Amid uncertainty over Greece's future in the eurozone, key equity benchmark indices in India edged lower on the last trading session of the week. Benchmark indices witnessed high intraday volatility during the trading session. Index heavyweight Reliance Industries (RIL) edged lower on reports that the Delhi police is interrogating an employee of the company among other persons in connection with a probe into alleged leak of petroleum ministry documents to corporates. The barometer index, the S&P BSE Sensex, was provisionally off 246.19 points or 0.84% to 29,216.08. The market breadth indicating the overall health of the market was positive.
Key indices today, 20 February 2015, snapped a seven-day winning streak.
Meanwhile, Finance Minister Arun Jaitley is likely to slash the government's expenditure on subsidies by 20% for 2015-16 when he presents the Union Budget 2015-16 in parliament on 28 February 2015, according to reports.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 1542.70 crore yesterday, 19 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 195.74 crore yesterday, 19 February 2015, as per provisional data.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged higher on expectations that data later in the day would show a continuing decline in the US oil rig count, a clear sign of the pressure the tumble in crude is putting on oil producers.
In overseas markets, European shares edged lower as investors awaited the outcome of a meting of eurozone finance ministers later in the global day today, 20 February 2015, to discuss Greece's request of a loan extension after Germany yesterday, 19 February 2015, rejected the Greek government's proposal. Stocks in Japan and Indonesia edged higher as most other Asian markets remained closed for holiday. US stocks ended mostly lower in thinly-traded session yesterday, 19 February 2015, as investors grappled with a drop in oil prices and a continued impasse between Greece and its creditors over loans.
As per provisional closing, the S&P BSE Sensex lost 246.19 points or 0.84% to 29,216.08. The index fell 284.01 points at the day's low of 29,178.26 in morning trade. The index fell 0.18 points at the day's high of 29,462.09 at the onset of trading session.
The 50-unit CNX Nifty fell 67.10 points or 0.75% at 8,828.20, as per provisional closing. The index hit a low of 8,816.30 in intraday trade. The index hit a high of 8,899.95 in intraday trade.
The BSE Mid-Cap index was up 3.57 points or 0.03% at 10,836.18. The BSE Small-Cap index was up 51.48 points or 0.45% at 11,426.24. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,490 shares advanced and 1,430 shares declined. A total of 112 shares were unchanged.
The total turnover on BSE amounted to Rs 3693 crore, lower than turnover of Rs 3876.13 crore during the previous trading session.
Index heavyweight ITC rose 2.03% to Rs 397. The stock hit a high of Rs 397.65 and a low of Rs 384.45 in intraday trade.
Coal India (CIL) fell 0.93% to Rs 381.50. The stock hit high of Rs 385 and low of Rs 377.55 during the trading session. The company and its subsidiaries are proposing to invest around Rs 6000 crore in 2015-16 towards capital expenditure. Further, an amount of around Rs 6000 crore has been earmarked by CIL for railway and other infrastructure development for the year 2015-16, CIL said in a statement during market hours.
With respect to news titled "CIL Pulled Up for 'Unfair Biz Practices, Coal India clarified during market hours that CIL is preparing to approach Competition Appellate Tribunal (COMPAT) to challenge this order within the statutory period of limitation. Media reports had suggested recently that the Competition Commission of India (CCI) has taken Coal India to task for abusing its dominant position and asked it to cease unfair business practices.
Separately, the company announced during trading hours that its board of directors approved roadmap for achieving 1 billion tonne of coal production by 2019-20 by the company and its subsidiaries alongwith technological plan. In a separate announcement, Coal India said its board will meet on 27 February 2015 to consider payment of interim dividend, if any, for the year 2014-15.
UltraTech Cement fell 1.45% to Rs 3,015.The company won the Bicharpur coal block in Madhya Pradesh for Rs 3,003 per tonne, according to the results of e-Auction for Schedule II coal mines announced by the Ministry of Coal yesterday, 19 February 2015. 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.
UltraTech Cement during trading hours confirmed that it won Bicharpur coal block and said that it will commence mining operations from the block from FY 2018.
Index heavyweight Reliance Industries (RIL) edged lower on reports that the Delhi police is interrogating an employee of the company among other persons in connection with a probe into alleged leak of petroleum ministry documents to corporates. The stock was off 3.15% at Rs 873. The stock hit a high of Rs 897 and a low of Rs 872 in intraday trade.
According to reports, the Delhi Police crime branch yesterday, 19 February 2015, unearthed a corporate espionage racket and it has so far arrested seven persons who allegedly leaked confidential documents of the Ministry of Petroleum & Natural Gas. Meanwhile, the Government of India has reportedly launched a massive investigation into the alleged leak of top-secret documents to certain independent consultants and energy companies.
IT shares edged lower on lingering concerns about waning overseas interest in the sector. MindTree (down 2.24%), HCL Technologies (down 1.97%), Infosys (down 1.91%), Wipro (down 1.55%), Oracle Financial Services Software (down 0.95%), Tech Mahindra (down 0.76%), TCS (down 0.74%) and CMC (down 0.46%), edged lower. Hexaware Technologies (up 0.13%), and MphasiS (up 0.53%), edged higher.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.255, compared with its close of 62.34 during the previous trading session on Wednesday, 18 February 2015. The foreign exchange market was closed yesterday, 19 February 2015, for a bank holiday.
Brent crude oil futures edged higher on expectations that data later in the day would show a continuing decline in the US oil rig count, a clear sign of the pressure the tumble in crude is putting on oil producers. Brent for April settlement was up 20 cents at $60.01 a barrel. The contract had lost 32 cents or 0.53% to settle at $60.21 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, European shares edged lower today, 20 February 2015, as investors awaited the outcome of a meting of eurozone finance ministers later in the global day today, 20 February 2015, to discuss Greece's request of a loan extension after Germany yesterday, 19 February 2015, rejected the Greek government's proposal. Key benchmark indices in France and Germany were off 0.28% to 0.32%. In UK, the FTSE 100 was up 0.05%.
Germany yesterday, 19 February 2015, rejected Greece's request to extend its bailout program, setting up a complicated round of negotiations among eurozone governments. Time is running out for Greece as its 240 billion ($273 billion) bailout expires at the end this month, leaving the government without financing and its banks at risk of being completely cut off from the lending facilities of the European Central Bank.
Meanwhile, Eurozone February composite Purchasing Managers' Index (PMI) was reported at 53.5. Eurozone February flash services PMI was reported at 53.9. Eurozone February flash manufacturing PMI was reported at 51.1.
In Asia, stocks in Japan and Indonesia edged higher as most other Asian markets remained closed for holiday. In Japan, the Nikkei 225 settled 0.37% higher after hitting 15-year high in intraday trade. Indonesia's Jakarta Composite was up 0.57%. Chinese markets are closed for Lunar New Year holiday.
Trading in US index futures indicated that the Dow could fall 6 points at the opening bell today, 20 February 2015. US stocks ended Thursday's thinly-traded session mostly lower, as investors grappled with a drop in oil prices and a continued impasse between Greece and its creditors over loans. Meanwhile, mixed economic reports stoked uncertainty about the Federal Reserve's timetable for hiking rates.
Economic data in the US on Thursday was mixed. Weekly jobless claims report was better than expected. Meanwhile, leading US economic indicators edged up in January but the index pointed to some moderation in growth. Philadelphia Fed index disappointed, pointing the economy might have hit a soft patch.
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