Companies in sectors ranging from capital goods to automobiles are feeling the heat on their margins from rising input costs and slackening growth over the past two quarters. Nevertheless, advance tax payment by the Indian corporate sector this year so far has been decent to strong. Government’s direct tax collection from the corporate sector rose 39.81% to Rs 30655 crore until 21 June 2008 compared to the corresponding period last year.
Oil prices rose to a record near $143 a barrel on Friday, 27 June 2008, as a drop in global equities markets lured more investors into commodities. Crude oil rose one dollar in electronic trading to $141.21 a barrel on Monday, 30 June 2008.
Political uncertainty continues to haunt the bourses. The media continues to speculate whether the ruling Congress led United Progressive Alliance government will be able to push through a much-debated Indo-US nuclear deal and still retain its power, in the face of heavy opposition from its key communist allies. The Left parties on Sunday, 29 June 2008, renewed their threat to withdraw support from the ruling coalition if Prime Minister Manmohan Singh forged ahead with the nuclear deal.
A sustained selling of Indian stocks by foreign institutional investors (FIIs) has also dented market sentiment. As per provisional data, foreign funds sold shares worth a net Rs 703.11 crore on Friday, 27 June 2008. FII outflow in June 2008 totaled Rs 9349 crore (till 26 June 2008). FII outflow in calendar year 2008 totaled Rs 24,719.10 crore (till 26 June 2008).