Union budget 2015-16 to dictate market trend

The market may remain volatile as the Finance Minister presents the Union Budget 2015-16 in Parliament today, 28 February 2015. Stock market remains open today, 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.

Coal India after market hours yesterday, 27 February 2015, said that the company's board of directors at its meeting held today, 27 February 2015, approved payment of interim dividend of Rs 20.70 per share for the year ending 31 March 2015 as recommended by the Audit Committee of the company in its meeting held yesterday, 27 February 2015.

Tata Motors after market hours yesterday, 27 February 2015, announced a Voluntary Retirement Scheme for the workmen. The company said its new people initiatives are designed to enhance the company's competitiveness at a time when the business environment and macro-economic pressures have resulted in depressed growth of the commercial vehicle and passenger car businesses in India.

All eyes are now on Union Budget 2015-16. Finance Minister Arun Jaitley will begin his speech at 11:00 IST in Lok Sabha today, 28 February 2015, as he tables the Union Budget 2015-16 in the parliament. 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.

Analysts are awaiting further progress on the Goods and Services Tax (GST) during the ongoing Budget session of Parliament 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.

Indian stocks surged yesterday, 27 February 2015 after the Economic Survey 2014-15 tabled in parliament by Finance Minister Arun Jaitley stated that the government remains committed to fiscal consolidation and said that there is a scope for Big Bang economic reforms.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 1957.10 crore yesterday, 27 February 2015, as per provisional data. Domestic institutional investors (DIIs) sold shares worth a net Rs 491.93 crore yesterday, 27 February 2015, as per provisional data.

US stocks ended lower yesterday, 27 February 2015 as US economic growth slowed more sharply than initially thought in the fourth quarter.

The economy in the US expanded at a slower pace in the fourth quarter than previously reported, restrained by a smaller gain in stockpiles and widening trade gap. Gross domestic product, the value of all goods and services produced, rose at a 2.2% annualized rate, down from an initial estimate of 2.6%, Commerce Department figures showed yesterday, 27 February 2015 in Washington.

In Europe, German lawmakers have approved a four-month extension of Greece's 240 billion ($269 billion) bailout program, according to reports. The vote in the Bundestag was 542 in favor of the extension, 32 against and 13 abstaining. The vote comes after eurozone finance ministers earlier this week approved Greece's list of proposed economic reforms that was required for the extension. The announcement hit the market after trading hours yesterday, 27 February 2015.

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