After trimming intraday gains in early afternoon trade, key benchmark indices recovered from lower level in afternoon trade. The market breadth indicating the overall health of the market was positive. The barometer index, the S&P BSE Sensex, was currently up 164.41 points or 0.56% at 29,300.29. The BSE Small-Cap index was up 1.05%, outperforming the Sensex. Asian stocks edged higher amid speculation Greece will resolve its standoff with creditors.
Meanwhile, the yearly SBI Composite Index, a leading indicator for tracking primarily manufacturing activity in Indian economy, inched up to a 2-month high of 52.9 (moderate growth) in February 2015 from 52.1 (moderate growth) in January 2015. Meanwhile, Finance Minister Arun Jaitley yesterday, 17 February 2015, said that there is a great opportunity for India to grow in terms of manufacturing and that India has to concentrate on infrastructure development.
Mahindra & Mahindra (M&M) rose after media reports quoted M&M Chief Executive, Automotive Division, Pravin Shah as saying that the company plans to launch an electric car in Europe in next six months. Shares of defence equipment makers surged after Prime Minister Narendra Modi today, 18 February 2015, said at the Aero India Show in Delhi that there would be a clear preference for defence equipment manufactured in India. Supreme Infrastructure India fell after weak Q3 results.
Earlier, Sensex hit its highest level in almost three weeks in mid-morning trade as the two key benchmark indices -- the Sensex and the 50-unit CNX Nifty -- extended initial gains.
Foreign portfolio investors sold shares worth a net Rs 182.80 crore during the previous trading session on Monday, 16 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 280.77 crore on Monday, 16 February 2015, as per provisional data. The stock market was closed yesterday, 17 February 2015, on account of Mahashivratri.
In overseas markets, Asian stocks edged higher amid speculation Greece will resolve its standoff with creditors. In the US, the S&P 500 eked out a small gain yesterday, 17 February 2015, to close at a record level for the second time this year, after reports emerged that Greece may ask for a six-month extension on its debt obligations.
In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude oil futures edged lower amid oil supply glut. Nevertheless, global crude oil prices have bounced back over the past few days after a steep slide in prices over the past few months. The recent rebound in global crude oil prices will raise concerns pertaining to India's fiscal deficit, current account deficit and fuel price inflation. India imports about 80% of its crude oil requirements. 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.
At 13:17 IST, the S&P BSE Sensex was up 164.41 points or 0.56% at 29,300.29. The index jumped 200.20 points at the day's high of 29,336.08 in mid-morning trade, its highest level since 30 January 2015. The index fell 8.97 points at the day's low of 29,126.91 at the onset of trading session.
The CNX Nifty was up 44.70 points or 0.51% at 8,854.05. The index hit a high of 8,862.20 in intraday trade. The index hit a low of 8,808.90 in intraday trade.
The BSE Mid-Cap index was up 70.70 points or 0.66% at 10,808.69. The BSE Small-Cap index was up 117.94 points or 1.05% at 11,364.39. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,537 shares advanced and 1,163 shares declined. A total of 92 shares were unchanged.
Infosys fell 0.01%. The company announced during market hours a multi-year, multimillion-dollar partnership with ABN AMRO, a leading retail and commercial bank, to provide IT services for the bank's operations. As part of this, Infosys, as one of the strategic partners of ABN AMRO, will deliver services across application development and maintenance, testing and product implementation. Infosys, along with other strategic partners of ABN AMRO, will help the bank rationalize its IT landscape to meet its goal of becoming a leading digital bank.
NTPC rose 1.87%. The company early this week said it has committed to add 10,000 megawatts (MW) through solar power projects at RE- Invest - 2015 -- the First Renewable Energy Global Investment Meet held in New Delhi. NTPC has already floated Notice Inviting Tender for four solar projects of 250 MW each in Andhra Pradesh, Madhya Pradesh, Telengana and Rajasthan and one solar project of 500 MW in Andhra Pradesh. The first 250 MW Solar project in Anantapur in Andhra Pradesh is expected to be awarded in this financial year. Availability of land and PPA arrangement are being explored in other states like Chhattisgarh, Uttar Pradesh, Puducherry, Gujarat etc. NTPC has already commissioned 8 MW scale solar projects in different parts of India totalling 110 MW, out of which Rajgarh Solar Project of 50 MW in Madhya Pradesh is the largest.
Mahindra & Mahindra (M&M) rose 1.47% after media reports quoted M&M Chief Executive, Automotive Division, Pravin Shah as saying that the company plans to launch an electric car in Europe in next six months. Meanwhile, M&M before market hours today, 18 February 2015, announced the upgradation of the side curtain airbag software on all the XUV500 vehicles manufactured on or before July 2014. The upgrade will be carried out free of cost for customers who will be individually contacted by the company, M&M said. This upgrade will be limited only to a software change and no parts will be replaced, M&M said. The proactive inspection/upgradation is in keeping with M&M's customer-centric approach, the company said in a statement.
Shares of defence equipment makers surged after Prime Minister Narendra Modi today, 18 February 2015, said at the Aero India Show in Delhi that there would be a clear preference for defence equipment manufactured in India. Pipavav Defence and Offshore Engineering Company (up 14.33%), Bharat Forge (up 3.27%), Bharat Electronics (up 7.58%), Centum Electronics (up 5.54%), L&T (up 1.09%), Astra Microwave Products (up 9.32%), Punj Lloyd (up 7.28%), BEML (up 4.43%), Taneja Aerospace & Aviation (up 8.43%), Tata Power Company (up 1.9%) and Walchandnagar Industries (up 6.07%) edged higher.
Modi said that the government is focusing on developing India's defence industry with a sense of mission. Modi also said that government's support for research and development is essential for India's defence sector. He further said that it should also be accompanied by a degree of assurance on purchase. India must ensure that its tax system does not discriminate against domestic manufacture in comparison to imports, Modi said.
Supreme Infrastructure India fell 3.98% after net profit fell 89% to Rs 3.53 crore on 33.9% decline in net sales to Rs 400.93 crore in Q3 December 2014 over Q3 December 2013. The Q3 result was announced yesterday, 17 February 2015, when the stock market was closed on account on Mahashivratri.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 62.25, compared with its close of 62.1575 during the previous trading session on Monday, 16 February 2015. The foreign exchange market was closed yesterday 17 February 2015, on account of Mahashivratri.
Brent crude oil futures edged lower amid oil supply glut. Brent for April settlement was off 43 cents at $62.10 a barrel. The contract had risen $1.13 a barrel, or 1.84% to settle at $62.53 a barrel during the previous trading session.
Finance Minister Arun Jaitley yesterday, 17 February 2015, said that there is a great opportunity for India to grow in terms of manufacturing and that India has to concentrate on infrastructure development. Jaitley made these comments while addressing the valedictory session of the three day event RE-INVEST 2015.
Meanwhile, the yearly SBI Composite Index, a leading indicator for tracking primarily manufacturing activity in Indian economy, inched up to a 2-month high of 52.9 (moderate growth) in February 2015 from 52.1 (moderate growth) in January 2015. In contrast, the monthly index slipped to 48.3 (low decline) in February 2015 from 52.1 (moderate growth) in January 2015. The sharp contraction in the month on month index may be attributed to less number of working days in February compared to January, according to Ecowrap which is an economics research publication from State Bank of India (SBI). According to Ecowrap, a revival in automobile sales, capital goods and consumer non-durables productions and possible upturn in the credit offtake by the large corporates segment highlights possible recovery in the economic activity in coming months. Consumer durable sales have not yet bottomed out. Bank credit and deposits continues to remain sluggish. Interestingly, growth in credit card outstanding continues to push up credit growth. The contraction in the in the monthly index could probably drag down the yearly index after a while, according to Ecowrap.
According to Ecowrap, benign wholesale as well as retail inflation accompanied by a lower cost of borrowing is expected to boost positive sentiment in the economy in coming months and possibly drive credit cycle and growth.
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.
Asian stocks edged higher today, 18 February 2015, tracking gains in the US as fears eased over Greece leaving the eurozone. Key benchmark indices in Hong Kong, Indonesia, Japan and Singapore were up 0.19% to 1.18%.
Trading on the Hong Kong stock market was open only for half-day today, 18 February 2015, and the stock market remains shut for the rest of the week for the Lunar New Year holiday. The stock market in mainland China is closed for this entire week starting today, 18 February 2015, for the Lunar New Year holiday.
In Japan, the Bank of Japan (BoJ) today, 18 February 2015, stood pat on its policy and painted a rosier picture of economic conditions, despite recent poor growth data and an inflation rate that is moving away from its 2% target. After the latest policy meeting, the BOJ's policy board voted 8-1 to keep unchanged the size of the bank's annual asset purchases worth 80 trillion yen ($670 billion), its main tool to generate higher inflation.
The central bank signaled that it mostly believes that the Japanese economy has finally overcome a hit from the government's move to raise the sales tax. Specifically, the BOJ removed for the first time its reference to the tax increase from the main language in its monthly economic assessment.
Trading in US index futures indicated that the Dow could gain 10 points at the opening bell today, 18 February 2015. US stocks closed slightly higher Tuesday, 17 February 2015, as investors continued to monitor talks between Greece and its creditors in hopes that a deal will be reached to keep the country from falling out of the eurozone.
In Europe, Greece may reportedly request a six-month extension on its debt obligations. According to reports, the newly elected Greek Prime Minister Alexis Tsipras will today, 18 February 2015, request an extension on the country's loan agreement. Talks are continuing between Greece and its international creditors on the conditions that would be attached to the extension of the loan accord, according to reports. Greece is scrambling to reach a deal with creditors before it runs out of cash. Greece's current bailout plan expires on 28 February 2015.
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