The optimism arising from a recovery in Asian markets may be offset by provisional data showing heavy FII sales in the cash and futures markets on Monday (8 January), when the Sensex went into a tailspin. The post-listing performance of oil explorer, Cairn India, will also dictate the trend during the session.
As per provisional data, FIIs were net sellers to the tune of Rs 788 crore on 8 January. They were net sellers to the tune of Rs 799 crore in index-based futures and Rs 326 crore in individual stock futures on the same day. Net inflow from FIIs was Rs 0.90 crore on Friday (5 January), the day when the Sensex had lost 11 points.
Meanwhile, the Authority for Advance Ruling on income tax on Monday (8 January) ruled that the income of two foreign institutional investors – Fidelity Advisory and Mathew International – will be taxed in India as capital gains and not as business income. FIIs, which have the option to approach the Supreme Court (SC), contended that their business income cannot be taxed as they did not have a permanent establishment (PE) in India.
On Tuesday (9 January), stock markets in Asia recovered from Monday's sell-off, with gains of as much as 1%.
US stocks advanced on Monday, led by tech shares, as brokerage upgrades on bellwether companies such as International Business Machines Corp boosted investor optimism. The Dow Jones industrial average was up 25.48 points, or 0.21%, at 12,423.49. The Standard & Poor's 500 Index was up 3.13 points, or 0.22%, at 1,412.84. The Nasdaq Composite Index was up 3.95 points, or 0.16%, at 2,438.20.
US crude oil fell below $56 a barrel as winter weather remained unusually warm in the United States.