A strong rebound during the latter part of the trading session took key benchmark into the green from red in what a choppy trading session. A strong rebound materialized during the last one hour of the trading session after news reports filtered in that Greece has submitted a formal request for a loan extension. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, attained three-week closing high. Metal and power generation stocks rose. Index heavyweights HDFC, Infosys, TCS and L&T edged higher. Three other index heavyweights Reliance Industries, HDFC Bank and ICICI Bank staged intraday rebound. The market breadth indicating the overall health of the market was negative.
The Sensex rose 142.01 points or 0.48% to settle at 29,462.27. 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 retained the Gare Palma IV 2 & 3 coal block in Chhattisgarh through e-Auction. Bank stocks edged lower in volatile trade.
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.
Volatility ruled the roost on the bourses today, 19 February 2015. Initial gains took the Sensex and Nifty to their highest levels in almost three weeks. Later, these two key benchmark indices slipped into the red in mid-morning trade. High intraday volatility was witnessed as the key benchmark indices extended losses in mid-afternoon trade. A strong rebound materialized during the last one hour of the trading session after news reports filtered in that Greece has submitted a formal request for a loan extension.
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.
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In overseas markets, European stocks moved into the green from red after Greece submitted a formal request for a loan extension. 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.
The S&P BSE Sensex rose 142.01 points or 0.48% to settle at 29,462.27, its highest closing level since 29 January 2015. The index jumped 202.60 points at the day's high of 29,522.86 in late trade. 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 CNX Nifty gained 26.20 points or 0.3% to settle at 8,895.30, its highest closing level since 29 January 2015. The index hit a high of 8,913.45 in intraday trade. The index hit a low of 8,794.45 in intraday trade, its lowest level since 16 February 2015.
The BSE Mid-Cap index rose 4.20 points or 0.04% to settle at 10,832.61. The BSE Small-Cap index gained 10.84 points or 0.1% to settle at 11,374.76. Both theses indices underperformed the Sensex.
Among sectoral indices on BSE, the S&P BSE Capital Goods index (up 1.36%), BSE IT index (up 0.79%), BSE Metal index (up 3.82%), BSE Power index (up 0.86%), BSE Realty index (up 1.06%), and BSE Teck index (up 0.59%) outperformed the Sensex. The S&P BSE Auto index (down 0.01%), BSE Bankex index (down 0.6%), BSE Consumer Durables index (up 0.11%), BSE FMCG index (down 0.9%), BSE Healthcare index (down 0.08%), and BSE Oil & Gas index (up 0.13%) underperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,508 shares advanced and 1,379 shares declined. A total of 102 shares were unchanged.
The total turnover on BSE amounted to Rs 3861 crore, lower than turnover of Rs 4162.06 crore during the previous trading session.
Shares of power generation companies rose. JSW Energy (up 0.94%), Reliance Power (up 3.75%), Adani Power (up 7.78%), NTPC (up 0.31%), Torrent Power (up 1.45%), Reliance Infrastructure (up 2.73%) and Tata Power Company (up 2.56%) edged higher. NHPC was flat.
Crompton Greaves (CG) rose 2.61%. The company said after market hours that the Board of Directors of the company at its meeting held today, 19 February 2015, reconsidered and approved the contours of the proposed demerger and decided to implement a 100% demerger of the consumer products business, such that the shareholding pattern of the resulting consumer company shall mirror the shareholding pattern of CG. The company said that board evaluated the salient aspects of the proposed demerger of the consumer products business of the company based on comments received from the Securities & Exchange Board of India, the stock exchanges and investors' feedback. A scheme of arrangement incorporating the above principles will soon be considered by the company's board, CG said.
Steel makers were in demand. Bhushan Steel (up 3.89%), JSW Steel (up 6.51%), Tata Steel (up 2.29%), and Steel Authority of India (up 2.75%) edged higher. Among other metal stocks, Hindustan Copper (up 9.05%), Sesa Sterlite (up 6.95%), Hindustan Zinc (up 4.89%) and NMDC (up 1.47%), edged higher.
Jindal Steel & Power (JSPL) surged 25.59% to Rs 195.30. The stock hit a high of Rs 200.80 and a low of Rs 148. The counter witnessed spurt in volumes. On BSE, 1.08 crore 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, retained 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. As per information shared with the bidders, IV/2 and Gare Palma IV/3 coal blocks, spread over 964.65 hectares has extractable coal reserves of 187.19 million tonnes while balance as on 1 April 2014 was 155.49 million tonnes. 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.
Hindalco Industries rose 3.07% to Rs 156.25. The stock hit a high of Rs 157.70 and low of Rs 150.15. The company won the Gare Palma IV 5 coal block in Chhattisgarh 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 Gare Palma IV 5 coal block has total extractable coal reserves of 50 million tonnes while balance as on 1 April 2014 was 42.43 million tonnes.
Earlier, Hindalco won the Kathautia mine in Jharkhand for Rs 2860 per tonne, according to the results of e-Auction for Schedule II coal mines announced by the Ministry of Coal on Sunday, 15 February 2015.
Cement shares edged lower. ACC (down 2.26%), Shree Cement (down 0.38%) and UltraTech Cement (down 0.76%) declined.
Grasim Industries dropped 1.95%. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
Ambuja Cements shed 1.84% to Rs 264.55 after the company reported tepid growth in Q4 net profit. The stock hit high of Rs 273.35 and low of Rs 262 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.
Bank stocks edged lower in volatile trade. Among private sector banks, Axis Bank (down 0.73%), Kotak Mahindra Bank (down 0.32%), Yes Bank (down 0.79%), and IndusInd Bank (down 0.88%), edged lower. ING Vysya Bank (up 1.2%), City Union Bank (up 2.21%), and Federal Bank (up 0.07%) edged higher.
HDFC Bank rose 0.73% to Rs 1,082.80. The stock hit a high of Rs 1,085 and a low of Rs 1,064.
ICICI Bank edged lower in volatile trade. The stock was down 0.73% to Rs 339.80. The stock hit a high of Rs 344 and a low of Rs 332.10.
Among public sector banks, Bank of Baroda (down 2.51%), Allahabad Bank (down 1.62%), Indian Bank (down 0.46%), Union Bank of India (down 1.26%), United Bank of India (down 1.96%), Syndicate Bank (down 0.73%), Punjab National Bank (down 1.72%), Canara Bank (down 0.9%), Bank of India (down 0.04%), State Bank of India (down 1.05%), Andhra Bank (down 0.86%), Central Bank of India (down 1.04%), Vijaya Bank (down 1.41%), Punjab and Sind Bank (down 0.45%), Corporation Bank (down 0.71%), Bank of Maharashtra (down 0.62%) and Dena Bank (down 0.9%), edged lower. UCO Bank (up 0.07%) and IDBI Bank (up 1.65%), edged higher.
Engineering and construction major Larsen & Toubro rose 2.65% to Rs 1,708.20. The stock hit a high of Rs 1,710 and a low of Rs 1,662.50.
IT major Infosys rose 1.27% to Rs 2,325. The stock hit a high of Rs 2,333.90 and a low of Rs 2,292.
Reliance Industries was up 0.01% to Rs 901.50. The stock hit a high of Rs 907.15 and a low of Rs 887.55.
Housing finance major HDFC rose 1.64% to Rs 1,348. The stock hit a high of Rs 1,357 and a low of Rs 1,324.
Jewellery stocks were in demand. Gitanjali Gems (up 2.95%), PC Jeweller (up 2.74%), Shree Ganesh Jewellery House (up 2.51%) and Classic Diamonds (up 0.50%), edged higher.
Titan Company rose 0.89%. 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.
In a clarification issued with respect to the norms on gold imports in India, the Reserve Bank of India (RBI) yesterday, 18 February 2015, said that nominated banks are permitted to import gold on consignment basis and that banks are free to grant gold metal loans. All sale of gold domestically will, however, be against upfront payments, the RBI said.
While the import of gold coins and medallions will no longer be prohibited, pending further review, the restrictions on banks in selling gold coins and medallions are not being removed, the RBI said. The RBI also clarified that Star and Premier Trading Houses (STH/PTH) can import gold on DP basis as per entitlement without any end use restrictions.
Key benchmark indices edged higher for the seventh day in a row today, 19 February 2015. The Sensex has risen 1,234.88 points or 4.37% in seven trading sessions from a recent low of 28,227.39 on 9 February 2015. The Sensex has risen 279.32 points or 0.95% in this month so far (till 19 February 2015). The Sensex has risen 1,962.85 points or 7.13% in this calendar year so far (till 19 February 2015). From a 52-week low of 20,338.95 on 17 February 2014, the Sensex has risen 9,123.32 points or 44.85%. The Sensex is off 381.89 points or 1.27% from a record high of 29,844.16 hit on 30 January 2015.
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 $1.26 a barrel at $59.27 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 stocks revered initial losses today, 19 February 2015, after Greece submitted a formal request for a loan extension. Key benchmark indices in Germany and France were up 0.05% to 0.22%. UK's FTSE 100 fell 0.08%.
Greece has submitted a formal request for a loan extension, Eurogroup President Jeroen Dijsselbloem said today, 19 February 2015. Greece is asking for a six-month extension, Dijsselbloem wrote on a post to Twitter, according to reports. According to reports, senior eurozone finance ministers are expected to discuss Greece's request for a loan extension today, 19 February 2015. Greece has been making a distinction between a loan agreement and its bailout program, which is scheduled to end later this month.
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 18 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.
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