After languishing in negative zone in morning trade, key benchmark trimmed losses in mid-morning trade. The barometer index, the S&P BSE Sensex, was currently off 156.61 points or 0.53% at 29,305.66. The market breadth indicating the overall health of the market was positive. Index heavyweights ICICI Bank, Reliance Industries and HDFC dropped. Another index heavyweight ITC edged higher.
Reliance Industries edged lower on reports that the Delhi police yesterday, 19 February 2015, arrested five people and detained an employee of Reliance Industries among a number of other individuals on charges of leaking secret documents of Ministry of Petroleum & Natural Gas. Sugar stocks rose after the Cabinet Committee on Economic Affairs (CCEA) yesterday, 19 February 2015, approved the continuation of the incentive scheme for marketing and promotion services of raw sugar production during current sugar season 2014-15 (October-September) for a quantity of 14 lakh metric tonnes. Most capital goods shares were trading higher. Lypsa Gems & Jewellery jumped after bagging an export order.
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, 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.
At 11:22 IST, the S&P BSE Sensex was down 156.61 points or 0.53% at 29,305.66. 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 was down 46.25 points or 0.52% at 8,849.05. 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 53.01 points or 0.49% at 10,885.62. The BSE Small-Cap index was up 75.23 points or 0.66% at 11,449.99. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,331 shares advanced and 1,016 shares declined. A total of 92 shares were unchanged.
Reliance Industries edged lower on reports that the Delhi police yesterday, 19 February 2015, arrested five people and detained an employee of Reliance Industries among a number of other individuals on charges of leaking secret documents of Ministry of Petroleum & Natural Gas. The stock was off 2.4% at Rs 879.20. The stock hit high of Rs 897 and low of Rs 872.20 so far during the trading session.
According to reports, the Delhi Police crime branch yesterday, 19 February 2015, unearthed a corporate espionage racket following the arrest of five 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.
Sugar stocks rose after the Cabinet Committee on Economic Affairs (CCEA) yesterday, 19 February 2015, approved the continuation of the incentive scheme for marketing and promotion services of raw sugar production during current sugar season 2014-15 (October-September) for a quantity of 14 lakh metric tonnes (MT). Upper Ganges Sugar & Industries (up 5.88%), Dwarikesh Sugar Industries (up 4.91%), Shree Renuka Sugar (up 3.99%), Sakthi Sugars (up 3.95%), Triveni Engineering & Industries (up 3.70%), KCP Sugar & Industries Corporation (up 3.37%), Balrampur Chini Mills (up 2.86%), Bajaj Hindusthan (up 2.63%), Oudh Sugar Mills (up 2.53%), EID Parry (India) (up 1.52%), Dhampur Sugar Mills (up 1.41%), Eastern Sugar & Industries (up 0.78%) and Simbhaoli Sugars (up 0.62%), edged higher. Rana Sugars (down 0.64%), DCM Shriram Industries (down 1.06%) and Empee Sugars and Chemicals (down 2.78%), edged lower.
The CCEA further approved fixed uniform rate of Rs 4,000 per MT for 2014-15 sugar season. As the quantity is fixed, settlement of claims will be prioritized on the basis of the date of export/deemed export as certified by concerned Customs and Excise authorities, a government statement said. The decision will help sugar mills to clear the cane price dues of the farmers, a government statement said. Other conditions will remain the same, as were last year except that in case of mills having alcohol production capacities, the incentive would be available if they offer to supply ethanol to PSU OMCs under the ethanol blending programme upto 25% of their annual production level of alcohol.
Most capital goods shares were trading higher. Suzlon Energy (up 3.39%), Crompton Greaves (up 3.21%), Bharat Heavy Electricals (up 2.66%), Punj Lloyd (up 1.63%), Lakshmi Machine Works (up 1.54%), Havells India (up 1.12%), Bharat Electronics (up 0.93%), Praj Industries (up 0.91%), ALSTOM India (up 0.90%), Pipavav Defence and Offshore Engineering Company (up 0.63%), AIA Engineering (up 0.62%), Thermax (up 0.57%), SKF India (up 0.34%) and ABB (up 0.05%), edged higher. Siemens (down 0.28%), BEML (down 0.55%), Alstom T&D India (down 0.61%), Larsen & Toubro (down 0.65%) and Jindal Saw (down 2.46%), edged lower.
Lypsa Gems & Jewellery jumped 8.96% after the company during market hours today, 20 February 2015, said it has bagged an export order worth Rs 32 crore for the supply of polished diamonds from its UAE based customers. The latest export order will be executed over a time span of 12 months. The UAE based customers intend to fulfill their jewellery orders using these polished diamonds, the company said in a statement.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.2475, 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 44 cents at $60.65 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, stocks in Japan and Indonesia edged higher as most other Asian markets remained closed for holiday. In Japan, the Nikkei 225 was up 0.34%. Indonesia's Jakarta Composite was up 0.56%. Chinese markets are closed for Lunar New Year holiday.
Trading in US index futures indicated that the Dow could fall 5 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.
In Europe, the impasse between Greece and is creditors continued, after Germany rejected Greece's request for a six-month loan extension agreement. The full Eurogroup of eurozone finance ministers is scheduled to meet again today, 20 February 2015. 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.
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