A rangebound movement was witnessed as key benchmark indices retained positive zone in morning trade. The barometer index, the S&P BSE Sensex, was currently up 117.52 points or 0.40% at 29,437.78. The market breadth indicating the overall health of the market was positive. Crude oil prices extended losses registered during the previous trading session.
Realty shares edged higher. Bharat Forge jumped after signing a multi-year contract with Boeing Commercial Airplane.
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.
Earlier, the Sensex and the CNX Nifty, both, hit their highest levels in almost three weeks in early trade.
Brent crude oil futures edged lower on reports that crude inventories jumped in the United States last week. 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.
In overseas markets, 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.
At 10:16 IST, the S&P BSE Sensex was up 117.52 points or 0.4% at 29,437.78. The index jumped 149.60 points at the day's high of 29,469.86 in early trade, its highest level since 30 January 2015. 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 24.10 points or 0.27% at 8,893.20. The index hit a high of 8,902.90 in intraday trade, its highest level since 30 January 2015. The index hit a low of 8,879.10 in intraday trade.
The BSE Mid-Cap index was up 49.10 points or 0.45% at 10,877.51. The BSE Small-Cap index was 80.69 points or 0.71% at 11,444.61. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,254 shares advanced and 908 shares declined. A total of 77 shares were unchanged.
Realty shares were trading higher. Prestige Estates (up 6.92%), Godrej Properties (up 2.60%), Sunteck Realty (up 1.26%), D B Realty (up 1.23%), Peninsula Land (up 0.85%), Sobha (up 0.53%), Oberoi Realty (up 0.33%), Unitech (up 0.27%) and DLF (up 0.23%), edged higher. Phoenix Mills (down 0.02%), Indiabulls Real Estate (down 0.62%), Anant Raj (down 1.22%), Housing Development and Infrastructure (HDIL) (down 1.79%) and Parsvnath Developers (down 4.7%), edged lower.
Bharat Forge rose 3.82%. The company announced after market hours yesterday, 18 February 2015, that it has signed a multi-year contract with Boeing Commercial Airplane to supply titanium forgings for wing components for the next-generation 737 and 737 MAX. Under the agreement, Bharat Forge will begin supplying pre machined forgings from its facilities in Pune and Baramati to Boeing during Q1 June 2016.
Escorts rose 1.10%. The company announced after market hours yesterday, 18 February 2015, signing of a partnership with DLL Group's Indian subsidiary (De Lage Landen Financial Services India) to launch Escorts Credit which will provide retail tractor loans to Escorts customers with convenient and fast loan options. This agreement between Escorts and DLL, a fully owned subsidiary of the Netherlands headquartered Rabobank -- one of the world's leading banks in the food and agricultural sector, will help Indian farmers, who wish to purchase Escorts tractors, by providing easy and quick finance with customised repayment options linked to their income cycles.
Tata Communications rose 0.39%. With respect to news article titled "The company to sell 0.9 acre land in Mahim by year end. JLL to manage land sale. company to sell land to monetize assets," Tata Communications clarified after market hours yesterday, 18 February 2015, that unlocking the value of unutilised assets, is one of the avenues that the company has been exploring as it continually looks at various ways to optimise operational efficiency.
Raymond rose 0.28%. The company announced after market hours yesterday, 18 February 2015, that 24,290 shares of J. K. Investor (Bombay) and 9,996 shares of Smart Investments, two promoter group companies who collectively hold (directly/indirectly) approximately 37.17% of the shares of Raymond, has been transferred to Mr Gautam Hari Singhania (son of Dr. Vijaypat Singhania) being immediate relatives forming part of the Promoter Group of Raymond. In letter dated 9 February 2015, Dr. Vijaypat Singhania, the Promoter of Raymond had informed the company of his intention to transfer shares of certain promoter group companies which hold directly and indirectly shares of Raymond. Further Raymond has informed that, these transfers are proposed to be affected by way of gift from Dr. Vijaypat Singhania to Mr. Gautam Hari Singhania. This would help in maintaining continuity of management and align ownership interest.
Brent crude oil futures edged lower on reports that crude inventories jumped in the United States last week. Brent for April settlement was off $1.04 a barrel at $59.49 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 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, Japanese stocks edged 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 0.46%. Most other Asian markets were closed for a holiday. Chinese markets are closed for Lunar New Year holiday.
Trading in US index futures indicated that the Dow could fall 14 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.
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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