Key benchmark indices edged higher for the second day in a row after Finance Minister P Chidambaram set a lower fiscal deficit target of 4.1% of GDP for 2014-15 at the time of announcement of the Interim Budget for 2014-15 on Monday, 17 February 2014, and said that the government will contain fiscal deficit at 4.6% of GDP in 2013-14 and as the government announced lower-than-expected gross market borrowing of Rs 5.97 lakh crore for 2014-15. The market sentiment was boosted by data showing that foreign funds were net buyers of Indian stocks on Monday, 17 February 2014. The barometer index, the S&P BSE Sensex, settled at its highest level in nearly three weeks. The 50-unit CNX Nifty hit its highest closing level in more than three weeks. The Sensex garnered 170.15 points or 0.83%, off 50.81 points from the day's high and up 197.73 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Indian stocks gained for the third day in a row today, 18 February 2014. The Sensex has garnered 440.86 points or 2.18% in three sessions from a recent low of 20,193.35 on 13 February 2014. The Sensex has risen 120.36 points or 0.58% in this month so far (till 18 February 2014). The Sensex has declined 536.47 points or 2.53% so far in calendar 2014 (till 18 February 2014). From a record high of 21,483.74 on 9 December 2013, the Sensex has declined 849.53 points or 3.95%. From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,185.50 points or 18.25%.
Coming back to today's trade, bank stocks were in demand. Capital goods stocks rose for the second day in a row after the government announced reduction in excise duty on some capital goods to 10% from 12% in the Interim Budget for 2014-15 on Monday, 17 February 2014. ABB India surged after reporting strong Q4 results. Shares of metal companies rose on value-buying as investors bet on higher global prices and a spurt in Chinese buying.
The Sensex edged lower amid initial volatility. The Sensex reversed initial losses in morning trade. The Sensex extended gains and hit fresh intraday high in mid-morning trade. The Sensex further extended gains and hit fresh intraday high in early afternoon trade. The Sensex and the 50-unit CNX Nifty, both, hit their highest level in almost three weeks. A bout of volatility was witnessed as key benchmark indices trimmed gains after hitting fresh intraday high in mid-afternoon trade. Intraday volatility continued in late trade.
The market sentiment was boosted by data showing that foreign funds were net buyers of Indian stocks on Monday, 17 February 2014. Foreign institutional investors (FIIs) bought shares worth net Rs 519.80 crore from the secondary equity markets on Monday, 17 February 2014, as per the data from the Securities & Exchange Board of India (Sebi).
The S&P BSE Sensex garnered 170.15 points or 0.83% to settle at 20,634.21, its highest closing level since 29 January 2014. The index jumped 220.96 points at the day's high of 20,685.02 in late trade, its highest level since 29 January 2014. The index fell 27.58 points at the day's low of 20,436.48 in early trade.
The CNX Nifty was up 53.80 points or 0.89% to settle at 6,127.10, its highest closing level since 27 January 2014. The index hit a high of 6,141.70 in intraday trade. The index hit a low of 6,066.80 in intraday trade.
The BSE Mid-Cap index rose 44.79 points or 0.71% to settle at 6,345.46 and the BSE Small-Cap index garnered 50.12 points or 0.8% to settle at 6330.72. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 1929 crore, higher than Rs 1524.26 crore on Monday, 17 February 2014.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,419 shares rose and 1,218 shares fell. A total of 182 shares were unchanged.
The S&P BSE Bankex (up 2.34%), the S&P BSE Capital Goods index (up 2.09%), the S&P BSE Power index (up 1.73%), the S&P BSE Metal index (up 1.03%), the S&P BSE Auto index (up 0.96%) outperformed the Sensex.
The S&P BSE Realty index (up 0.59%), the S&P BSE Consumer Durables index (up 0.55%), the S&P BSE Healthcare index (up 0.22%), the BSE PSU index (up 0.19%), the S&P BSE IT index (down 0.02%), the S&P BSE Oil & Gas index (down 0.06%) and the S&P BSE FMCG index (down 0.28%) underperformed the Sensex.
The S&P BSE Teck index was almost unchanged for the day at 5,089.27. It underperformed the Sensex.
Among the 30-share Sensex pack, 19 stocks rose and rest fell. HDFC (up 2.79%), Tata Power Company (up 2.65%) and Dr. Reddy's Laboratories (up 0.44%) edged higher from the Sensex pack.
Index heavyweight and cigarette major ITC rose 0.83% at Rs 317.80. The stock hit a high of Rs 321.55 and low of Rs 316.75.
Index heavyweight Reliance Industries (RIL) rose 0.37% at Rs 814.45. The scrip hit high of Rs 817.90 and low of Rs 809.
ONGC shed 0.09% to Rs 277. The stock was volatile. The scrip hit high of Rs 278.90 and low of Rs 271.40. ONGC during market hours today, 18 February 2014, clarified that the Government of India is contemplating disinvestment of 10% stake of Indian Oil Corporation (IOC) from out of its present shareholding of 78.92% in IOC in favour of ONGC and Oil India. The modalities of transfer/disinvestment, pricing etc would be decided in consultation with Government of India, ONGC said. ONGC made this clarification after reports which indicated that ONGC and Oil India will buy 10% stake in IOC.
Meanwhile, ONGC's subsidiary -- ONGC Videsh (OVL) and Oil India signed Production Sharing Contract (PSC) for two shallow water exploration blocks in the Bay of Bengal of Bangladesh on Monday, 17 February, 2014. OVL along with Oil India (OIL) formed a consortium (50:50) and participated in the Bangladesh Offshore Bidding Round 2012, launched by Bangladesh Government during December 2012. OVL/OIL consortium was officially notified as the winner of two shallow water blocks SS-09 & SS-04 on 20 August 2013. Subsequently, the Production Sharing Contract (PSC) was discussed on 19 September 2013 and the Government of Bangladesh approved the award of the blocks to OVL/OIL consortium on 3 December 2013.
Shares of Oil India rose 0.09% at Rs 449.10. The scrip hit high of Rs 452.70 and low of Rs 446.60.
Shares of Indian Oil Corporation (IOC) fell 1.45% to Rs 237.10. The scrip hit high of Rs 245.05 and low of Rs 236.
Bank stocks edged higher on renewed buying. Among private bank stocks, AXIS Bank (up 4.36%), HDFC Bank (up 1.3%), Kotak Mahindra Bank (up 4.12%), Yes Bank (up 0.79%) and ICICI Bank (up 2.31%) gained.
Among PSU bank stocks, State Bank of India (up 1.32%), Canara Bank (up 2.37%), Union Bank of India (up 2.04%), Bank of India (up 1.22%), Bank of Baroda (up 0.43%) and Punjab National Bank (up 1.75%) gained.
Finance Minister P Chidambaram in his speech on Interim Budget for 2014-15 on Monday, 17 February 2014, said that the government has set aside Rs 11200 crore for capital infusion in public sector banks in 2014-15. The Finance Minister has extended interest subvention scheme on farm loans for one more year. There is a subvention of 2% and an incentive of 3% for prompt payment, thus reducing the effective rate of interest on farm loans to 4%. So far, Rs 23924 crore has been released under the scheme, the Finance Minister said.
Chidambaram said that banks are set to exceed the target of Rs 7 lakh crore of agricultural credit in 2013-14. The Finance Minister has set a target of agricultural credit of Rs 8 lakh crore for 2014-15.
The Finance Minister has announced a moratorium period for all education loans taken up to 31 March 2009 and which are outstanding on 31 December 2013. The government will take over the liability for outstanding interest as on 31 December 2013, but the borrower would have to pay interest for the period after 1 January 2014. Nearly 9 lakh student borrowers will benefit to the tune of approximately Rs 2600 crore, the Finance Minister said. Chidambaram said that a sum of Rs 2600 crore will be provided in the current financial year itself and this amount will be transferred to state-run Canara Bank. The Finance Minister said that the central scheme for interest subsidy was introduced in 2009-10 in respect of education loans disbursed after 1 April 2009. However, students who had borrowed before 31 March 2009 struggled to pay interest during the period of study and they deserved some relief, he said. Chidambaram said that ten years ago, only a few thousand students -- mostly the well-connected -- got education loans. At the end of December 2013, public sector banks had 25,70,254 student loan accounts and the amount outstanding was Rs 57700 crore.
Shares of metal companies rose on value-buying as investors bet on higher global prices and a spurt in Chinese buying.
Sesa Sterlite (up 0.45%), JSW Steel (up 2.74%), Hindalco Industries (up 0.71%), Tata Steel (up 1.47%), and Hindustan Copper (up 0.77%) gained. NMDC (down 0.33%), National Aluminum Company (down 0.15%), and Bhushan Steel (down 1.73%) declined.
China trade data points to an active January, a leading foreign brokerage firm said in a note, as Chinese steel exports rose 38% year-on-year while iron ore imports rose by 32%.
China is the world's largest consumer of copper and aluminum.
Jindal Steel & Power (JSPL) surged 7.12% to Rs 252.90. JSPL buyback programme ended today, 18 February 2014, as per the company's announcement this month.
Steel Authority of India (Sail) rose 0.17%. The stock turned ex-dividend today, 18 February 2014, for interim dividend of Rs 2.02 per share for the year ending 31 March 2014.
Hindustan Zinc (HZL) fell 2.43% on reports that the government may not complete its sale of minority stakes in Hindustan Zinc (HZL) and Bharat Aluminium (Balco) this fiscal year. The government has proposed to sell all of its 29.5% stake in HZL and its 49% holding in Balco through open auction which are together expected to fetch about Rs 20000 crore. The companies are majority owned by Anil Agarwal's Vedanta Group.
Economic affairs secretary Arvind Mayaram was quoted by media as saying that the decision to disinvest in Hindustan Zinc and Balco stands, adding that the process requires time and may not be completed before 31 March 2014.
GlaxoSmithKline Pharmaceuticals rose 0.16% to Rs 3,018 after the company declared result Q4 and year ended 31 December 2013. The stock hit high of Rs 3,021, also its record high. The stock hit a low of Rs 3,013.50.
GlaxoSmithkline Pharmaceuticals' net profit fell 15.61% to Rs 116.88 crore on 2.74% decline in total income to Rs 685.04 in Q4 December 2013 over Q4 December 2012.
GlaxoSmithKline Pharmaceuticals board of directors of the company at its meeting held today, 18 February 2014, recommended the payment of a dividend of Rs 50 per share for the year ended 31 December 2013.
Meanwhile, the Britain-based GlaxoSmithKline Plc's voluntary open offer to the shareholders of its Indian subsidiary GlaxoSmithKline Pharmaceuticals started today, 18 February 2014. The offer will end on 5 March 2014. The global healthcare major plans to invest Rs 6390 crore to raise its stake in its Indian subsidiary to 75% from the existing 50.67%.
Lupin rose 0.63%. Lupin during market hours today, 18 February 2014, announced the appointment of Dr. Maurice Chagnaud as its President, Europe and Head of Inhalation Strategy. He will be based at Schaffhausen, Switzerland. Dr. Chagnaud has over 20 years of experience in Pharmaceutical business in Europe having worked with Teva and Merck Generics. He joins Lupin from Israeli drug major, Teva, where he was the Senior Vice President, Central & Eastern Europe, responsible for revenues in excess of over 1 billion euros.
In his new role at Lupin, Dr. Chagnaud will assume full responsibility for the company's European business including the company strategy for Generics & Specialty business in Western and CEE region including Russia & CIS countries. He will also be responsible for developing Lupin's core strategy for Inhalation in the developed markets.
Commenting on the appointment, Vinita Gupta, Chief Executive Officer, Lupin said: "Over the years, Lupin has recorded consistent growth across advanced markets like the US and Japan. With Maurice's rich experience we look forward to building our business in Europe, in particular around Complex generics & Specialty. We are delighted to welcome him into the Lupin family".
Auto stocks rose for the second day in a row after the government reduced excise duty on cars, commercial vehicles, sports utility vehicles (SUVs), motorcycles and scooters for the period up to 30 June 2014 in the in the Interim Budget for 2014-15 announced on Monday, 17 February 2014. Tata Motors (up 1.33%), M&M (up 0.74%), Maruti Suzuki India (up 2.69%), Ashok Leyland (up 0.65%) gained.
Two-wheeler stocks declined. Bajaj Auto (down 0.15%), Hero MotoCorp (down 0.04%) and TVS Motor Company (down 1.09%) declined.
The excise duty on small cars, two-wheelers and commercial vehicles has been reduced to 8% from 12%. The excise duty on SUVs has been reduced to 24% from 30%. The excise duty on large cars has been cut to 24% from 27%. The excise duty on mid-segment cars has been cut to 20% from 24%.
Force Motors jumped 14.66% after the company said its promoters have raised their total stake in the company to 56.54% from 51.75% by acquiring additional shares. The company made the announcement after market hours on Monday, 17 February 2014.
Force Motors said that the promoters of the company, viz. Jaya Hind Investments and others, have acquired 6.31 lakh equity shares of Rs 10 each (in demat form) on spot delivery basis from twelve members of the company on Monday, 17 February 2014.
Capital goods stocks rose for the second day in a row after the government announced reduction in excise duty on some capital goods to 10% from 12% in the interim budget on Monday, 17 February 2014. Siemens (up 6.22%), Bharat Heavy Electricals (Bhel) (up 0.98%) and L&T (up 1.89%) gained. The excise duty has been cut from 12% to 10% for a period up to 30 June 2014 for capital goods and consumer durable falling under chapter 84 and chapter 85 of the Schedule to the Central Excise Tariff Act. The chapter 84/85 includes products like boiler, turbine, transformers, motors, air conditioners, toaster, oven, switches, switchgears etc.
Most IT stocks declined. Wipro (down 1.01%), TCS (down 0.3%), HCL Technologies (down 1.03%) and Tech Mahindra (down 0.02%) declined. Infosys rose 0.48%.
Bharti Airtel dropped 0.69%. The company and Loop Mobile jointly announced a strategic agreement for their operations in Mumbai (India) service area. The proposed association will undergo seamless integration once definitive agreements are signed, and is subject to regulatory and statutory approvals. Under the agreement, Loop Mobile's 3 million subscribers in Mumbai will join Airtel's over 4 million subscribers, creating an unmatched mobile network in Mumbai.
The proposed transaction will bring together Loop Mobile's 2G/EDGE enabled network supported by 2,500 plus cell sites, and Airtel's 2G and 3G network supported by over 4,000 cell sites across Mumbai. It will also offer subscribers the widest exclusive retail reach with 220 outlets that will enable best-in-class customer service.
The agreement will ensure continuity of quality services to Loop Mobile's subscribers, while offering them the added benefits of Airtel's innovative product portfolio, and access to superior services, innovative products like 3G, 4G, Airtel Money, VAS and domestic/international roaming facilities.
Loop Mobile subscribers will become part of Airtel's global network that serves over 289 million customers in 20 countries. Globally, Airtel is ranked as the fourth largest mobile services provider in terms of subscribers
ABB India surged 12.8% after net profit surged 249.37% to Rs 58.59 crore on 5.72% increase in total income to Rs 2204.56 crore in Q4 December 2013 over Q4 December 2012. The result was announced during market hours today, 18 February 2014.
The company said it generated a healthy operating cash flow in the midst of a tight liquidity in the market.
The company received orders worth Rs 1666 crore in Q4 December 2013, which was higher than the order intake of Rs 1579 crore in the corresponding quarter of the previous year. The order intake for the full year 2013 stood at Rs 6717 crore. Base orders from a wider spectrum of customers helped offset dearth of large projects in the market, ABB India said in a statement. The company said its exports grew, annulling the effect of a contraction in the domestic market opportunities. The company continued to tap sectors like renewable energy, data center, railways, grid stability, mining, oil and gas that look increasingly promising, the company said in a statement.
The company said it is well positioned with an order backlog of Rs 7709 crore as on 31 December 2013, providing necessary visibility to future revenue.
ABB India, Managing Director, Bazmi Husain, said: "2013 witnessed a steady improvement in margins of the company. While market uncertainties continue, our intensified efforts to remain cost competitive and strengthen project management have borne visible results. Our capacities are ready to address the next phase of growth as the market improves. The new PASS, GIS factory reinforces our technology focus and commitment to the India growth story. Overall, we remain aligned to charting a course of profitable growth backed by business led collaboration and relentless execution".
Ambuja Cements rose 0.83% to Rs 152.55 after a bulk deal was executed on the counter on BSE today, 18 February 2014. A bulk deal of 10 lakh shares was executed on the Ambuja Cements counter at Rs 153.25 per share at 13:09 IST on BSE today, 18 February 2014. The bulk deal saw 0.06% equity of Ambuja Cements changing hands.
Castrol India fell 0.39%. The company's net profit rose 7.04% to Rs 126.20 crore on 7.80% increase in total income to Rs 836.60 crore in Q4 December 2013 over Q4 December 2012. The result was announced after trading hours on Monday, 17 February 2014.
Castrol India's net profit rose 13.68% to Rs 508.60 crore on 2.20% increase in total income to Rs 3263.20 crore in the year ended December 2013 over the year ended December 2012.
Commenting on the full year results, Ravi Kirpalani - Managing Director, Castrol India said: "Despite the challenging economic environment, Castrol India recorded higher profit after tax for the full year 2013, through improved gross margin and effective cost management."
Mr. Kirpalani added: "The weak macro-economic environment, depreciating rupee, persistent high inflation, rising fuel prices and high interest rates, have impacted both demand and costs. New vehicles sales, except two-wheelers and tractors, registered a double digit decline -- the worst performance in over a decade. Slowdown in infrastructure, building and construction segments, coupled with flat to declining industrial production further impacted demand. Despite these challenges, the company delivered strong underlying profit growth, driven largely by our personal mobility business which includes passenger car and two-wheeler oils. The micro-marketing approach in passenger cars and the use of digital and social media were strong enablers in these segments. This was complemented by strong growth in our distribution network."
Mr. Kirpalani continued: "The industrial business faced an even tougher environment with circa 20% demand shrinkage in the core manufacturing sector. Despite this, volumes were higher than last year, driven mainly through new customer acquisition, delivering enhanced value and production cost efficiencies."
In its outlook, Castrol India said the strong headwinds of 2013 are likely to continue into 2014. The first half is likely to remain both volatile and uncertain owing to the macro-economic weaknesses and upcoming national elections. The company's response is to build on the momentum that it had generated in 2013, especially a sharp focus on growing personal mobility business and improving advocacy, availability and affordability. Castrol India said that the company is in a strong position to benefit from growth prospects on account of its strong brands, enduring relationships with key stakeholders and continued commitment of its staff.
NHPC was unchanged at Rs 17.95. The company after market hours today said that Unit-1 of Parbati-III H.E. Project has been synchronized at 15:50 IST on 17 February 2014.
Zee Entertainment Enterprises rose 1.62%. The company during market hours today, 18 February 2014, said it has fixed 4 March 2014 as record date for issuance of 6% Cumulative Redeemable Non-Convertible Preference Shares of Re 1 each as Bonus in the ratio of 21 bonus Preference Shares of Re 1 each for every one equity share of Re 1 each held in the company.
Gujarat Pipavav Port jumped 13.55% after net profit surged 114% to Rs 77.10 crore on 22% increase in total income to Rs 145.20 crore in Q4 December 2013 over Q4 December 2012. The result was announced during trading hours today, 18 February 2014.
Gujarat Pipavav Port's EBITDA (earnings before interest, taxes, depreciation and amortization) jumped 47% to Rs 83.50 crore in Q4 December 2013 over Q4 December 2012. EBITDA margins stood at 57% in Q4 December 2013, higher than 48% in Q4 December 2012.
The company's net profit surged 159% to Rs 191.80 crore on 24% increase in total income to Rs 517.90 crore in the year ended December 2013 over the year ended December 2012.
EBITDA jumped 41% to Rs 256.80 crore in the year ended December 2013 over the year ended December 2012. EBITDA margins stood at 50% in the year ended December 2013, higher than 44% in the year ended December 2012.
Bond prices rose after the government's announcement of lower-than-expected gross market borrowing of Rs 5.97 lakh crore for 2014-15 at the time of announcement of the Interim Budget for 2014-15 on Monday, 17 February 2014. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.7676%, lower than its close of 8.8047% on Monday, 17 February 2014. Bond yield and bond prices move in opposition direction.
The estimated gross borrowing of Rs 5.97 lakh crore for 2014-15 is lower than gross borrowing of Rs 6.29 lakh crore for the current fiscal year in the budget presented a year ago.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 62.22, compared with its close of 61.84/85 on Monday, 17 February 2014.
Global credit rating agency Moody's Investors Service today, 18 February 2014, said that India's fiscal position remains weak and a cut in spending to meet the budget gap estimate this year will probably hurt economic growth. "While demonstrating a commitment to meeting its deficit targets, the Indian government's spending cuts are also likely to constrain GDP growth in the current year," Atsi Sheth, lead India analyst for sovereign ratings, said in a statement. The government that takes power after elections will determine budget outcomes and long-term fiscal trends, she said. The government's ability to meet the deficit target for the year starting 1 April 2014 will depend on pace of growth, global commodity prices and the rupee's movements, Moody's said. Dividends from state enterprises and fees from a spectrum auction helped make up a shortfall in tax revenue, it said.
Moody's has a stable outlook on India's Baa3 sovereign-credit rating, the lowest investment grade rating.
Finance minister P. Chidambaram today, 18 February 2014, said that the monetary authority must abide by the government's policy, adding, in a developing country like India there must be a balance between price stability and growth. "Sometimes, not enough attention has been paid to that balance," Chidambaram said in an interview with a television news channel. His comments follow a report from a panel set up by the central bank last month, which suggested the Reserve Bank of India should pursue managing inflation as its main policy objective.
Commenting on the interim budget, Mr. Rana Kapoor, President, The Associated Chambers of Commerce and Industry of India (ASSOCHAM), on Monday, 17 February 2014, said: "Despite being low on expectations in an election year, Finance Minister P Chidambaram's Interim Budget has given a pleasant surprise at least partly to the manufacturing sector which has been bleeding. The excise duty cut on automobiles and capital goods will provide a much-needed relief to these sectors". However, the industry would expect a much larger package from the new government to revive the manufacturing sector when a regular budget is presented some times in July, the ASSOCHAM chief said. More importantly, the Finance Minister deserves to be complimented since he is leaving behind the government treasury in a sound shape with the result that the overall macro picture of the Indian economy today looks far better than it was about eight months back, the ASSOCHAM chief said.
The external sector today is far more stable with exports picking up and the current account deficit capped at USD 45 billion, a little less than half the worrisome level of USD 88 billion in 2012-13. The fiscal deficit has also been contained at 4.6 per cent, though it has been achieved by a big cut in the Plan expenditure, ASSOCHAM said. But, here the Finance Minister did not have many choices either, ASSOCHAM said. The ASSOCHAM feels that there is an imperative need to cap the non-plan expenditure of the Central Government. The Non-Plan expenditure of over Rs 12 lakh crore gives an impression of a fat government which needs to reduce its size so that more resources are left for development, the ASSOCHAM said in a statement.
The Finance Minister also needs a pat for not yielding to pressures of populism, which is generally evident in an election year, ASSOCHAM said. However, a ballooning subsidy budget of Rs 2.46 crore remains a big burden on the exchequer and needs to be pruned to a sustainable level by better targeting the subsidies in food, fuel and fertilizer, it said.
Despite being a vote on account, the initiatives on skill development, and the MSME innovation are laudable, ASSOCHAM said. "While the industry too is disappointed for the country not being able to usher in the major tax reforms in the form of GST, we look forward to the new government to complete the task. The ASSOCHAM would like to see a government which is stable and decisive so that India reverts back to 8-9 per cent growth sooner than later. For us, there are no choices than to grow at a rapid pace whichever political combination is voted to power," the ASSOCHAM said.
Commenting on the Vote on Account, Mr. Sidharth Birla, President, Federation of Indian Chambers of Commerce and Industry (FICCI), on Monday, 17 February 2014, said: "The statement made by the Finance Minister was balanced and largely on expected lines. While industry expectations were limited from an interim budget formality, the emphasis laid on turning around the growth trajectory and reviving the manufacturing sector in particular are well received." The maximum focus this time was on the fiscal deficit number, a figure being closely watched by all investors. "The Finance Minister has stuck to what he had promised with fiscal deficit being kept at 4.6% of GDP in fiscal 2014 and lower than the budget estimate of 4.8%. The future direction being given with regard to central government finances is also good. While this was the last budget of the government, yet the Finance Minister refrained from announcing any large populist measures", added Mr. Birla.
Industry has welcomed the initiative of a ten point charter outlining the vision for future of the Indian economy, FICCI said in a press release issued on Monday, 17 February 2014. Many of the points mentioned such as need for fiscal consolidation, importance of foreign investments for financing CAD, creating a balance between price stability and growth, deepening the financial sector reforms, intensifying efforts on infrastructure development, boosting manufacturing growth with zero taxing of exports and minimum tariff protection to encourage domestic value addition, containing subsidies, having planned urbanisation and pushing skill development have been highlighted by FICCI even in its most recently launched 'Economic Agenda for Growth', FICCI said. "While many of these points are aspirational, these are all achievable through concerted effort and a coordinated approach between the centre and the states", said Mr. Birla.
The financial markets also received well deserved attention in the Vote on Account statement with announcements pertaining to revamping of the ADR/GDR Scheme, liberalising the rupee denominated corporate debt market, deepening and strengthening the currency derivatives market, creating one record for all financial assets of individuals, enabling smoother clearing and settlement for international investors for investing in Indian bonds, the FICCI said. "These measures will help in further broadening of the Indian financial market and efficient availability and utilisation of risk capital", said Mr. Birla. "On the excise duty reduction that was affected in select sectors, FICCI feels that the Finance Minister has chosen the areas carefully based on the recent performance of the industrial sector. While the period of relief is small, this move could provide some reprieve to the identified industries," added Mr. Birla.
The Finance Minister's statement that the government remains fully committed to 'Aadhaar', which is a key tool for empowerment, is re-assuring. FICCI also welcomes the Finance Minister's allocation of Rs 100 crore to the India Inclusive Innovation Fund for promoting innovation amongst the MSMEs which form the backbone of India's industrial economy, FICCI said.
Welcoming the Interim Budget presented by the outgoing government, Mr. Kris Gopalakrishnan, President, Confederation of Indian Industry (CII), on Monday 17 February 2014, said that the vision presented in the Budget is very much in line with what CII believes in. The Finance Minister has highlighted the importance of the manufacturing sector, which is key to reviving the economy, Mr. Gopalakrishnan said. The performance of the manufacturing sector over the last one year has been consistently poor and is in need of intervention by the government. "On behalf of CII, I must thank the Finance Minister for recognising this need and reducing excise in some of the most affected subsectors of manufacturing. The reduction in excise duty on sectors such as automobiles, capital goods and consumer electronics is indeed welcome, as this will help revive demand in these sectors," Mr. Gopalakrishnan said.
Since the Finance Minister made a special mention of the forward looking policy to promote electronics sector, CII hopes that the association's recommendation of abolition of SAD and reduction in CST for electronics sector will be taken up in the regular budget, Mr. Gopalakrishnan said. This is important as electronics is a zero duty sector on account of ITA I. The restructuring of excise duty on handsets to include 1% excise duty without CENVAT credit on inputs is welcome as this will encourage handset manufacturing in India, the CII said in a press release.
The CII President also welcomed the fiscal figures outlined by the Finance Minister in the Interim Budget speech. "It is clear that the government has stayed on the fiscal discipline roadmap and achieving a 4.6% fiscal deficit is no small feat. The fact that deficit has been targeted at 4.1% for the next fiscal sends a strong signal and should help confidence in the economy. While the Interim Budget maintained overall expenditure on a tight leash, the Finance Minister manages to make some important allocations. Given the stressed assets in the banking sector, the Finance Minister's allocation of Rs 11300 crore for strengthening the capital base of public sector banks is welcome," said Mr Gopalakrishnan.
In the 10-point vision laid out by the Finance Minister, besides mentioning reduction in the twin deficits, emphasis was also given to a balanced monetary policy, implementation of infrastructure projects and development of cities. CII hopes that the new government will further strengthen the support given to industry and extend the support to other sectors. The implementation of GST should also be a priority for the coming government, the CII release said.
Bharatiya Janata Party (BJP) National Treasurer and Member of Parliament from Rajya Sabha Mr. Piyush Goyal on Monday, 17 February 2014, said that creation of over 200 million jobs over the next 10 years is going to be the priority of the BJP. Addressing the National Council meeting of the Confederation of Indian Industry (CII), Mr. Goyal said affordable housing alone could provide the kind of spur to manufacturing which the country needed. If the country took up the agenda of creating 100 million affordable homes then 15 million jobs could easily be created every year, he said. Ruing the fact that the National Skill Development Council (NSDC) had not been able to get the funds that it had been promised after all these years, Mr. Goyal said it was regrettable that only 3 lakh people had been imparted skills against a target of several millions. He suggested dovetailing of skill development of 200 million people with the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) so that people could actually be provided with funds to gain skills. Four areas where skills could be built, he said, were tourism, manufacturing, housing and infrastructure.
Answering a question on the issue of goods and services tax (GST), Mr. Goyal said BJP is not against GST provided certain issues are addressed. These included issues such as the needs of states in situations of natural calamities. "If these contentious points are addressed then BJP stands committed to the approval of GST," said Mr Goyal. On the issue of land acquisition he said the government should have increased compensation and simplified the procedures but "it had ended up making the law so draconian that had not Mr Arun Jaitley, leader of the Opposition in the Rajya Sabha, insisted on keeping four-five sectors out of its purview, the entire business would have come to a standstill".
Maintaining the party's opposition to multi-brand FDI in retail, Mr Goyal said that unless the country's manufacturing base was strengthened, it was not going to allow foreign brands to enter India as they were not going to work on strengthening the backend systems and supply chains.
In his first public interaction with CII at its National Council Meeting in New Delhi on Moday, 17 February 2014, Mr. Arvind Kejriwal, leader of the Aam Aadmi Party and former Chief Minister of Delhi said that the key issue today is "governance". The need of the hour, he said, is "honest and efficient governance" which has been lacking all these years, and due to which even though India was led by the best economists in the recent past, the country's growth has faltered. Addressing industry leaders from diverse sectors, Mr. Kejriwal emphasized that he supported business and was not against capitalism, but against crony capitalism adding that "a small section of people are looting the country". He praised industry for driving economic and inclusive growth and said that it was business that is best suited to address needs such as "inclusive growth" through the creation of jobs. The government, he said, cannot create jobs; it can only create an eco-system that supports the creation of jobs. Elaborating on the role of the government, Mr. Kejriwal said that the government must provide "security, justice and corruption-free governance" for growth and development to take place.
Sharing his views on improving governance and therefore the eco-system within the country, Mr. Kejriwal said that "we want to end inspector and license raj and corruption". He spoke of measures such as creating a strong deterrence to corruption, revisiting the existing systems, using technology efficiently, and decentralizing power that would help them achieve their goal. "We need to simplify laws, the judicial system and have a stable tax regime, among other measures that will all work together to boost India's growth, and would like industry's views on how it can be done", he said.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
European stocks declined on Tuesday, 18 February 2014, as German investor confidence fell for a second month in February. Key benchmark indices in France, Germany and UK were off 0.18% to 0.61%.
German investor confidence fell for a second month in February. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, slid to 55.7 from 61.7 in January, after reaching a seven-year high of 62 in December.
UK inflation unexpectedly cooled in December, slowing to below the Bank of England's 2% target for the first time since November 2009. Consumer prices rose an annual 1.9%, down from 2% in December, the Office for National Statistics said today in London.
Asian stocks edged higher on Tuesday, 18 February 2014, after the Bank of Japan maintained unprecedented asset purchases and boosted lending programs. Key benchmark indices in Hong Kong, Indonesia, Singapore, South Korea and Taiwan were up 0.03% to 0.43%.
Japan's Nikkei Average jumped 3.13%. At the end of a monetary policy review, Japan's central bank today, 18 February 2014, pledged to maintain plans to expand the monetary base by 60 trillion yen to 70 trillion yen ($686 billion) per year. It also doubled a funding facility to 7 trillion yen and said individual banks could borrow twice as much low-interest money as previously under a second lending facility.
China's Shanghai Composite fell 0.77%. The People's Bank of China sold repurchase contracts for the first time since June after money-market rates slid and the country reported record lending figures in January. The PBOC conducted 48 billion yuan ($7.9 billion) of 14-day repurchase contracts at a yield of 3.8%, according to a statement on the bank's website.
China's foreign direct investment climbed 16.1% to $10.76 billion in January from a year earlier, according to a government report released today, 18 February 2014.
Trading in US index futures indicated that the Dow could advance 3 points at the opening bell on Tuesday, 18 February 2014. US stock markets were closed on Monday, 17 February 2014, for a holiday.
Federal Reserve Chairwoman Janet Yellen said last week that US growth has strengthened and that only a "notable change in the outlook" for the economy would prompt policy makers to slow the pace of cuts to the monthly bond-buying program.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion. The Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market.
Powered by Capital Market - Live News
