A bout of volatility was witnessed as key benchmark indices trimmed gains after an initial surge. The barometer index, the S&P Sensex, was currently up 198.17 points or 0.68% at 29,418.29. The market breadth indicating the overall health of the market was strong, with almost two gainers for every loser on BSE. All eyes are now on Finance Minister Arun Jaitley's speech in parliament which is expected to start at 11:00 IST as he tables the Union Budget 2015-16 in parliament today, 28 February 2015.
Infrastructure stocks rose on hopes of sops for the sector in the Union Budget 2015-16 today, 28 February 2015. Engineering and construction major L&T scaled record high. Shares of companies operating in the capital goods sector rose across the board.
Trading for the day began on an upbeat note as key benchmark indices opened with an upward gap. The 50-unit CNX Nifty hit its highest level in more than four weeks and the Sensex hit its highest level in more than a week in early trade.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 1957.10 crore yesterday, 27 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 491.93 crore yesterday, 27 February 2015, as per provisional data.
Due to the major event viz. the Budget, stock exchanges are conducting a live trading session today, 28 February 2015, despite it being a Saturday. Trading began at 9:15 IST and will conclude at 15:30 IST.
At 10:15 IST, the S&P BSE Sensex was up 198.17 points or 0.68% at 29,418.29. The index jumped 277.38 points at the day's high of 29,497.50 in early trade, its highest level since 19 February 2015. The index rose 176.88 points at the day's low of 29,397 in early trade.
The CNX Nifty was up 63.75 points or 0.72% at 8,908.35. The index hit a high of 8,919.95 in intraday trade, its highest level since 30 January 2015. The index hit a low of 8,894.70 in intraday trade.
The market breadth indicating the overall health of the market was strong, with almost two gainers for every loser on BSE. On BSE, 1,331 shares gained and 696 shares fell. A total of 91 shares were unchanged.
The BSE Mid-Cap index was up 64.47 points or 0.6% at 10,875.93, underperforming the Sensex. The BSE Small-Cap index was up 90 points or 0.8% at 11,409.56, outperforming the Sensex.
The total turnover on BSE amounted to Rs 736 crore by 10:15 IST, compared with turnover of Rs 246 crore by 09:25 IST.
Infrastructure stocks rose on hopes of sops for the sector in the Union Budget 2015-16 today, 28 February 2015. Jaiprakash Associates (up 1.54%), Hindustan Construction Company (up 2.59%), Gammon India (up 0.85%), IRB Infrastructure & Developers (up 1.78%), GVK Power Infrastructure (up 1.96%), Adani Ports & Special Economic Zone (up 2.96%), Lanco Infratech (up 6.4%), and GMR Infrastructure (up 3.57%) gained.
Engineering and construction major L&T gained 2.3% to Rs 1,799 after scaling a record high of Rs 1,800 in intraday trade.
The thrust of the Union Budget 2015-16 is expected to be on infrastructure by way of an increase in government's own capital expenditure along with measures to increase private participation for the development of infrastructure. The government has clearly highlighted its long-term priorities like infrastructure (smart cities, renewable energy, railways, roads, inland waterways, etc) and manufacturing (Make in India) etc.
Shares of companies operating in the capital goods sector rose across the board. Bharat Heavy Electricals (Bhel) (up 1.99%), Bharat Electronics (up 2.37%), Punj Lloyd (up 0.25%), Crompton Greaves (up 0.39%), BEML (up 0.91%), Siemens (up 1.4%), ABB (up 1.62%) and Thermax (up 2.89%) edged higher.
Brent crude oil futures edged higher yesterday, 27 February 2015, supported by an improving demand outlook and supply outages. The contract had advanced $2.53 a barrel or 4.21% to settle at $62.58 a barrel yesterday, 27 February 2015.
The Economic Survey 2014-15 tabled in parliament by Finance Minister Arun Jaitley yesterday, 27 February 2015, stated that India's economic growth will receive a boost in the short term from the cumulative impact of reforms, lower oil prices, likely monetary policy easing facilitated by lower inflation and improved inflationary expectations, and forecasts of a normal monsoon in 2015-16. The Economic Survey taking into consideration the change of base year by the Central Statistics Office of the National Accounts series from 2004-05 to 2011-12, states that GDP growth at market prices for 2015-16 is expected to be 8.1% to 8.5%. The growth rate in GDP at constant (2011-12) market prices in 2012-13 was 5.1%, which increased to 6.9% in 2013-14 and it is expected to further increase to 7.4% in 2014-15 (according to advanced estimates).
All eyes are now on Union Budget 2015-16. Finance Minister Arun Jaitley will begin his speech at 11:00 IST in Lok Sabha today, 28 February 2015, as he tables the Union Budget 2015-16 in the parliament. 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.
Analysts are awaiting further progress on the Goods and Services Tax (GST) during the ongoing Budget session of Parliament 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, US stocks ended lower yesterday, 27 February 2015, as US economic growth slowed more sharply than initially thought in the fourth quarter. The US economy grew a revised 2.2% in the final three months of 2014, mostly because companies restocked warehouse shelves at a slower pace than the government originally reported. Gross domestic product was marked down from an original estimate of 2.6%, Commerce Department said yesterday, 27 February 2015. For all of 2014, the US economy grew at a 2.4% clip, compared to 2.2% in 2013 and 2.3% in 2012.
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