Cement and power generation stocks led gains as key benchmark indices edged higher on positive cues from global markets. A bout of volatility was witnessed in late trade as the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty trimmed gains after both these indices hit their highest level in almost 3 weeks. The market breadth indicating the overall health of the market was positive. The Sensex was provisionally up 179.41 points or 0.62% to 29,315.29. The BSE Small-Cap index was up 1.07%, outperforming the Sensex. Asian and European stocks edged higher amid speculation Greece will resolve its standoff with creditors.
Meanwhile, the yearly SBI Composite Index, a leading indicator for tracking primarily manufacturing activity in Indian economy, inched up to a 2-month high of 52.9 (moderate growth) in February 2015 from 52.1 (moderate growth) in January 2015. Meanwhile, Finance Minister Arun Jaitley yesterday, 17 February 2015, said that there is a great opportunity for India to grow in terms of manufacturing and that India has to concentrate on infrastructure development.
Sugar and FMCG stocks were in demand. Hero MotoCorp slipped on high volumes on reports that the company's promoters are planning to sell part of their holding by offloading shares in the open market today, 18 February 2015. Index heavyweight and India's largest cigarette maker by sales ITC eked out small gains after seeing intraday volatility. Index heavyweight HDFC edged higher.
Foreign portfolio investors sold shares worth a net Rs 182.80 crore during the previous trading session on Monday, 16 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 280.77 crore on Monday, 16 February 2015, as per provisional data. The stock market was closed yesterday, 17 February 2015, on account of Mahashivratri.
In overseas markets, European stocks edged higher amid speculation Greece will hammer out a new financing deal with its international creditors and avoid exiting the eurozone. Asian stocks edged higher amid speculation Greece will resolve its standoff with creditors. In the US, the S&P 500 eked out a small gain yesterday, 17 February 2015, to close at a record level for the second time this year, after reports emerged that Greece may ask for a six-month extension on its debt obligations.
In the foreign exchange market, the rupee edged lower against the dollar.
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Brent crude oil futures edged lower amid oil supply glut. Nevertheless, global crude oil prices have bounced back over the past few days after a steep slide in prices over the past few months. The recent rebound in global crude oil prices will raise concerns pertaining to India's fiscal deficit, current account deficit and fuel price inflation. India imports about 80% of its crude oil requirements. 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.
As per provisional closing, the S&P BSE Sensex was up 179.41 points or 0.62% to 29,315.29. The index jumped 275.44 points at the day's high of 29,411.32 in late trade, its highest level since 30 January 2015. The index fell 8.97 points at the day's low of 29,126.91 at the onset of trading session.
The CNX Nifty was up 59.75 points or 0.68% at 8,869.10, as per provisional closing. The index hit a high of 8,894.30 in intraday trade, its highest level since 30 January 2015. The index hit a low of 8,808.90 in intraday trade.
The BSE Mid-Cap index was up 95 points or 0.88% at 10,832.99. The BSE Small-Cap index was up 120.22 points or 1.07% at 11,366.67. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,625 shares advanced and 1,296 shares declined. A total of 107 shares were unchanged.
The total turnover on BSE amounted to Rs 4144 crore, higher than turnover of Rs 3550.43 crore during the previous trading session on Monday, 16 February 2015.
Index heavyweight HDFC edged higher. The stock was up 3.14% to Rs 1,328.60. The stock hit a high of Rs 1,333 and a low of Rs 1,289. High volumes accompanied the upmove in the stock price. On BSE, 10.85 lakh shares changed hands in the HDFC counter, compared with average daily volume of 1.29 lakh shares during the past one quarter.
Hero MotoCorp lost 5.25% to Rs 2,659.05 on reports that the company's promoters are planning to sell part of their holding by offloading shares in the open market today, 18 February 2015. The stock hit a high of Rs 2,748 and a low of Rs 2,645.05.
The stock fell amid high volumes. On BSE, 9.01 lakh shares were traded in the counter, compared with an average volume of 25,929 shares during the past one quarter. On NSE, 1.06 crore shares changed hands, compared with an average volume of 4.32 lakh shares in the past one quarter.
As per reports, a promoter, Brijmohan Lall Munjal, is planning to sell 70 lakh shares, amounting to $300 million in open market today, 18 February 2015. The shares are offered at an indicative price band of Rs 2,664 to Rs 2,720 per share, a discount of 3.07% to 5.06% to the stock's closing price of Rs 2,806.25 during the previous trading session on Monday, 16 February 2015. As per the shareholding pattern as on 31 December 2014, Brijmohan Lall Munjal holds 1.23 crore shares or 6.21% stake in Hero MotoCorp. The total promoter holding in Hero MotoCorp stood at 39.92% as on 31 December 2014.
Index heavyweight and India's largest cigarette maker by sales ITC eked out small gains after seeing intraday volatility. The stock was up 0.86% at Rs 392.90. The stock hit a high of Rs 401.90 and a low of Rs 385.50. ITC last week said it has entered into Asset Purchase Agreements (Agreements) with Johnson & Johnson, India and Johnson & Johnson Pte., Singapore for purchase of 'Savlon' and 'Shower To Shower' trademarks and other intellectual property, respectively, primarily for use in India.
Sugar stocks were in demand. Bajaj Hindusthan (up 8.88%), Balrampur Chini Mills (up 7.09%), Rana Sugars (up 6.29%), Simbhaoli Sugars (up 6.02%), Shree Renuka Sugar (up 5.48%), Upper Ganges Sugar & Industries (up 5.05%), Dhampur Sugar Mills (up 5.02%), Sakthi Sugars (up 4.78%), EID Parry (India) (up 4.17%), Triveni Engineering & Industries (up 3.64%) and Oudh Sugar Mills (up 1.27%), edged higher. KCP Sugar & Industries Corporation (down 0.25%), Dwarikesh Sugar Industries (down 0.51%), Empee Sugars and Chemicals (down 1.51%) and DCM Shriram Industries (down 2.15%), edged lower.
FMCG stocks edged higher. Marico (up 1.92%), Procter & Gamble Hygiene & Health Care (up 1.69%), Bajaj Corp (up 1.50%), Tata Global Beverages (up 1.03%), Godrej Consumer Products (up 0.61%), Dabur India (up 0.49%), Colgate-Palmolive (India) (up 0.44%), Hindustan Unilever (up 0.37%), GlaxoSmithKline Consumer Healthcare (up 0.34%), Britannia Industries (up 0.21%) and Nestle India (up 0.03%), edged higher. Jyothy Laboratories was down 2.01%.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 62.29, compared with its close of 62.1575 during the previous trading session on Monday, 16 February 2015. The foreign exchange market was closed yesterday 17 February 2015, on account of Mahashivratri.
Brent crude oil futures edged lower amid oil supply glut. Brent for April settlement was off $1.04 a barrel at $61.49 a barrel. The contract had risen $1.13 a barrel, or 1.84% to settle at $62.53 a barrel during the previous trading session.
Finance Minister Arun Jaitley yesterday, 17 February 2015, said that there is a great opportunity for India to grow in terms of manufacturing and that India has to concentrate on infrastructure development. Jaitley made these comments while addressing the valedictory session of the three day event RE-INVEST 2015.
Meanwhile, the yearly SBI Composite Index, a leading indicator for tracking primarily manufacturing activity in Indian economy, inched up to a 2-month high of 52.9 (moderate growth) in February 2015 from 52.1 (moderate growth) in January 2015. In contrast, the monthly index slipped to 48.3 (low decline) in February 2015 from 52.1 (moderate growth) in January 2015. The sharp contraction in the month on month index may be attributed to less number of working days in February compared to January, according to Ecowrap which is an economics research publication from State Bank of India (SBI). According to Ecowrap, a revival in automobile sales, capital goods and consumer non-durables productions and possible upturn in the credit offtake by the large corporates segment highlights possible recovery in the economic activity in coming months. Consumer durable sales have not yet bottomed out. Bank credit and deposits continues to remain sluggish. Interestingly, growth in credit card outstanding continues to push up credit growth. The contraction in the in the monthly index could probably drag down the yearly index after a while, according to Ecowrap.
According to Ecowrap, benign wholesale as well as retail inflation accompanied by a lower cost of borrowing is expected to boost positive sentiment in the economy in coming months and possibly drive credit cycle and growth.
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.
European stocks edged higher today, 18 February 2015, amid hopes Greece can secure a deal with its creditors. Key benchmark indices in UK, France and Germany were up 0.16% to 0.91%.
According to reports, Greece will seek an extension to its rescue deal from the rest of the eurozone to give it time to negotiate a new bailout. 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.
In UK, Bank of England officials voted unanimously to leave the central bank's benchmark interest rate unchanged. The rate-setting Monetary Policy Committee voted unanimously this month to leave the central bank's benchmark interest rate at 0.5% and the stock of assets purchased under its bond-buying program unchanged at 375 billion pounds ($576 billion), according to minutes of the panel's deliberations earlier this month, published today, 18 February 2015.
The UK's unemployment rate fell to a six-year low in December, official data showed on today. The UK Office for National Statistics said that the rate of unemployment dipped to 5.7% in the three months to December from 5.8% in the preceding three month-period.
Asian stocks edged higher today, 18 February 2015, tracking gains in the US as fears eased over Greece leaving the eurozone. Key benchmark indices in Hong Kong, Indonesia, Japan and Singapore were up 0.19% to 1.18%.
Trading on the Hong Kong stock market was open only for half-day today, 18 February 2015, and the stock market remains shut for the rest of the week for the Lunar New Year holiday. The stock market in mainland China is closed for this entire week starting today, 18 February 2015, for the Lunar New Year holiday.
In Japan, the Bank of Japan (BoJ) today, 18 February 2015, stood pat on its policy and painted a rosier picture of economic conditions, despite recent poor growth data and an inflation rate that is moving away from its 2% target. After the latest policy meeting, the BOJ's policy board voted 8-1 to keep unchanged the size of the bank's annual asset purchases worth 80 trillion yen ($670 billion), its main tool to generate higher inflation.
The central bank signaled that it mostly believes that the Japanese economy has finally overcome a hit from the government's move to raise the sales tax. Specifically, the BOJ removed for the first time its reference to the tax increase from the main language in its monthly economic assessment.
Trading in US index futures indicated that the Dow could gain 16 points at the opening bell today, 18 February 2015. US stocks closed slightly higher Tuesday, 17 February 2015, as investors continued to monitor talks between Greece and its creditors in hopes that a deal will be reached to keep the country from falling out of the eurozone.
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