A strong rebound during the latter part of the trading session took key benchmark into the green from red in what a choppy trading session. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their highest level in almost three weeks after news reports filtered in that Greece has submitted a formal request for a loan extension. Metal and power generation stocks rose. Index heavyweights HDFC, Infosys, TCS and L&T edged higher. Three other index heavyweights Reliance Industries, HDFC Bank and ICICI Bank staged intraday rebound. The market breadth indicating the overall health of the market was negative.
The Sensex was provisionally up 144.06 points or 0.49% to 29,464.32. Crude oil prices extended losses registered during the previous trading session after weekly data showed US crude inventories have built up much faster than expected.
Foreign portfolio investors bought shares worth a net Rs 2187.96 crore yesterday, 18 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 327.87 crore yesterday, 18 February 2015, as per provisional data.
Volatility ruled the roost on the bourses today, 19 February 2015. Initial gains took the Sensex and Nifty to their highest levels in almost three weeks. Later, these two key benchmark indices slipped into the red in mid-morning trade. High intraday volatility was witnessed as the key benchmark indices extended losses in mid-afternoon trade. A strong rebound materialized during the last one hour of the trading session after news reports filtered in that Greece has submitted a formal request for a loan extension.
Brent Crude futures extended losses registered during the previous trading session after weekly data showed US crude inventories have built up much faster than expected. Lower global crude oil prices and deregulation of diesel price announced by the Indian government in October 2014 will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. Lower global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. On 15 February 2015, Indian Oil Corporation announced increase in petrol price by 82 paise per litre in Delhi (including state levies) and diesel price by 61 paise per litre.
India's bonds and currency markets were closed today, 19 February 2015, for a public holiday.
In overseas markets, European stocks moved into the green from red after Greece submitted a formal request for a loan extension. Japanese stocks edged higher, helped by gains in financial and shipping companies, and as Sony Corp jumped on a well-received business plan. US stocks ended marginally lower yesterday, 18 February 2015, as investors wrestled with interpreting minutes from the Federal Reserve's latest policy meeting.
As per provisional closing, the S&P BSE Sensex was up 144.06 points or 0.49% to 29,464.32. The index jumped 202.60 points at the day's high of 29,522.86 in late trade, its highest level since 30 January 2015. The index fell 212.11 points at the day's low of 29,108.15 in the mid-afternoon trade, its lowest level since 16 February 2015.
The CNX Nifty was up 26.20 points or 0.30% at 8,895.30, as per provisional closing. The index hit a high of 8,913.45 in intraday trade, its highest level since 30 January 2015. The index hit a low of 8,794.45 in intraday trade, its lowest level since 16 February 2015.
The BSE Mid-Cap index was up 4.20 points or 0.04% at 10,832.61. The BSE Small-Cap index was up 10.84 points or 0.10% at 11,374.76. Both theses indices underperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,504 shares advanced and 1,384 shares declined. A total of 101 shares were unchanged.
The total turnover on BSE amounted to Rs 3861 crore, lower than turnover of Rs 4162.06 crore during the previous trading session.
Engineering and construction major Larsen & Toubro rose 2.65% to Rs 1,708.20. The stock hit a high of Rs 1,710 and a low of Rs 1,662.50.
IT major Infosys rose 1.27% to Rs 2,325. The stock hit a high of Rs 2,333.90 and a low of Rs 2,292.
Reliance Industries was up 0.01% to Rs 901.50. The stock hit a high of Rs 907.15 and a low of Rs 887.55.
Housing finance major HDFC rose 1.64% to Rs 1,348. The stock hit a high of Rs 1,357 and a low of Rs 1,324.
HDFC Bank rose 0.73% to Rs 1,082.80. The stock hit a high of Rs 1,085 and a low of Rs 1,064.
ICICI Bank trimmed losses. The stock was down 0.73% to Rs 339.80. The stock hit a high of Rs 344 and a low of Rs 332.10.
Jewellery stocks were in demand. Gitanjali Gems (up 2.95%), PC Jeweller (up 2.74%), Shree Ganesh Jewellery House (up 2.51%) and Classic Diamonds (up 0.50%), edged higher.
Titan Company rose 0.89%. The company announced during trading hours that with the latest Reserve Bank of India (RBI) circular, it will be able to avail credit from domestic nominated banks for gold purchases without restrictions. This will also result in the company getting the benefits of natural hedging of gold fully with a possibility of negative working capital that the company enjoyed before the curbs were put in place in mid 2013, the company said.
In a clarification issued with respect to the norms on gold imports in India, the Reserve Bank of India (RBI) yesterday, 18 February 2015, said that nominated banks are permitted to import gold on consignment basis and that banks are free to grant gold metal loans. All sale of gold domestically will, however, be against upfront payments, the RBI said.
While the import of gold coins and medallions will no longer be prohibited, pending further review, the restrictions on banks in selling gold coins and medallions are not being removed, the RBI said. The RBI also clarified that Star and Premier Trading Houses (STH/PTH) can import gold on DP basis as per entitlement without any end use restrictions.
Brent Crude futures extended losses registered during the previous trading session after weekly data showed US crude inventories have built up much faster than expected. Brent for April settlement was off $1.61 a barrel at $58.92 a barrel. The contract had lost $2 a barrel or 3.19% to settle at $60.53 a barrel during the previous trading session. The latest data showed US crude supplies for the week ended 13 February 2015 saw a whopping 14.3 million-barrel jump from a week earlier, according to the American Petroleum Institute.
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, European stocks revered initial losses today, 19 February 2015, after Greece submitted a formal request for a loan extension. Key benchmark indices in Germany, France and UK were up 0.02% to 0.33%.
Greece has submitted a formal request for a loan extension, Eurogroup President Jeroen Dijsselbloem said today, 19 February 2015. Greece is asking for a six-month extension, Dijsselbloem wrote on a post to Twitter, according to reports. According to reports, senior eurozone finance ministers are expected to discuss Greece's request for a loan extension today, 19 February 2015. Greece has been making a distinction between a loan agreement and its bailout program, which is scheduled to end later this month.
Meanwhile, the European Central Bank yesterday, 18 February 2015, approved a request from Greece's central bank to lend 68.3 billion euro to its country's banks through an emergency credit facility.
In France, the latest data showed that consumer prices fell further than expected in January. France's consumer price index dropped 1% in January from December and was 0.4% lower on the year, statistics agency Insee said.
In Asia, Japanese stocks settled higher, helped by gains in financial and shipping companies, and as Sony Corp jumped on a well-received business plan. The Nikkei 225 average was up 0.36%. Most other Asian markets were closed for a holiday. Chinese markets are closed for Lunar New Year holiday.
Japan's exports continued to rebound in January while imports shrank. Exports for the month grew 17% from a year ago, according to data released Thursday by the Ministry of Finance. Imports decreased 9% as the price tag for inbound shipments of crude oil was dramatically smaller. The trade balance came to a deficit of 1.18 trillion yen, marking the 31st straight month of shortfalls.
Trading in US index futures indicated that the Dow could fall 20 points at the opening bell today, 19 February 2015. US market ended slightly lower yesterday, 18 February 2015, after a drop in energy shares but declines were limited by minutes from the latest Federal Reserve meeting, which showed policymakers were concerned that a premature rise in interest rates could hurt US economic growth and the recovery in the labour market.
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