Tax demands hit Zomato and Vedanta, Dr. Reddy’s acquires Edity Therapeutics

Opening Bell:

Gift Nifty is down by 27.0 points in the early morning trade, indicating a negative opening for Indian stock market.

Asia-Pacific markets closed lower on the final trading day of 2023, except for China’s tech stocks, which continued to rise. Xiaomi revealed plans to enter the electric-vehicle market, causing its Hong Kong shares to drop over 4%. The Hang Seng slipped by 0.20%, while China’s CSI 300 edged up by 0.49% to 3,431.11. Despite a recent rally, China and Hong Kong indexes are set to be the biggest losers for the year among major Asia-Pacific markets, with the CSI 300 down by 11.8% and the Hang Seng plunging by 14%. Japan’s Nikkei 225 closed slightly lower but finished the year as Asia’s top-performing market, gaining over 28%. South Korea and Australia markets ended with solid gains for the year.

The US stock market closed slightly down on Friday, the final trading day of 2023, pulled by real estate stocks. Despite this, the S&P 500, the Dow, and the Nasdaq marked nine consecutive weeks of gains, the S&P 500’s longest winning streak since January 2004, showing double-digit growth. On December 29, the Dow Jones Industrial Average slipped 0.05%, the S&P 500 dropped 0.28%, and the Nasdaq Composite finished 0.56% lower.

European stocks closed Friday’s session positively, wrapping up a robust year with the Stoxx 600 index rising 12.64%. This contrasts with a 12.9% drop in 2022. On the day, the Stoxx ended 0.1% higher across most sectors in light trading. London markets closed early, seeing the FTSE 100 in positive territory while the FTSE 250 dipped.

Stocks News:

👉 Zomato: The company has received three orders from the sales tax officer, Delhi, and deputy commissioner, Bengaluru, alleging short payment of GST along with applicable interest and penalty under the Central Goods and Services Tax, totalling ₹4.24 crore. These orders are for financial year 2018.

👉 Vedanta: The company has received 2 orders worth Rs 48.82 crore, along with applicable interest and penalty of 10% of the GST demand, from the additional commissioner, GST and Central Excise Commissionerate, confirming the demand for GST input tax credit availed during FY 2017-18 and FY 2018-19 on account of interpretational issues in terms of relevant provisions of the Central Goods and Services Tax Act.

👉 Dr Reddy’s Laboratories: The step-down subsidiary Dr Reddy’s Laboratories has acquired a 6.46% stake in Israel’s Edity Therapeutics Ltd for $2 million. Separately, the company has received an order from GST authorities towards tax demand, including interest and penalty.

👉 Torrent Power: Has incorporation wholly-owned subsidiary Torrent Green Hydrogen Private Ltd. The newly incorporated entity will manufacture, assemble, purchase, purify, store, transport, experiment with, the supply, trade and generally deal in hydrogen, its by-products and/or its derivatives like ammonia, chemicals, compressed natural gas and mineral substances.

👉 Foreign institutional investors (FIIs) bought shares worth Rs 1,459.12 crore, while domestic institutional investors (DIIs) purchased Rs 554.39 crore worth of stocks on December 29, provisional data from the NSE showed. 

Domestic and International Events

• In December, Foreign Portfolio Investors (FPIs) purchased Indian equities worth ₹66,135 crore. When including debt, hybrid, debt-VRR, and equities, the total inflow reached ₹84,537 crore, as per National Securities Depository Ltd (NSDL) data. Analysts noted FPIs showed strong interest in financial services stocks. Throughout 2023, FPIs accumulated Indian equities valued at ₹1.71 lakh crore.

• Retail inflation for industrial workers increased marginally to 4.98% in November compared to 4.45% in October this year, mainly due to higher prices of certain food items. Food inflation stood at 7.95 per cent against 6.27% in the previous month (October 2023) and 4.30% during the corresponding month (November 2022) a year ago, a labour ministry statement said.

• US crude oil closed the year down over 10% due to concerns of oversupply from non-OPEC production. WTI settled at $71.65, Brent at $77.04, both marking their first annual decline since 2020. Despite brief spikes from Middle East tensions, the focus remains on the supply-demand balance.

• Gold prices held firm on Friday, marking their best year since 2020 above $2,000 an ounce. Hope for a US Federal Reserve interest rate cut in March buoyed prices. Spot gold remained steady at $2,062.59 per ounce, while US gold futures closed the year 13.45% higher at $2,071.80, securing their first positive year in three.

Key Equity Indices

EMERGING	LATEST	% 1D
Hang Seng	17,047	0.0 %
Shanghai Composite	2,975	0.7 %

DEVELOPED	LATEST	% 1D
Dow Jones	37,690	(0.1) %
DAX	16,752	0.3 %
FTSE 100	7,733	0.1 %
Nikkei	33,464	(0.2) %
Straits Times	3,240	0.8 %