11 May 2016


Our prediction in LAST post of today’s top gainer “AXIS BANK” comes true.
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Pre-market news of Indian Government’s amendment to the prolonged tax treaty with Mauritius led to an expected panic selling in the Indian markets at the first tick itself. Both Nifty and SENSEX opened with a gap-down of 83 and 224 points, respectively. 
However the sell-off was news based; and other terms explained in the treaty were favorable, which resulted in the recovery. Currently markets are trading flat, where Nifty hit above its previous close at 7889; while SENSEX remains flat to negative at 25755. 
Mauritius treaty has announced imposing capital gain tax on sale of domestic shares by entities based in Mauritius at 50 per cent of the rate prevailing for domestic investors. The 33 year prolonged treaty was passed today to avoid tax avoidance and other practices. However, the regime has been applied on shares bought on or after April 2017 with transition period of up to 31 March 2019. The good thing about this tax treaty is that it's not retrospective in terms of the applicability of the taxes and this is what has assuaged negative sentiment in the market.
The BSE Sensex ended with a loss of 176 points at 25597. The BSE Sensex opened at 25549 touched an intra-day high of 25762 and low of 25409.
The NSE Nifty closed with a loss of 39 points at 7848. The NSE Nifty opened at 7805 hitting a high of 7893 and low of 7781.
For Wednesday we are expecting some good movement from the market we need to watch out for the levels between 7850 - 7895 to begin with on the upside if the Nifty manages to stay above this range we would see it moving up further. In that case, the next range to monitor would be between 7935 and 7965—this is formidable resistance zone once crossed firmly would see the Nifty scaling up to the zone between 8000 and 8050  and beyond that 8100. Level 7770 will be proved as very good supporting level for Nifty, .If once it go to 7770 then there will higher probability for Nifty to touch 7750-7730 level once again.
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RESISTANCE: 7850, 7900, 7950
SUPPORT:  7800, 7750, 7700

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