Market jumps in early trade

Key benchmark indices edged higher in early trade. The barometer index, the S&P BSE Sensex was currently up 107.23 points or 0.37% at 29,427.49. The market breadth indicating the overall health of the market was strong.

Foreign portfolio investors bought shares worth a net Rs 2187.96 crore on Wednesday, 18 February 2015, as per provisional data. Domestic institutional investors (DIIs) bought shares worth a net Rs 327.87 crore on Wednesday, 18 February 2015, as per provisional data released by the stock exchanges.

Among global markets, all the Asian indices, barring Japan, were shut due to Lunar New Year celebrations.

At 9:19 IST, the S&P BSE Sensex was up 107.23 points or 0.37% at 29,427.49. The index rose 115.97 points at the day's high of 29,436.23 at the onset of trading session. The index rose 66.62 points at the day's low of 29386.88 at the onset of trading session.

The CNX Nifty was up 15.30 points or 0.17% at 8,884.40. The index hit a high of 8,893.30 in intraday trade. The index hit a low of 8,881.70 in intraday trade.

The BSE Mid-Cap index was up 54.49 points or 0.50% at 10,882.90. The BSE Small-Cap index was 58.93 points or 0.52% at 11,422.85. Both these indices outperformed the Sensex.

The market breadth indicating the overall health of the market was strong. On BSE, 873 shares advanced and 256 shares declined. A total of 36 shares were unchanged.

Ambuja Cements rose 0.37%. 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.

Hindalco Industries was flat at Rs 151.60. The company won the Gare Palma IV 5 mine in Chattisgarh for Rs 3,502 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.

Bharti Infratel rose 1.21%. The Reserve Bank of India yesterday, 18 February 2015, raised the ceiling on investment in the company's shares by foreign institutional investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) under the portfolio investment scheme to 49% of the company's equity capital with effect from 18 February 2015, from earlier 24%. Total FII holding in Bharti Infratel stood at 17.82% as on 31 December 2014.

Hero MotoCorp rose 0.95%. The promoter group Hero Group announced market hours yesterday, 18 February 2015, that in a major initiative towards diversification into fast growth areas, the BML Munjal-led Hero Group has sold 70 lakh shares in its flagship firm Hero MotoCorp. Following the sale, Hero Group still holds a significant stake of over 36% in the company. The group will use the sale proceeds to fund new growth avenues available through the government's 'Make in India' initiative, the Hero Group said in press release. The Hero Group said that it remains strongly committed to its core two-wheeler business, where it sees enormous potential, both in India and overseas. The Hero Group said that Hero MotoCorp has successfully consolidated its market leadership in the highly-competitive domestic market in India, even as it expands its global footprint across Asia, Africa and Central and South America.

Wipro fell 0.67%. With respect to news article titled "Wipro may hive off its unit investing in nextgen ideas", Wipro clarified after market hours yesterday, 18 February 2015, that the company keeps exploring continuously various structuring options for its businesses and as and when any firm decision is taken by the board it will be communicated to the stock exchanges at the appropriate time.

Lupin rose 0.53%. The company announced after market hours yesterday, 18 February 2015, that its US subsidiary, Lupin Pharmaceuticals Inc. (collectively Lupin) has launched the all new InspiraChamber Anti-Static Valved Holding Chamber (VHC) under a strategic licensing agreement with the New Jersey based respiratory research and development company InspiRX Inc. (InspiRX). The agreement grants Lupin exclusive rights to promote, distribute and market InspiraChamber VHC in the United States. Developed by InspiRX, the all new InspiraChamber VHC is a device that has been designed to enhance delivery of aerosol therapies. The InspiraChamber VHC is intended to be used by patients who are under the care or treatment of a physician or licensed healthcare professional. The device is intended to be used by asthma patients to administer aerosolized medication from most pressurized Metered Dose Inhalers (pMDIs). Several clinical and laboratory studies have shown that the InspiraChamber VHC has features that are superior to the leading VHCs in the market. These features may lead to more effective delivery of asthma medicines.

ONGC rose 0.80%. The company announced after market hours yesterday, 18 February 2015, that on 18 February 2015, the company entered into a memorandum of understanding (MoU) with Super Wave Technology (SWTPL) for researching alternative technology for hydraulic fracturing. SWTPL is a company incorporated by Society for Innovation and Development, Indian Institute of Science, Bangalore. With this partnership, ONGC will provide assistance to SWTPL, for developing Shock Wave Assisted Fracturing technology, an alternate to the conventional hydraulic fracturing which if proven effective as a substitute to hydraulic fracturing, in particular for shale gas exploration, will be a game changer for the oil & gas industry. The MoU signed will provide impetus for development and field implementation of Shock Wave technology for oil & gas fields. Once successful, technology will be jointly patented by ONGC and SWTPL for further commercial benefits worldwide.

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.

All the Asian indices, barring Japan, were shut due to Lunar New Year celebrations. Nikkei 225 was up 0.46%.

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.

In Europe, Greek officials are reportedly planning to submit a proposal to eurozone finance ministers for breaking the impasse in debt negotiations between the new government in Athens and Greece's European creditors.

Athens tomorrow, 20 February 2015, will propose an extension of several months to the current bailout program, a government spokesman, Gavriil Sakellaridis, was quoted by media as saying yesterday, 18 February 2015. Media reports indicated that Greece would seek a four-month extension of the current program, under which the country has received 240 billion euros, or $272 billion, in exchange for pursuing various economic overhauls.

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.

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