Metal shares led the decline as key indices edged lower on the first trading session of the week. The barometer index, the S&P BSE Sensex, fell below the psychological 29,000 mark in late trade as the two key benchmark indices -- the Sensex and the 50-unit CNX Nifty -- extended losses in late trade. The Sensex and the Nifty, both, hit their lowest level in more than a week. Reliance Industries, Cairn India and shares of Reliance ADA and Jubilant Group companies dropped after one official each of Cairn India, Reliance Industries, Reliance Power, Jubilant Energy and Essar group was arrested by Delhi police on Friday, 20 February 2015, as part of investigations of an alleged scam to steal documents from the oil ministry to sell to consultants and private companies. Shares of index heavyweights ITC, HDFC and Infosys dropped.
The market breadth indicating the overall health of the market was negative. The Sensex was provisionally off 296.26 points or 1.01% at 28,935.15. Realty stocks declined.
In his annual speech to mark the beginning of the Budget session of parliament, President of India Pranab Mukherjee today, 23 February 2015, said addressing the members of both the Houses of Parliament that the fundamental tenet of this government is 'sabka saath, sabka vikas' which means taking everyone along and development for all.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 89.41 crore during the previous trading session 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.
In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude oil futures edged lower on worries about oversupply in North America.
In overseas markets, European shares rose after euro zone finance ministers on Friday, 20 February 2015, agreed in principle to extend heavily indebted Greece's financial rescue by four months. Asian stocks edged higher in choppy trade. 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.
As per provisional closing, the S&P BSE Sensex was down 296.26 points or 1.01% at 28,935.15. The index lost 318.25 points at the day's low of 28,913.16 at the fag end of the trading session, its lowest level since 13 February 2015. The index gained 131.55 points at the day's high of 29,362.96 in morning trade.
The CNX Nifty was down 78.65 points or 0.89% at 8,754.95. The index hit a low of 8,736.10 in intraday trade, its lowest level since 13 February 2015. The index hit a high of 8,869 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,697 shares fell and 1,199 shares rose. A total of 120 shares were unchanged.
The BSE Mid-Cap index was off 90.76 points or 0.84% at 10,745.42. The BSE Small-Cap index was off 36.76 points or 0.32% at 11,389.48. The fall in these two indices was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 3556 crore, lower than turnover of Rs 3715.63 crore during the previous trading session on Friday, 20 February 2015.
Index heavyweight and cigarette major ITC lost 1.41% to Rs 390.30. The stock hit high of Rs 398.70 and low of Rs 389.30
Housing finance major HDFC dropped 1.83% to Rs 1,308.95. The stock hit high of Rs 1,337.30 and low of Rs 1,306.50.
Index heavyweight Reliance Industries fell 2.8% at Rs 848.80. The stock hit high of Rs 876.40 and low of Rs 846.65
Delhi police crime branch on Friday, 20 February 2015, arrested officials from five companies and others as part of investigations of an alleged scam to steal documents from the oil ministry to sell to consultants and private companies. One official each of Cairn India, Reliance Industries, Reliance Power, Jubilant Energy and Essar group was arrested on Friday, 20 February 2015.
Tata Power Company slipped 1.28% to Rs 84.85. The stock was volatile. The stock hit high of Rs 87.80 and low of Rs 84.55. Tata Power during market hours today, 23 February 2015, announced that it has signed a memorandum of Understanding (MoU) with Siberian Coal Energy Company (SUEK) to develop opportunities in the energy sector. As part of the agreement, Tata Power Company and SUEK will cooperate on identifying and targeting opportunities in the energy sector in Russia and other geographies of common interest in order to develop mutually beneficial transactions, Tata Power Company said.
Crompton Greaves fell 2.58%. The company during market hours today, 23 February 2015, announced that the company has bagged an order from PT PLN for setting up a total of 36 transformer bays around Indonesia, valued at around $20 million. This project is being funded by IBRD - World Bank and is aimed at enhancing the performance of PT PLN's Transmission Grid, Crompton Greaves said.
Realty stocks declined. DLF (down 3.14%), Housing Development and Infrastructure (down 6.22%), Indiabulls Real Estate (down 4.21%), D B Realty (down 4.51%), Unitech (down 4.62%), Godrej Properties (down 0.15%) edged lower. Sobha (up 6.51%), Oberoi Realty (up 8.21%) gained.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 62.2375, compared with its close of 62.23 during the previous trading session on Friday, 20 February 2015.
Brent crude oil futures edged lower on worries about oversupply in North America. Brent for April settlement was off 37 cents at $59.85 a barrel. The contract had risen 1 cent to settle at $60.22 a barrel during the previous trading session on Friday, 20 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.
The Railway Budget 2015-16 will be tabled in the parliament by rail minister Suresh Prabhu on Thursday, 26 February 2015. The Economic Survey will be tabled on Friday, 27 February 2015.
In his annual speech to mark the beginning of the Budget session of parliament, President Pranab Mukherjee today, 23 February 2015, said that "Sab ka Saath, Sab ka Vikas (taking everyone along, development for all)" is this government's fundamental tenet. In his speech to both houses of Parliament, Mukherjee said that within a span of 9 months, the government has articulated and embarked on a comprehensive strategy for unleashing the full potential of the country and its precious resource of 125 crore people. Education is the priority of priorities for the government. 'Padhe Bharat Badhe Bharat' has been launched to improve foundational learning outcomes. The government is committed to provide housing for all by 2022. The government is building modern infrastructure and facilities in urban areas. The National Urban Development Mission is being finalised and Smart City programme is close to finalisation.
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. On the eve of the beginning of the Budget session of parliament, the Minister of Parliamentary Affairs Venkaiah Naidu yesterday, 22 February 2015, said the government is willing to address concerns if any, on the Land Acquisition Ordinance. Several state governments cutting across party line have expressed difficulties in land acquisition for development projects under the Act of 2013 and sought modifications. Subsequently, the central government sought to facilitate land acquisition for notified purposes like infrastructure and affordable housing projects etc., in an easy manner without compromising on the remuneration to be paid to farmers and rehabilitation measures to be taken up for displaced persons, Naidu said. The government is ready to address apprehensions, if any in this regard, Naidu said.
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 higher today, 23 February 2015, after euro zone negotiators agreed to extend Greece's financial rescue package. Key benchmark indices in France and Germany were up 0.35% to 0.44%. In UK, the FTSE 100 shed 0.18%.
German business confidence improved to the highest level in seven months in February, easing concerns over the health of the euro zone's largest economy, industry data showed today, 23 February 2015. In a report, the German research institute, Ifo said its Business Climate Index rose to a seasonally adjusted 106.8 this month, up from a reading of 106.7 in January.
Euro zone ministers late on Friday, 20 February 2015 agreed to extend Greece's financial rescue package by four months. Greece had asked for a six-month extension, but the financial markets still drew some relief as the agreement removed the immediate threat of its exit from the single currency bloc after weeks of difficult and often predictable negotiations. Greece now has to submit to the Eurogroup today, 23 February 2015 a list of reforms it plans to implement during the remainder of the bailout period, which needs the approval from the troika comprised of the European Commission, the European Central Bank and the IMF.
Asian stocks edged higher in choppy trade today, 23 February 2015, buoyed by a bailout deal between Greece and the euro zone last week. Key indices in Hong Kong, South Korea, Japan and Indonesia were up 0.02% to 0.73%. Markets in China and Taiwan remained shut for the Lunar New Year holidays. In Singapore, the Straits Times index fell 0.42%.
Trading in US index futures indicated that the Dow may fall 29 points at opening bell today, 23 February 2015. 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.
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