A bout of volatility was witnessed as key benchmark indices extended losses in mid afternoon trade. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was currently off 172.07 points or 0.59% at 29,148.19. Crude oil prices extended losses registered during the previous trading session after weekly data showed US crude inventories have built up much faster than expected.
Ambuja Cements fell after the company reported tepid growth in Q4 net profit. Shares of other cement stocks also edged lower. Steel makers were in demand. Jindal Steel & Power (JSPL) surged after its power generation unit Jindal Power won the Gare Palma IV 2 & 3 coal block in Chhattisgarh.
Foreign portfolio investors bought shares worth a net Rs 2187.96 crore yesterday, 18 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 327.87 crore yesterday, 18 February 2015, as per provisional data.
Earlier, the Sensex and the 50-unit CNX Nifty had, both, reversed direction after hitting their highest levels in almost three weeks in early trade.
Brent Crude futures extended losses registered during the previous trading session after weekly data showed US crude inventories have built up much faster than expected. Lower global crude oil prices and deregulation of diesel price announced by the Indian government in October 2014 will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. Lower global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. On 15 February 2015, Indian Oil Corporation announced increase in petrol price by 82 paise per litre in Delhi (including state levies) and diesel price by 61 paise per litre.
India's bonds and currency markets were closed today, 19 February 2015, for a public holiday.
More From This Section
In overseas markets, European stocks dropped as pressure mounts for Greece to reach a deal with creditors. Japanese stocks edged higher, helped by gains in financial and shipping companies, and as Sony Corp jumped on a well-received business plan. US stocks ended marginally lower yesterday, 18 February 2015, as investors wrestled with interpreting minutes from the Federal Reserve's latest policy meeting.
At 14:19 IST, the S&P BSE Sensex was off 172.07 points or 0.59% at 29,148.19. The index fell 212.11 points at the day's low of 29,108.15 in the mid-afternoon trade, its lowest level since 16 February 2015. The index jumped 149.60 points at the day's high of 29,469.86 in early trade, its highest level since 30 January 2015.
The CNX Nifty was down 62.70 points or 0.71% at 8,806.40. The index hit a low of 8,794.45 in intraday trade, its lowest level since 16 February 2015. The index hit a high of 8,902.90 in intraday trade, its highest level since 30 January 2015.
The BSE Mid-Cap index was off 75.59 points or 0.7% at 10,752.82. The decline was higher than Sensex's decline in percentage terms. The BSE Small-Cap index was off 44.86 points or 0.39% at 11,319.06. The decline was lower than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,645 shares advanced and 1,122 shares declined. A total of 102 shares were unchanged.
Steel makers were in demand. Bhushan Steel (up 4.85%), JSW Steel (up 3.46%), Tata Steel (up 2.31%), JSW Steel (up 2.12%) and Steel Authority of India (up 1.37%) edged higher.
Jindal Steel & Power (JSPL) surged 18.65% to Rs 184.50. The stock hit a high of Rs 185.65 and a low of Rs 148. The counter witnessed spurt in volumes. On BSE, so far 57.44 lakh shares were traded in the counter, compared with an average volume of 7.05 lakh shares in the past one quarter. JSPL's power generation unit, Jindal Power, won the Gare Palma IV 2 and 3 coal block in Chhattisgarh for Rs 108 per tonne, according to the results of e-Auction for Schedule II coal mines announced by the Ministry of Coal today, 19 February 2015.
The coal ministry has started auctioning coal blocks after the Supreme Court in September last year cancelled the allocation of more than 200 coal mines allotted between 1993 and 2010 after ruling that they were arbitrary and illegal.
Cement shares edged lower. Birla Corporation (down 4.51%), India Cements (down 3.06%), ACC (down 2.89%), UltraTech Cement (down 2.85%), Jaiprakash Associates (down 1.98%), HeidelbergCement India (down 0.79%), JK Lakshmi Cement (down 0.78%) and Saurastra Cement (down 0.72%), edged lower.
Grasim Industries was down 2.5%. Grasim holds majority stake in UltraTech Cement.
Mangalam Cement (up 0.49%), Shree Cement (up 1.27%), Kakatiya Cement (up 1.82%), The Ramco Cement (up 1.86%), Dalmia Cement (Bharat) (up 2.46%), J K Cement (up 2.72%) and Prism Cement (up 4.6%), edged higher.
Ambuja Cements shed 2.34% to Rs 263.20 after the company reported tepid growth in Q4 net profit. The stock hit high of Rs 273.35 and low of Rs 262 so far in intraday trade. The company's net profit rose 3.81% to Rs 328.59 crore on 7.91% growth in total income to Rs 2477.22 crore in Q4 December 2014 over Q4 December 2013. The result was announced after market hours yesterday, 18 February 2015.
Ambuja Cements' net profit rose 15.5% to Rs 1496 crore on 9.2% growth in net sales to Rs 9911 crore in the year ended 31 December 2014 (FY 2014) over the year ended 31 December 2013 (FY 2013). Operating EBITDA (earnings before interest, taxation, depreciation, and amortization) rose 15.7% to Rs 1928 crore in FY 2014 over FY 2013.
Net sales in FY 2014 increased mainly on account of improved sales realization and volume growth, Ambuja Cements said. The company's cost optimisation initiatives partly mitigated inflationary pressures and restricted overall cost increases, Ambuja said. This helped the company's EBITDA growth during the year, it added.
On consolidated basis, Ambuja Cements' net profit rose 16.26% to Rs 1486.50 crore on 8.8% growth in total income to Rs 10424 crore in FY 2014 over FY 2013.
With regard to the status of ongoing projects, Ambuja Cements said that expansion at Sankrail grinding unit in West Bengal comprising the roller press and related logistics enhancements is in progress and is expected to be commissioned in 2015. This will increase grinding capacity by 0.80 million ton, the company said in a statement.
On future business outlook, Ambuja Cements said that cement demand is expected to be better with expectation of higher GDP growth and improved business sentiments. The drivers for cement demand will continue to be housing and infrastructure considering Government's recent push in this sector, the company said. Ambuja Cements said it will continue to work on improving efficiencies and focus on customer and commercial excellence. The company believes that these initiatives will help translate into improved performance.
Most FMCG stocks were trading lower. Godrej Consumer Products (down 1.71%), Nestle India (down 1.67%), Marico (down 1.31%), Hindustan Unilever (down 1.19%), Bajaj Corp (down 1.12%), Colgate(down Palmolive (India) (down 0.8%), Tata Global Beverages (down 0.8%) and Dabur India (down 0.78%) edged lower. Britannia Industries (up 0.07%), Procter & Gamble Hygiene & Health Care (up 0.10%), GlaxoSmithKline Consumer Healthcare (up 0.29%) and Jyothy Laboratories (up 1.24%), edged higher.
Shares of power generations companies declined. GMR Infrastructure (down 3.49%), Tata Power (down 2.09%), NTPC (down 1.88%), NHPC (down 1.67%), Reliance Power (down 1.47%), Torrent Power (down 1.39%), Reliance Infrastructure (down 0.79%), JSW Energy (down 0.21%) and Jaiprakash Power Ventures (down 0.17%), edged lower. CESC (up 0.82%) and Adani Power (up 1.46%), edged higher.
Titan Company rose 0.76%. The company announced during trading hours that with the latest Reserve Bank of India (RBI) circular, it will be able to avail credit from domestic nominated banks for gold purchases without restrictions. This will also result in the company getting the benefits of natural hedging of gold fully with a possibility of negative working capital that the company enjoyed before the curbs were put in place in mid 2013, the company said.
Cipla was down 0.27%. With respect to news titled, "Cipla plans to acquire Pharma based companies in the US," Cipla clarified during trading hours that it does not comment on any product or partner discussions. As a pharmaceutical company, it is constantly in discussions with multiple parties on potential collaboration opportunities - in line with its aspiration to drive access and ensure availability of high quality, affordable medicines. As in the past, the company said it would continue to inform stock exchanges about any price sensitive information before the same is made public.
Brent Crude futures extended losses registered during the previous trading session after weekly data showed US crude inventories have built up much faster than expected. Brent for April settlement was off $1.8 a barrel at $58.73 a barrel. The contract had lost $2 a barrel or 3.19% to settle at $60.53 a barrel during the previous trading session. The latest data showed US crude supplies for the week ended 13 February 2015 saw a whopping 14.3 million-barrel jump from a week earlier, according to the American Petroleum Institute.
The next major event for the financial markets is Union Budget for 2015-16. Finance Minister Arun Jaitley will present Union Budget 2015-16 in Parliament on 28 February 2015. Analysts will scrutinize measures in the Budget for financing infrastructure projects as well as the government's own capital expenditure on infrastructure for the year ahead. This is the first full fledged Budget of the Narendra Modi government and analysts will look for a roadmap for economic growth for the next few years.
Changes in rates of dividend distribution tax, capital gains tax on sale of shares, Securities Transaction Tax (STT) and Minimum Alternate Tax (MAT), if any, will be closely watched. The dividend distribution tax is currently at 15%. The minimum alternate tax is currently at 18.5% of book profits. Short term capital gains tax on sale of shares is currently at 15% while there is zero long capital gains tax on sale of shares held for a period of more than one year.
The upcoming Budget session of the parliament assumes utmost importance as the government intends to replace the ordinances it had promulgated after the conclusion of the winter session of the parliament with Bills and get them cleared by both Houses of Parliament during the budget session. The Narendra Modi government promulgated a slew of ordinances after the last session of Parliament. Some of the key ordinances include raising the FDI in the insurance sector from 26% to 49%, e-auctioning of coal mines and amendment to the Land Acquisition Act.
The government has already started auctioning coal blocks for captive mining. The Coal Mines (Special Provisions) Bill that was moved to replace an ordinance issued earlier was passed by the Lok Sabha in the winter session but it could not be taken up in the Rajya Sabha. The government promulgated the Coal Mines (Special Provisions) Ordinance, 2014, in October to facilitate coal block auctions after the Supreme Court cancelled 204 coal blocks in September.
Through another ordinance, the government has raised the ceiling on foreign investment in the insurance sector to 49% from 26%. The government was unable to get the Insurance Laws (Amendment) Bill, 2008, passed in parliament during the winter session.
Amendments to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 were brought in via an ordinance after the winter session of the parliament.
Analysts are also awaiting further progress on the Goods and Services Tax (GST) in the Budget session after the Constitution Amendment Bill for the introduction of GST was tabled in the Lok Sabha during the winter session of parliament. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.
In overseas markets, European market edged lower today, 19 February 2015, as nail-biting tension over Greece's finances dampened the mood. Key benchmark indices in UK, France and Germany were off 0.31% to 0.53%.
Greek Finance Minister Yanis Varoufakis yesterday, 18 February 2015, said that continuing talks with the country's European creditors were showing signs of progress and that a deal on a new financing arrangement could be reached by the end of the week. After two weeks of stormy talks with its eurozone partners that have helped finance a 240 billion ($273 billion) bailout for Greece, Athens is planning to submit a request to extend that rescue deal today, 19 February 2015. The request is expected to be discussed by senior eurozone finance officials at a technical-level today, 19 February 2015, and by eurozone finance ministers tomorrow, 20 February 2015.
Greece is scrambling to reach a deal with creditors before it runs out of cash. Greece's current bailout plan expires on 28 February 2015.
Meanwhile, the European Central Bank yesterday, 18 February 2015, approved a request from Greece's central bank to lend 68.3 billion euro to its country's banks through an emergency credit facility.
In France, the latest data showed that consumer prices fell further than expected in January. France's consumer price index dropped 1% in January from December and was 0.4% lower on the year, statistics agency Insee said.
In Asia, Japanese stocks settled higher, helped by gains in financial and shipping companies, and as Sony Corp jumped on a well-received business plan. The Nikkei 225 average was up 0.36%. Most other Asian markets were closed for a holiday. Chinese markets are closed for Lunar New Year holiday.
Japan's exports continued to rebound in January while imports shrank. Exports for the month grew 17% from a year ago, according to data released Thursday by the Ministry of Finance. Imports decreased 9% as the price tag for inbound shipments of crude oil was dramatically smaller. The trade balance came to a deficit of 1.18 trillion yen, marking the 31st straight month of shortfalls.
Trading in US index futures indicated that the Dow could fall 49 points at the opening bell today, 19 February 2015. US market ended slightly lower yesterday, 18 February 2015, after a drop in energy shares but declines were limited by minutes from the latest Federal Reserve meeting, which showed policymakers were concerned that a premature rise in interest rates could hurt US economic growth and the recovery in the labour market.
Powered by Capital Market - Live News