Trading for the week began on a positive note as the key benchmark indices edged higher in early trade. The barometer index, the S&P BSE Sensex was currently up 77.82 points or 0.27% at 29,309.23. The market breadth indicating the overall health of the market was strong. Asian stocks were trading mixed today, 23 February 2015.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 89.41 crore on Friday, 20 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 204.85 crore on Friday, 20 February 2015, as per provisional data.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month February 2015 series to March 2015 series. The near month February 2015 derivatives contracts expire on Thursday, 26 February 2015.
The stock exchanges have decided to keep the stock market open on Saturday, 28 February 2015, just like any other normal trading session when the Finance Minister Arun Jaitley presents the first full-fledged Budget of the Narendra Modi government. Trading will start at 9:15 IST and conclude at 15:30 IST. Jaitley will begin his speech at 11:00 IST in Lok Sabha on 28 February 2015 as he tables the Union Budget 2015-16 in the parliament.
At 9:25 IST, the S&P BSE Sensex was up 77.82 points or 0.27% at 29,309.23. The index gained 113.19 points at the day's high of 29,344.60 in early trade. The index rose 18.85 points at the day's low of 29,250.26 in early trade.
The CNX Nifty was up 24.50 points or 0.28% at 8,858.10. The index hit a high of 8,867.95 in intraday trade. The index hit a low of 8,838.90 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 984 shares gained and 398 shares fell. A total of 40 shares were unchanged.
The BSE Mid-Cap index was up 42.78 points or 0.39% at 10,878.96. The BSE Small-Cap index was up 68.60 points or 0.6% at 11,494.84. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 159 crore by 09:15 IST.
Hindalco Industries gained 2.43% after the company won the Gare Palma IV/4 coal block in Chhatisgarh for Rs 3,001 per tonne, according to the results of e-Auction for Schedule II coal mines announced by the Ministry of Coal on Friday, 20 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.
Coal India (CIL) rose 0.73% after the company's Chairman & Managing Director (CMD) S Bhattacharya on Friday, 20 February 2015, said that the key issues that the coal miner is relying on to attain the 1 billion tonnes coal production target by 2019-20 are timely completion of three critical railway lines and timely land acquisition and green clearances. CIL had announced at the fag end of the trading session on Friday, 20 February 2015, that an amount of around Rs 6000 crore has been earmarked by CIL for railway and other infrastructure development for the year 2015-16. He further added that the process of identification of projects to share the balance quantity, to top up the 1 billion tonnes mark, is also underway. The two CIL subsidiaries Sambalpur based Mahanadi Coalfields and the Bilaspur based South Eastern Coalfields (SECL) are expected to play a pivotal role in CIL's quest of attaining the 1 billion tonnes production with 250 MTs and 240 MTs respectively.
Idea Cellular (up 1.86%) and Yes Bank (up 1.64%) edged higher and DLF (down 1.26%) and Jindal Steel & Power (JSPL) (down 3.3%) edged lower after the index maintenance sub-committee of India Index Services & Products (IISL) Friday, 20 February 2015, announced changes in the constituents of the 50-unit CNX Nifty index. IISL said Idea Cellular and Yes Bank will enter the Nifty index in place of DLF and JSPL with effect from 27 March 2015. Nifty based index mutual funds will have to rebalance their portfolio by including Idea Cellular and Yes Bank and exiting DLF and JSPL. An index fund is a passively managed mutual fund scheme in which the scheme's portfolio mirrors the index.
Jindal Steel & Power (JSPL) after market hours on Friday, 20 February 2015 in a clarification with regard to news item titled "JSPL Retains 2 Blocks, Hindalco Bags one" said that as per the information published in the website of Nominated Authority to the Central Government, Jindal Power, a subsidiary of JSPL has been declared as the successful bidder for the Coal Block of Gare Palma IV/2 and IV/3. However in respect of the Coal Block of Gare Palma IV/1 of JSPL, the company has not qualified for the e-auction round on the basis of initial price offer submitted by it, JSPL said.
Sesa Sterlite rose 1.75%. The company's subsidiary Bharat Aluminium Company (Balco) won the Gare Palma IV/1 coal block in Chhattisgarh for Rs 1,585 per tonne, according to the results of e-Auction for Schedule II coal mines announced by the Ministry of Coal on Saturday, 21 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.
ING Vysya Bank rose 1.45%. Kotak Mahindra Bank rose 1.32%. Both these private sector banks, separately, announced after market hours on Friday, 20 February 2015, that Competition Commission of India (CCI) has approved the proposed combination in the nature of merger of ING Vysya Bank with Kotak Mahindra Bank under Section 31 (1) of the Competition Act, 2002. Kotak Mahindra Bank and ING Vysya Bank had announced amalgamation of ING Vysya with Kotak in the ratio of 725 shares of Kotak for every 1,000 shares of ING Vysya.
Power Grid Corporation of India (PGCIL) rose 0.91%. The company on Saturday, 21 February 2015 said that its board of directors will meet on 4 March 2015, inter alia, to consider and approve the declaration of interim dividend for the financial year ending 31 March 2015.
The Budget session of parliament begins today, 23 February 2015, with the Address of President of India Pranab Mukherjee to the members of both the Houses of Parliament in the Central Hall of Parliament.
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 Saturday, 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 Budget session of Parliament will be held in two phases. The first phase will be from 23 February till 20 March and the second phase from 20 April till 8 May. There will be 20 working days during the first phase and 13 in the second phase.
The 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.
The Railway Budget 2015-16 will be tabled in the parliament by the rail minister Suresh Prabhu on Thursday, 26 February 2015. The Economic Survey will be tabled on Friday, 27 February 2015.
Asian stocks were trading mixed today, 23 February 2015. Key benchmark indices in Hong Kong and Indonesia fell by 0.02% to 0.05%. Key benchmark indices in Singapore, South Korea and Japan rose by 0.15% to 0.81%. Markets in China and Taiwan remained shut today, 23 February 2015 for the Lunar New Year holidays.
US stocks rallied on Friday, 20 February 2015 sending the S&P 500 and Dow Jones Industrial Average to record levels on news that eurozone ministers agreed to a four-month extension of Greece's bailout.
Investors will receive further clues on the central bank's assessment of the economy and the timing of a rate increase when Federal Reserve Chair Janet Yellen gives two days of testimony to Congressional finance committees starting tomorrow, 24 February 2015.
Euro-area finance ministers on Friday, 20 February 2015 reached an agreement intended to keep aid flowing to Greece for four months in return for a commitment to budget targets, buying time to work out the details of longer-term financing. Greece now has to provide a list of reform measures to euro zone by today, 23 February 2015 to secure financing. European finance chiefs will then decide whether the proposals go far enough or trigger another round of emergency negotiations this week. The Greek reform measures are still subject to validation by the International Monetary Fund, the European Central Bank and the European Commission, the institutions collectively known as the troika that Prime Minister Alexis Tsipras vowed not to recognize.
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