Market may extend gains

The market may extend previous sessions' gains on strong Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 70 points at the opening bell. Japanese stocks led Asian markets higher today, 19 December 2014, after US stocks boasted its biggest two-day advance since late 2011 yesterday, 18 December 2014, amid relief the Federal Reserve was in no rush to start hiking interest rates.

Among corporate news, NTPC said its board will meet on 23 December 2014, to consider a proposal for issuing bonus debentures to its members, as the company has entered its 40th year of operations and is keen to reward its members for their continued support. These bonus debentures may be issued through a scheme of arrangement under Section 391-394 of Companies Act, 1956, subject to approval of the Board and receipt of requisite approvals under applicable laws.

The Reserve Bank of India advised that Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) can now invest up to 100% of the paid up capital of Crompton Greaves under the Portfolio Investment Scheme (PIS). The Reserve Bank has stated that the company has passed resolutions at its Board of Directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs/RFPIs. The purchases could be made through primary market and stock exchanges and would be subject to Regulation 5(2) of FEMA Notification No.20/2000-RB dated 3 May 2000 (as amended from time to time) and other terms and conditions stipulated by the Reserve Bank.

With respect to news article titled "Leyland puts German arm Albonair for sale to cut debt" Kotak Mahindra Bank after market hours yesterday, 18 December 2014, stated that the said news Item itself carries a comment by a Kotak Group Spokesperson denying the rumour. Further, there is no information or fact, which the bank is obliged to disclose under clause 36 of the Listing Agreement.

Closer home, the Union Cabinet on Wednesday, 17 December 2014, approved a constitutional amendment bill to provide the legal framework for rolling out a nationwide goods and services tax (GST). The constitutional amendment Bill provides the legal framework for rolling out the levy, giving states power to tax both goods and services. As of now only the central government can impose service tax. The amendment Bill will also create a GST council, a body that will have representatives of the states and the Centre that will take decisions on the tax after it is rolled out. The Bill is likely to be introduced in parliament during the ongoing winter session.

The government's intension is to implement a nationwide GST from 1 April 2016. GST is a major indirect tax reform. GST will subsume central indirect taxes such as excise duty and service tax at the central level and value added tax at the state level besides other local levies such as octroi and entry tax.

Investors are closely monitoring if the Indian government's key legislative reform bills are passed during the ongoing winter session of the parliament. The Indian government intends to get the Insurance Laws (Amendment) Bill, 2008 passed in both the Houses of Parliament in this week. The Union Cabinet, last week, approved the official amendments to the Insurance Laws (Amendment) Bill, 2008. The Parliamentary Select Committee in its report tabled in Rajya Sabha on 10 December 2014 agreed a composite cap of 49% on foreign investment in the insurance sector, which includes all types of foreign investment as opposed to the 26% foreign direct investment (FDI) allowed at present. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the composite cap in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.

It also remains to be seen if the government will be to find support for the Coal Mines (Special Provisions) Bill, 2014 in the Rajya Sabha where it's in a minority. The Lok Sabha last week passed the Coal Mines (Special Provisions) Bill, 2014. The bill allows the government to enforce rules and guidelines for auction/allocation of 204 coal blocks cancelled by the Supreme Court in September this year.

Indian stocks surged in a broad based rally on Thursday, 18 December 2014, mirroring gains in global equity markets triggered by signals from the Federal Open Market Committee that the US central bank isn't in a hurry to raise interest rates in the United States. The S&P BSE Sensex rose 416.44 points or 1.56% to settle at 27,126.57 on that day, its highest closing level since 15 December 2014.

Foreign portfolio investors sold shares worth a net Rs 874.89 crore yesterday, 18 December 2014, as per provisional data.

Japanese stocks led Asian markets higher today, 19 December 2014, after US stocks boasted its biggest two-day advance since late 2011 yesterday, 18 December 2014, amid relief the Federal Reserve was in no rush to start hiking interest rates. Key indices in China, South Korea, Indonesia, Singapore, Japan, Hong Kong, and Taiwan were up 0.36% to 1.92%.

US stocks rallied yesterday, 18 December 2014, to its best two-day gains in three years. Rally was kicked off Wednesday, 17 December 2014, after Federal Reserve Chairwoman Janet Yellen assured the markets that the central bank would be patient about lifting interest rate.

In economic news, a weekly jobless claims report came in stronger than expected, confirming the Fed's view that the economy is strengthening. Claims fell by 6,000 to 289,000, a low level typically associated with strong hiring.

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