Key benchmark indices trimmed early gains triggered on positive Asian stocks. The market breadth, indicating the overall health of the market, was strong. The S&P BSE Sensex was up 31.27 points or 0.16%, off 31.27 points from the day's high and up 1.51 points from the day's low. Index heavyweight Reliance Industries (RIL) edged higher in early trade. Another index heavyweight and cigarette major ITC also gained. Mahindra & Mahindra rose after launching Mahindra Reva, an all-electric, zero-emission 'Mahindra e2o' on Monday, 18 March 2013.
At 9:26 IST, the S&P BSE Sensex was up 31.27 points or 0.16% to 19,324.47. The index gained 85.41 points at the day's high of 19,293.20 in early trade. The index rose 29.76 points at the day's low of 19,322.96 in early trade.
The CNX Nifty was up 10.85 points or 0.19% to 5,846.10. The index hit a high of 5,863.60 in intraday trade. The index hit a low of 5,843.20 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 516 shares declined and 219 shares declined. A total of 27 shares were unchanged.
The total turnover on BSE amounted to Rs 147 crore by 09:25 IST
Among the 30-share Sensex pack, 22 stocks gained while rest of them declined. Maruti Suzuki India (up 1.25%), Bajaj Auto (up 1.41%) and GAIL India) (up 1.26%) edged higher from the Sensex pack.
Coal India (down 1.88%), Bhel (down 1.17%) and TCS (down 0.82%) edged lower from the Sensex pack.
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Index heavyweight Reliance Industries (RIL) rose 0.47% at Rs 835.50. The telecom department earlier this month cleared a proposal to allow companies with Internet permits to also offer basic mobile telecom services by paying a one-time license-conversion fee. RIL's telecom unit, Reliance Jio Infocomm, has frequencies to provide broadband Internet across India. Under the new rule, RIL will have to pay about Rs 1658 crore to also provide voice services.
The Finance Minister said in his speech while presenting the Union Budget 2013-14 on 28 February 2013 that the oil and gas exploration policy will be reviewed to move from profit sharing to revenue sharing contracts. The natural gas pricing policy will be reviewed and uncertainties regarding pricing will be removed. NELP blocks that were awarded but are stalled will be cleared. A policy to encourage exploration and production of shale gas will be announced.
Index heavyweight and cigarette major ITC rose 0.3% to Rs 305. The government raised the excise duty on cigarettes by about 18% on all cigarettes except cigarettes of length not exceeding 65 mm in Union Budget 2013-14 which was unveiled on 28 February 2013.
The Ministry of Health & Family Welfare has suggested to the Department of Revenue, Ministry of Finance to increase taxes on all tobacco products and also to impose 'sin tax' on tobacco products, the proceeds of which can be used for tobacco control. The Ministry of Health & Family Welfare, along with WHO Country Office for India, also organized a 'National Consultation on Economics of Tobacco' in December 2012. This information was given by Minister for Health & Family Welfare Shri Ghulam Nabi Azad in written reply to a question in the Lok Sabha on 8 March 2013.
Mahindra & Mahindra rose 0.38%. Mahindra Reva, part of the $15.9 billion Mahindra Group, on Monday, 18 March 2013, unveiled its all-electric, zero-emission 'Mahindra e2o' at a ceremony at India Gate in New Delhi. The Mahindra e2o will go on sale immediately at select Mahindra dealerships nationwide in a phased manner. The vehicle is priced at Rs 5.96 lakh (on road Delhi, post state subsidy).
Speaking on the occasion, Mr. Anand Mahindra, Chairman, Mahindra Group said: "The launch of the Mahindra e2o marks an important milestone for the Mahindra Group which brings to mind the historic words of Pandit Jawaharlal Nehru - 'A moment comes, which comes but rarely in history, when we step out from the old to the new.' The Mahindra e2o is the embodiment of that shift from old to new within the Indian automotive industry. It also advances the Mahindra Group's efforts at redefining sustainable urbanization with the creation of an eco system that includes mobility solutions along with other environment friendly innovations."
Speaking on the occasion of the national launch of the Mahindra e2o, Dr. Pawan Goenka, Chairman, Mahindra Reva Electric Vehicles said: "The Mahindra e2o is our humble effort to usher in positive change in the lives of our customers. Electric vehicles have always had the potential to emerge as a serious alternative to fossil fuel driven vehicles. With the Mahindra e2o we have taken the lead in not only creating a comprehensive ecosystem to nurture sustainable mobility solutions, but have also firmly placed a choice in the hands of our consumers".
GlaxoSmithkline Consumer Healthcare shed 0.55%. The stock turned ex-dividend today, 19 March 2013, for dividend of Rs 45 per share for the year ended 31 December 2012.
Political worries prevail as there has been no breakthrough in talks between the Congress and the DMK over the Sri Lankan war crimes issue. Congress leaders P Chidambaram, AK Antony and Ghulam Nabi Azad met DMK chief M Karunanidhi at his residence on Monday evening to sort matters out after the latter threatened to pull out his ministers from the UPA Cabinet if his demands on the issue were not met. Karunanidhi, as well as his political rival, Tamil Nadu CM J Jayalalithaa, have been demanding amendments to the UN resolution against Sri Lanka. The two parties, the DMK and the AIADMK, have been demanding that India vote in favour of the resolution. They have also demanded introduction of the words 'Eelam' and 'genocide' in the US-sponsored resolution. They have also asked for an international probe into the matter.
Foreign institutional investors (FIIs) bought shares worth a net Rs 506.01 crore on Monday, 18 March 2013, as per provisional data from the stock exchanges.
Reduction of promoter stake to meet the Securities & Exchange Board of India (Sebi) mandated minimum public shareholding of 25% for private companies and 10% for state-run firms will result in supply of equity in the market over the next few months. As per the Sebi mandated minimum public shareholding rule, private-sector companies must cut founders' stake to adhere to the rules by 13 June 2013, while the deadline for state-run firms is 13 August 2013. PSU divestment will also add to share sale glut in FY 2014. The government has set a target of Rs 40000 crore from divestment of government stake in state-run firms and Rs 14000 crore from divestment of stake in non-government companies for FY 2014.
The Reserve Bank of India (RBI) announces mid-quarter review of Monetary Policy 2012-13 at 11:00 IST today, 19 March 2013. The central bank on 29 January 2013 signaled after a monetary policy review that there is less room for aggressive policy rate cuts amid any negative surprise emanating from inflation and the twin deficits viz. the current account deficit and the fiscal deficit.
RBI said on 29 January 2013 that a staggered increase in diesel prices will percolate through to overall costs and inflation. However, these price pressures will dissipate over time, and the consequent reduction entailed in the fiscal deficit will bring about an enduring reduction in inflation and inflation expectations, the central bank said at that time.
The annual rate of inflation, based on the monthly wholesale price index (WPI) edged up to 6.84% in February 2013 from 6.62% in January 2013, data released by the government on 14 March 2013 showed. The government also revised upwards WPI inflation for December 2012 to 7.31% from 7.18% reported earlier. Build up inflation in the financial year so far was 5.71% compared to a build up of 6.56% in the corresponding period of the previous year, the Ministry of Commerce & Industry said in a statement. The non-food manufacturing inflation or core inflation eased to the lowest level in almost 3 years at 3.8% in February 2013, from 4.1% in January 2013, the latest data showed.
Inflation based on the combined consumer price index for urban and rural India had edged up to 10.91% in February 2013, from 10.79% in January 2013, data released by the government on 12 March 2013 showed. Within the consumer price index, inflation in the category 'food and beverages' stood at 13.73% in February 2013.
Reserve Bank of India (RBI) Governor D. Subbarao on 13 March 2013 said that inflation above 6% demands a tightening of monetary policy. The RBI has to ensure that inflation is brought down to the threshold level and is maintained there, Subbarao said at a speech at the London School of Economics. He said the threshold inflation level for India above which inflation hurts growth prospects is 4% to 6%.
The India Meteorological Department will issue its first forecast of 2013 southwest monsoon in April 2013.
The Securities and Exchange Board of India (Sebi) on 8 March 2013 approved the SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 thereby providing a comprehensive regulatory framework for issuance and listing of non-convertible redeemable preference shares. The proposed regulations provide framework for public issuance of non-convertible redeemable preference shares and also listing of privately placed redeemable preference shares, Sebi said in a statement. Considering the risks involved in the instrument, certain requirements like the minimum tenure of the instruments of three years and minimum rating of "AA-" or equivalent etc. have been specified in case of public issuances, Sebi said. For listing of privately placed non-convertible redeemable preference shares, minimum application size for each investor is fixed at Rs 10 lakh.
As per Basel III norms, banks can issue non-equity instruments such as Perpetual Non-Cumulative Preference Shares and Innovative Perpetual Debt Instruments, which are in compliance with the specified criteria for inclusion in Additional Tier I Capital. The proposed regulations shall, mutatis mutandis, be applicable to these instruments issued by banks, subject to compliance with the provisions of Companies Act, 1956 or/and any other applicable laws and such other conditions that may be specified by SEBI and subject to making adequate disclosures and relevant risk factors in the offer document, Sebi said.
Finance minister P. Chidambaram on 8 March 2013 said that the government has delivered on its promise to narrow its fiscal deficit, throwing the ball back into the central bank's court which has often shown reluctance to cut interest rates. On fiscal consolidation, the government has walked the talk, Chidambaram said. Chidambaram said the government's market borrowing plan announced during the budget showed it was following a fiscally prudent path.
Chidambaram said the government's demand to spend a net Rs 40960 crore more this fiscal year had already been accounted for in budget projections and won't affect the 5.2% deficit target for 2012-13. The government on Friday, 8 March 2013, placed in parliament its demand for the extra spending that will mainly be used for providing subsidies on food, fuel and fertilizers.
At a customary post-Budget meeting of the Central Board of the Reserve Bank of India held in New Delhi on 8 March 2013, the Finance Minister reiterated that the government is committed to the fiscal deficit targets in the Budget. RBI governor Dr. D. Subbarao complimented the finance minister on the efforts towards fiscal consolidation in the Budget, which was formulated in difficult times.
It is expected that the move towards fiscal consolidation will impart confidence in the economy, support domestic and foreign investments and will boost supply side initiatives, Chidambaram said. The Finance Minister stated that 15% investment allowance has been given to give a boost to the manufacturing sector. The Finance Minister said that the Budget also focussed on infrastructure investment to restart the growth engine and that it has addressed divergent constraints in this regard.
To protect savings from inflation, especially those of the poor and middle classes, the Budget has announced various measures including the introduction of inflation indexed bonds, Chidambaram said. He hoped that these measures would also incentivise the household sector to save in financial instruments rather than purchase gold.
Prime Minister Dr. Manmohan Singh on 8 March 2013 said in Rajya Sabha that India's economy needs a growth rate of 8 to 9 per cent to get rid of chronic poverty and large scale unemployment of youth. This would require a rapid pace of industrialization, Dr. Singh said. He said that India needs economic reforms to realise its full developmental potential.
The finance ministry on 1 March 2013 said that the Tax Residency Certificate (TRC) produced by a resident of a contracting state will be accepted as evidence that he is a resident of that contracting state and the Income Tax Authorities in India will not go behind the TRC and question his resident status. The finance ministry issued this clarification on 1 March 2013 after it said that concern has been expressed regarding the clause in the Finance Bill, 2013 that amends section 90 of the Income-tax Act that deals with Double Taxation Avoidance Agreements (DTAA). Since a concern has been expressed about the language of sub-section (5) of section 90, this concern will be addressed suitably when the Finance Bill is taken up for consideration, the finance ministry said. In the case of Mauritius, circular no. 789 dated 13 April 2000 continues to be in force, pending ongoing discussions between India and Mauritius, the finance ministry said.
Under the double taxation avoidance agreement India has with Mauritius, investors sending money into India can't be taxed by India if they pay capital-gains tax in Mauritius. Many foreign investors route their investments in India through Mauritius.
The Ministry of Finance and Economic Development, Mauritius on 5 March 2013 said that although there are still some prevailing uncertainties regarding how the GAAR will be implemented in 2016-17, the post budget declarations from the Indian Ministry of Finance contain some positive elements. It is with satisfaction that we note that the Indian Ministry of Finance has acted promptly to clarify the situation regarding the validity of the TRC, the Ministry of Finance and Economic Development, Mauritius said in a statement.
Mauritius said it is committed and willing to collaborate fully to address the concerns of the Indian side on the DTAA while ensuring that the treaty remains commercially viable. "We are optimistic that both sides can conclude a mutually acceptable package that would yield a win-win solution", the Ministry of Finance and Economic Development, Mauritius said. The India-Mauritius Joint Working Group (JWG) met in December 2011 and again in August 2012 to discuss concerns on the operation of the India-Mauritius DTAA. Mauritius has agreed with India on a Tax information Exchange Agreement, which incorporates provisions on assistance in the collection of taxes.
Finance Minister P. Chidambaram on 4 March 2013 said that the government will soon announce more measures -- including sops for exporters -- to boost economic growth. Some of these steps will be announced in parliament during the debate on the Budget, Chidambaram told industry representatives at a customary address held on Monday, 4 March 2013, after the budget announcement on 28 February 2013. The finance minister said that the fiscal deficit could turn out to be lower than the projected 5.2% of gross domestic product for the current fiscal year ending 31 March 2013. The government aims to reduce the fiscal deficit to 4.8% of GDP in the year ending 31 March 2014.
The finance ministry in October 2012 announced a five-year plan to cut fiscal deficit. The government hopes to reduce the fiscal deficit to 3% by March 2017.
The Budget Session of the Parliament which began on 21 February 2013 will conclude on 10 May 2013. In order to enable the Standing Committees to consider the Demands for Grants of Ministries/Departments and prepare their Reports, the two Houses will adjourn for recess on 22 March 2013 to meet again on 22 April 2013.
The government has lined up a number of key bills for consideration and passing during the ongoing Budget session of the parliament, which include The Forward Contracts (Regulation) Amendment Bill, 2010, The Pension Fund Regulator and Development Authority Bill, 2011, The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, The National Food Security Bill, 2011 and The Insurance Laws (Amendment) Bill, 2008.
The government has set a target of Rs 40000 crore from divestment of government stake in state-run firms and Rs 14000 crore from divestment of stake in non-government companies for FY 2014. The target of divestment of government stake in state-run firms has been reduced to Rs 24000 crore for FY 2013 from the initial Rs 30000 crore.
The government expects to mop up Rs 40847 crore from the sale of telecom bandwidth and fees in FY 2014. The government has substantially pruned the expected mop up from the sale of telecom bandwidth and fees to Rs 19440 crore from an initial target of Rs 58217 crore for FY 2013.
Asian stocks moved higher Tuesday, 19 March 2013, to take back some losses made the previous day, when investors reacted to news that a bailout for Cyprus would include a tax on bank deposits. Key benchmark indices in Hong Kong, Singapore, South Korea, Japan, China, Taiwan and Indonesia were up by 0.23% to 2%.
The Eurogroup indicated late on Monday that it is open to negotiating the details of the tax, which is due to be debated in the Cypriot parliament at some point, although the timing remains unclear.
US stocks on Monday fell for a second session as Europe's efforts to get a handle on a rescue of Cyprus provided enough uncertainty for a much-anticipated retreat on the Wall Street.
A two-day meeting of the Federal Open Market Committee (FOMC) on interest rates in the United States begins today, 19 March 2013.
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