A range bound movement was witnessed as key benchmark indices hovered in positive zone in mid-morning trade after President of India Pranab Mukherjee began his speech addressing the members of both the Houses of Parliament in the Central Hall of Parliament to mark the beginning of the Budget session of the parliament. The barometer index, the S&P BSE Sensex was currently up 86.58 points or 0.3% at 29,317.99. The market breadth indicating the overall health of the market was positive.
Sesa Sterlite edged higher after the company's subsidiary Bharat Aluminium Company (Balco) won the Gare Palma IV/1 coal block in Chhattisgarh for Rs 1,585 per tonne. Shares of private bank were mixed while PSU bank stocks declined.
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 higher against the dollar.
Brent crude oil futures edged higher after euro zone finance ministers on Friday, 20 February 2015, agreed in principle to extend heavily indebted Greece's financial rescue by four months.
In overseas markets, Asian stocks edged higher after euro zone finance ministers on Friday, 20 February 2015, agreed in principle to extend heavily indebted Greece's financial rescue by four months. 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.
At 11:15 IST, the S&P BSE Sensex was up 86.58 points or 0.3% at 29,317.99. The index gained 131.55 points at the day's high of 29,362.96 in morning trade. The index rose 18.85 points at the day's low of 29,250.26 in early trade.
The CNX Nifty was up 17.05 points or 0.19% at 8,850.65. The index hit a high of 8,869 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 positive. On BSE, 1,287 shares gained and 1,043 shares fell. A total of 102 shares were unchanged.
The BSE Mid-Cap index was up 48.64 points or 0.45% at 10,884.82. The BSE Small-Cap index was up 74.14 points or 0.65% at 11,500.38. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 1306 crore by 11:15 IST, compared with turnover of Rs 896 crore by 10:15 IST.
Sesa Sterlite gained 2.74% to Rs 223.35. The stock hit high of Rs 223.65 and low of Rs 218 so far during the day. 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.
Cairn India fell 1.5%. 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. An official each of Cairn India, Reliance Industries, Reliance Power, Jubilant Energy and Essar group was arrested on Friday, 20 February 2015.
Meanwhile, with respect to media reports titled Crude Jolt: Cairn India Cuts 250 Jobs, Cairn India during market hours today, 23 February 2015, said that the company continues to focus on key projects to deliver on commitments while simultaneously working on resource optimization to drive efficiencies for value generation. As necessary, the company aligns working to enable a sustainable competitive business and deliver on business goals. This at times may include some realignment of the resources including human capital but at the same time ensuring that there is no impact on the performance or operations of the company, Cairn India said.
Shares of private bank were mixed while PSU bank stocks declined.
Among private bank stocks, HDFC Bank (up 0.23%), Axis Bank (up 0.5%) and ICICI Bank (up 0.79%) rose. IndusInd Bank shed 0.07%.
ING Vysya Bank rose 1.54%. Kotak Mahindra Bank rose 1.36%. 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 Bank.
Yes Bank rose 0.21%. 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.
Among PSU bank stocks, State Bank of India (SBI) (down 0.09%), Punjab National Bank (down 0.78%), Bank of Baroda (down 0.79%), Canara Bank (down 1.04%), Bank of India (down 0.61%) and Union Bank of India (down 0.72%) declined.
Finance Minister Arun Jaitley on Saturday, 21 February 2015, made an appeal to all the employees of public sector banks (PSBs) and their Unions & Associations not to resort to agitation approach by participating in bank strike. He informed the employees of PSBs that banks are already in negotiations with their Unions and Associations for wage settlement. Jaitley said that the bipartite negotiations in a cordial manner is the only available tool for settlement. Jaitley said that participating in the proposed strike is neither desirable nor affordable in the interest of the nation. Making an another appeal to the employees of PSBs, their Unions and Associations, the Finance Minister asked them not to resort to such disruptive means, and call off the call for strike. PSB employee unions have threatened to go on a four-day nation-wide strike beginning 25 February 2015 to press for their wage-related demands.
Rajesh Exports rose 2.3% after the company said it has secured an export order worth Rs 732 crore of designer range of gold and diamond studded jewellery and medallions from A1 Malek Jewellery, UAE. The new order was announced during market hours today, 23 February 2015.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.215, compared with its close of 62.23 during the previous trading session on Friday, 20 February 2015.
Brent crude oil futures edged higher after euro zone finance ministers on Friday, 20 February 2015, agreed in principle to extend heavily indebted Greece's financial rescue by four months. Brent for April settlement was up 23 cents at $60.45 a barrel. The contract had risen 1 cents 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.
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 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, he 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.
Asian stocks edged higher after euro zone finance ministers on Friday, 20 February 2015, agreed in principle to extend heavily indebted Greece's financial rescue by four months. Key benchmark indices in Hong Kong, Singapore, South Korea and Japan were up 0.01% to 0.73%. In Indonesia, the Jakarta Composite was off 0.13%. Markets in China and Taiwan remained shut for the Lunar New Year holidays.
Trading in US index futures indicated a flat opening of US stocks 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.
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.
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