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Global slide, rupee dent domestic indices; Sensex down by over 800 points

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Sensex down

Mumbai, Oct 11: A massive slide in global stock markets, along with a weak rupee plunged the key domestic equity indices during the morning trade session on Thursday.

According to market observers, the slide in the US and Asian markets eroded investors’ risk-taking appetite and at one point plunged the barometer S&P BSE Sensex by over 1,000 points.

In addition, the Indian currency plummeted to a new low of 74.48 to a USD on Thursday morning.

Heavy selling pressure was witnessed in banking, metals, automobile, IT and capital goods stocks. All 19 sector based indices of the S&P BSE traded in the red.

At 11.00 a.m., the broader Nifty50 of the National Stock Exchange traded at 10,198.35 points, down 261.75 points or 2.50 per cent from its Wednesday’s close.

The S&P BSE Sensex, which had opened at 34,063.82 points, traded at 33923.45 points, down 837.44 points or 2.41 per cent.

So far, the Sensex has touched an intra-day high of 34,063.82 points and a low of 33,723.53 points.

“We started with a strong selling due to a weak Asian market given sharp fall in the US market yesterday, fearing that rising interest rates and trade tension is going to impact company’s profitability,” Vinod Nair, Head of Research, Geojit Financial Services, told IANS.

On Thursday, Asian indices were showing a negative trend. Japan’s Nikkei 225 was quoting in red, down by 4.37 per cent while Hang Seng was down by 3.95 per cent, South Korea’s Kospi was also down by 3.63 per cent.

China’s Shanghai Composite index was trading in red, down by 4.74 per cent.

Overnight, Nasdaq closed in red, down by 4.26 per cent while FTSE 100 was also down by 1.29 per cent at the closing on Wednesday.

“IT, banks, realty and metal stocks have fallen the most, while Oil and gas and media stocks have fallen the least. Nifty seems to be in a temporary bottom formation stage which could last a few more days,” HDFC Securities Head of Retail Research Deepak Jasani said.

In terms of currency, the Indian rupee slipped to a fresh record low of 74.48 to a US dollar on Thursday morning after it opened at 74.31 to a dollar at the Inter-Bank Foreign Exchange Market from its previous close of 74.22 (74.2175).

IANS

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Oil Ministry yet to recover $510 mn from contractors under PSC: CAG

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Dharmendra Pradhan

New Delhi, Sep 23 : The Comptroller and Auditor General (CAG) has said that the Ministry of Petroleum and Natural Gas has not recovered $510 million as cost of unfinished minimum work programme (CoUMWP) from contractors in respect of 45 blocks.

The CAG report on Union Government (Economic & Service Ministries-Civil) – Compliance Audit Observations, which includes important audit findings, was presented in the Parliament on Wednesday.

It noted that the government awarded 254 blocks during the New Exploration and Licensing Policy’s (NELP) I to IX rounds for exploration of oil and gas. As per the terms and conditions of Production Sharing Contracts (PSC), contractors are required to pay the cost of unfinished minimum work programme, if the block is relinquished or terminated by government.

However, contractors of 54 relinquished blocks failed to pay the CoUMWP as specified in the PSCs.

“An amount of $510.79 million (Rs 3,652.64 crore), which was 77 per cent of the Ministry of Petroleum and Natural Gas’s (MoPNG) approved amount of $664.67 million (Rs 4,753.03 crore) on account of CoUMWP in respect of 45 blocks still remained unrecovered (September 2019),” the report said.

It added that the CoUMWP for nine blocks is yet to be worked out by Directorate General of Hydrocarbons (DGH) or yet to be approved by the ministry.

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IT Dept ignored land/flat sellers as ‘potential assessees’: CAG

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real estate

New Delhi, Sep 23 : The Comptroller and Auditor General (CAG) has said that during financial years 2014-15 to 2017-18, the IT Department did not initiate any action regarding land and flat sellers who could be potential assessees.

The Performance Audit on ‘Search and Seizure Assessments in Income Tax Department’, tabled in the Parliament on Wednesday, said: “The Department did not initiate any action in respect of sellers of land/flat/ commodities pointed out in the respective Appraisal Report, who could be potential assessees. The department also did not confirm whether these were in the tax net of the department and regularly filing returns.”

It also said that there were loopholes and deficiencies in the provisions of the Act in respect of search assessments, mainly relating to absence of specific provisions in the Act and Rules, the report said.

“In respect of certain Groups, 76.5 per cent of additions made in search assessments did not stand the test of judicial scrutiny in appeals at the level of CIT (A)/ITAT,” it said.

The report found that assessing officers (AOs), while finalising the assessments, did not take a uniform stand in making additions on account of bogus purchases, accommodation entries and in adoption of figures of assessed income or revised income.

“The additions were made arbitrarily either on lump sum amount basis or different percentage ranging from five per cent to 50 per cent under similar circumstances without proper justification,” the report said.

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IT Dept computed interests wrongly in most assessment cases: CAG

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Direct tax Incom

New Delhi, Sep 23 : The Comptroller and Auditor General of India has said that the Income Tax Department computed interests wrongly in about 77 per cent of the assessment cases it had audited.

In its report on “Direct Taxes of the Union Government for the year ended March 2019”, tabled in the Parliament on Wednesday, the government auditor said that it had audited 6,217 assessment cases which were processed or completed through the AST module and examined the correctness of interest, calculated through the system and modified by assessing officers (AO) with respect to Sections 234A, 234B, 234C and 244A of the Income Tax Act.

The report said that interest was calculated incorrectly through the AST system, despite the fact that the system was designed, inter alia, to undertake assessment functions of calculation of interest under various sections of the Income Tax Act.

“The interest was wrongly computed by the ITD, in 76.68 per cent of cases of the sample of 6,217 selected out of a population of 8,35,727 records, either due to systemic deficiencies or due to incorrect interventions by the AOs,” it said.

Assessing officers also did not take any step to rectify the incorrect interest, under Sections 234A, 234B, 234C and 244A of the Act, calculated through the system, even though the AST system allowed them to modify the value of interest in accordance with the provisions of the Act, thereby leading to either short levy excess levy of interest.

The CAG recommended that the Central Board of Direct Taxies may institute appropriate checks and balances in the Income Tax Business Application (ITBA) to prevent recurrence of error in computation of tax and interest.

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