After a range bound movement in early afternoon trade, key benchmark trimmed intraday losses in afternoon trade. The barometer index, the S&P BSE Sensex, was currently off 105.10 points or 0.36% at 29,357.17. The market breadth indicating the overall health of the market was positive.
Shares of public sector banks rose. Shares of private sector banks edged lower.
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 13:16 IST, the S&P BSE Sensex was down 105.10 points or 0.36% at 29,357.17. 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 33.10 points or 0.37% at 8,862.20. 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 49.55 points or 0.46% at 10,882.16. The BSE Small-Cap index was up 86.83 points or 0.76% at 11,461.59. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,448 shares advanced and 1,204 shares declined. A total of 118 shares were unchanged.
Bharat Electronics gained 0.35%. With respect to news titled "Bharat Electronics to set up Rs 500-crore weapon systems facility at Lepakshi", Bharat Electronics clarified during market hours that it confirms the content of the news. At the Aero India Show 2015 at Bangalore, there was a extempore interaction with the media by its management as a consequence of which the media has reported the news. There has not been any official press release by the company in this regard, Bharat Electronics said.
Coal India (CIL) was off 0.29% at Rs 384. The stock hit high of Rs 384.70 and low of Rs 377.55 so far during the trading session. 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.
Shares of private sector banks edged lower. Axis Bank (down 0.41%), City Union Bank (down 0.85%), ICICI Bank (down 1.7%), HDFC Bank (down 0.09%), and Kotak Mahindra Bank (down 0.11%), edged lower. ING Vysya Bank (up 0.1%), Yes Bank (up 0.79%), IndusInd Bank (up 1.35%), and Federal Bank (up 1.46%) edged higher.
Shares of public sector banks rose. Bank of Baroda (up 3.53%), Allahabad Bank (up 2.47%), Indian Bank (up 3.9%), United Bank of India (up 2%), Syndicate Bank (up 4.09%), Punjab National Bank (up 1.3%), Canara Bank (up 2%), Bank of India (up 2.84%), State Bank of India (up 0.66%), Andhra Bank (up 2.67%), Central Bank of India (up 0.67%), UCO Bank (up 2.91%) and IDBI Bank (up 6.78%), Vijaya Bank (up 1.43%), Punjab and Sind Bank (up 1.55%), Corporation Bank (up 2.31%), Bank of Maharashtra (up 1%) and Dena Bank (up 1.45%), edged higher.
Union Bank of India rose 3.21%. The state-run bank during market hours said that the bank intends to raise capital funds through issuance of additional Tier 1 Bonds. In this regard, CRISIL Ratings has assigned "CRISIL AA (CRISIL Double A)" rating to the bank's proposed Basel III Compliant Tier 1 Perpetual Bonds of Rs 2000 crore. The outlook assigned is negative. CRISIL has also revised its rating outlook on the long-term debt instruments to 'Negative' from 'Stable' and reaffirmed the ratings at 'CRISIL AAA' and reaffirmed its ratings on the bank's Certificates of Deposit programme at 'CRISIL A1+'.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.23, 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 30 cents at $60.51 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 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 7 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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