FIIs Continue Selling Indian Markets On MAT Worries

Subscribe to GoodReturns
For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

    The sell figures of foreign funds has pushed Indian markets to almost three months lows and the Nifty below its 200 day moving average.

     FIIs Continue Selling Indian Markets On MAT Worries
    On Tuesday even when the markets recovered the sell figure from FIIs or foreign portfolio investors was a net Rs 1600 crores. In the previous day they sold a net of Rs 770 crores in the cash market. Take a look at the sell figure of FIIs in the last few days.

    April 28 - Rs 1600 Crores
    April 27 - Rs 770 Crores
    April 24 - Rs 84 Crores
    April 23- Rs 853 Crores
    April 22 - Rs 16253 Crores (buy)
    April 21 - Rs 1422 Crores
    April 20 - Rs 660 Crores

    If we see the figure of April 22, it should read a buy and not a sell figure. FIIs on this day bought a large sum in the cash markets from the sale of Daiichi stake in Sun Pharma. If we go further into April, we cannot see too much of net buy figures from FIIs in the cash market.

    MAT the real issue with FIIs

    As we write there are reports that a few foreign portfolio investors have come together to file a case in the court on the Minimum Alternate Tax (MAT) issue. In the Union Budget 2015, Finance Minister Arun Jaitley had decided to do away with MAT. But, that was only applicable for gains made from April 1, 2015 and only going forward. But FIIs would have to pay for gains made on the sale of shares in the previous years. Now, the government has slapped notices to foreign portfolio investors to pay money for the previous years.

    This again has been contentious and there have been earlier rulings. In any case, what is worrying these foreign funds is the fact that the government on the one hand says it is not pursuing an aggressive taxation policy and on the other hand there seems to be a lack of transparency. This has somehow created suspicions in the mind of foreign portfolio investors who have sold aggressively in the markets.

    When will they stop selling is hard to tell. The selling also maybe on account of the shift in allocation from India to the Chinese markets which are performing better. It may also be due to factors like a poor
    monsoon, poor corporate results and so on.

    GoodReturns.in

    Read more about: fiis mat
    Story first published: Wednesday, April 29, 2015, 8:42 [IST]
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more