Index heavyweights ITC, HDFC and ICICI Bank led the upmove as key benchmark indices extended initial gains in morning trade. The market breadth indicating the overall health of the market was strong. The barometer index, the S&P BSE Sensex, was currently up 149.93 points or 0.51% at 29,285.81. Asian stocks edged higher amid speculation Greece will resolve its standoff with creditors.
Meanwhile, the yearly SBI Composite Index, a leading indicator for tracking primarily manufacturing activity in Indian economy, inched up to a 2-month high of 52.9 (moderate growth) in February 2015 from 52.1 (moderate growth) in January 2015.
Hero MotoCorp slipped on reports that the company's promoters are planning to sell part of their holding by offloading shares in the open market today, 18 February 2015. Index heavyweight and India's largest cigarette maker by sales ITC extended recent gains triggered by the company's recent announcement of the acquisition of two FMCG brands from Johnson & Johnson. Telecom stocks were mixed. Jaiprakash Associates rose after winning the Mandla North coal block in Madhya Pradesh.
Foreign portfolio investors sold shares worth a net Rs 182.80 crore during the previous trading session on Monday, 16 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 280.77 crore on Monday, 16 February 2015, as per provisional data. The stock market was closed yesterday, 17 February 2015, on account of Mahashivratri.
In overseas markets, Asian stocks edged higher amid speculation Greece will resolve its standoff with creditors. In the US, the S&P 500 eked out a small gain yesterday, 17 February 2015, to close at a record level for the second time this year, after reports emerged that Greece may ask for a six-month extension on its debt obligations.
In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude oil futures edged lower after previous session's gains. Global crude oil prices have bounced back over the past few days after a steep slide in prices over the past few months. The recent rebound in global crude oil prices will raise concerns pertaining to India's fiscal deficit, current account deficit and fuel price inflation. India imports about 80% of its crude oil requirements.
At 10:20 IST, the S&P BSE Sensex was up 149.93 points or 0.51% at 29,285.81. The index jumped 163.74 points at the day's high of 29,299.62, in morning trade. The index fell 8.97 points at the day's low of 29.126.91 at the onset of trading session.
The 50-unit CNX Nifty was up 39.20 points or 0.44% at 8,848.55. The index hit a high of 8,851.55 in intraday trade. The index hit a low of 8,808.90 in intraday trade.
The BSE Mid-Cap index was up 66.88 points or 0.62% at 10,804.87. The BSE Small-Cap index was up 104.03 points or 0.93% at 11,350.48. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,379 shares advanced and 734 shares declined. A total of 74 shares were unchanged.
Hero MotoCorp lost 3.68% to Rs 2,703 on reports that the company's promoters are planning to sell part of their holding by offloading shares in the open market today, 18 February 2015. As per reports, a promoter, Brijmohan Lall Munjal, is planning to sell 70 lakh shares, amounting to $300 million in open market today, 18 February 2015. The shares are offered at an indicative price band of Rs 2,664 to Rs 2,720 per share, a discount of 3.07% to 5.06% to the stock's closing price of Rs 2,806.25 on Monday, 16 February 2015. As per the shareholding pattern as on 31 December 2014, Brijmohan Lall Munjal holds 1.23 crore shares or 6.21% stake in Hero MotoCorp. The total promoter holding in Hero MotoCorp stood at 39.92% as on 31 December 2014.
Index heavyweight and India's largest cigarette maker by sales ITC extended recent gains triggered by the company's recent announcement of the acquisition of two FMCG brands from Johnson & Johnson. The stock was up 2.49% at Rs 399.25. The stock hit a high of Rs 401.90 and a low of Rs 385.50 so far during the trading session.
ITC said before market hours on Friday, 13 February 2015, that it entered into Asset Purchase Agreements (Agreements) with Johnson & Johnson, India and Johnson & Johnson Pte., Singapore on 12 February 2015, for purchase of 'Savlon' and 'Shower To Shower' trademarks and other intellectual property, respectively, primarily for use in India.
Another Index heavyweight HDFC was up 1.86% to Rs 1,312. The stock hit a high of Rs 1,314.50 and a low of Rs 1,289 so far during the trading session..
Telecom stocks were mixed. Idea Cellular (up 1.30%) and Tata Teleservices (Maharashtra) (up 1.14%) edged higher. Bharti Airtel (down 1.82%) and Reliance Communications (down 1.8%) edged lower. According to reports, Reliance Industries (RIL), Bharti Airtel, Reliance Communications, Idea Cellular, unlisted local unit of Vodafone Group Plc and Tata Teleservices have applied to participate in next month's auction for mobile phone airwaves. The deadline for submitting applications for the new auction ended on Monday, 16 February 2015.
Shares of Reliance Industries were currently almost unchanged for the day at Rs 902.40.
Jaiprakash Associates rose 2.63%. The company won the Mandla North coal block in Madhya Pradesh for Rs 2,505 per tonne, according to the results of e-Auction for Schedule II coal mines announced by the Ministry of Coal on Monday, 16 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.
Jaiprakash Power Ventures rose 7.18%. The company won the Amelia North coal block in Madhya Pradesh for Rs 712 per tonne, according to the results of e-Auction for Schedule II coal mines announced by the Ministry of Coal yesterday, 17 February 2015.
Sesa Sterlite fell 1.84%. The company's subsidiary Bharat Aluminium Company (Balco) won the Chotia coal block in Chhattisgarh for Rs 3,025 per tonne, according to the results of e-Auction for Schedule II coal mines announced by the Ministry of Coal on yesterday, 17 February 2015.
OCL Iron And Steel rose 13.95% The company won the Ardhagram coal block in West Bengal for Rs 2302 per tonne, according to the results of e-Auction for Schedule II coal mines announced by the Ministry of Coal on yesterday, 17 February 2015.
CESC fell 1.82%. The company said on Tuesday, 17 February 2015, that following an e-auction conducted by the Ministry of Coal, Government of India on 15 February 2015 and the results thereof since posted on the Ministry's website, CESC has submitted the closing bid of Rs 470 per metric tonne (MT) for Sarisatolli coal mine in the state of West Bengal. A formal letter to the company from the Ministry allocating the said mine is expected in due course, CESC said.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 62.24, compared with its close of 62.1575 during the previous trading session on Monday, 16 February 2015. The foreign exchange market was closed yesterday 17 February 2015, on account of Mahashivratri.
Brent crude oil futures edged lower after previous session's gains. Brent for April settlement was off 15 cents at $62.38 a barrel. The contract had risen $1.13 a barrel, or 1.84% to settle at $62.53 a barrel during the previous trading session on Tuesday, 17 February 2015.
Prime Minister Narendra Modi and former Mayor of New York City, Mr. Michael Bloomberg on Monday, 16 February 2015, announced a partnership between Bloomberg Philanthropies and the Ministry of Urban Development, Government of India (GoI) to advance the Smart Cities initiative in India. Under the partnership, Bloomberg Philanthropies will provide assistance to the Ministry of Urban Development to select cities for Smart Cities Mission funding on a continuous basis, the Prime Minister's Office (PMO) said in a statement. The Smart Cities initiative is a historic effort to promote economic growth, improve governance, and deliver more effective and efficient public services to India's urban residents, the PMO said.
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.
Asian stocks were trading higher, tracking gains in the US as fears eased over Greece leaving the eurozone. Key benchmark indices in Hong Kong, Indonesia, Japan and Singapore were up 0.16% to 0.99%.
The stock market in mainland China is closed for this entire week starting today, 18 February 2015, for the Lunar New Year holiday. The stock market in Hong Kong is open for trading for only half day today, 18 February 2015, and remains shut for the rest of the week for the Lunar New Year holiday.
The Bank of Japan (BoJ) on Wednesday, 18 February 2015, stood pat on its policy and painted a rosier picture of economic conditions, despite recent poor growth data and an inflation rate that is moving away from its 2% target. In its latest two-day policy meeting, the BOJ's policy board voted 8-1 to keep unchanged the size of the bank's annual asset purchases worth 80 trillion yen ($670 billion), its main tool to generate higher inflation.
The central bank signaled that it mostly believes that the Japanese economy has finally overcome a hit from the government's move to raise the sales tax. Specifically, the BOJ removed for the first time its reference to the tax increase from the main language in its monthly economic assessment.
"Japan's economy has continued its moderate recovery trend," the BOJ said in its policy statement. A month earlier, the bank said the economy was on a moderate recovery trend and that the effects of the tax increase had been waning on the whole.
Trading in US index futures indicated that the Dow could gain 10 points at the opening bell today, 18 February 2015. US stocks closed slightly higher Tuesday, 17 February 2015, as investors continued to monitor talks between Greece and its creditors in hopes that a deal will be reached to keep the country from falling out of the eurozone.
In Europe, Greece may reportedly request a six-month extension on its debt obligations. According to reports, the newly elected Greek Prime Minister Alexis Tsipras will today, 18 February 2015, request an extension on the country's loan agreement. Talks are continuing between Greece and its international creditors on the conditions that would be attached to the extension of the loan accord, according to reports. 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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