Dollar Index: 104.02 (-0.53)
• Gold (ounce): $2,448.30 (+$36.90)
• Gold (sovereign): ₹51,200 (+₹640)
• Crude (Brent) Oil: $80.72 (+$2.09)