Key benchmark indices registered modest gains after seeing high volatility during the latter part of the trading session. Benchmark indices trimmed gains soon after extending intraday gains in late trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, trimmed gains after hitting their highest level in almost a week. High volatility for key benchmark indices in late trade materialized as global crude oil prices rose. India imports about 80% of its crude oil requirements. The Sensex was provisionally up 116.22 points or 0.44% at 26,802.73. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up 1.44%. The BSE Small-Cap index was up 1.33%. Both these indices outperformed the Sensex.
Meanwhile, Central Board of Direct Taxes (CBDT) chairman Anita Kapur was quoted as saying at a press conference yesterday, 16 June 2015, that the income tax department would not attempt any coercive recovery of the minimum alternate tax (MAT) demands placed on foreign institutional investors (FIIs).
Index heavyweights L&T and Reliance Industries edged higher. Shares of steel companies rose after reports that the government has decided to increase import duty on steel products. Tata Steel surged on reports trade unions decided to suspend industrial action at the steelmaker's UK plants.
Key indices hovered in positive zone throughout the trading session today, 17 June 2015.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update issued yesterday, 16 June 2015, that the cumulative rainfall during this year's monsoon season was 13% above the Long Period Average (LPA) until 15 June 2015.
Meanwhile, a news agency quoted Arvind Virmani who is a member of the central bank's technical advisory panel as saying that the Reserve Bank of India (RBI) still has scope to cut interest rates by more than a percentage point given the slowdown in inflation.
In overseas markets, European stocks edged lower in volatile trade, with investors nervously digesting the lack of progress in Greece's debt talk with lenders ahead of a closely watched Eurogroup meeting later in the week. Asian stocks edged higher after US stocks registered modest gains overnight. US stocks edged higher yesterday, 16 June 2015, as investors shrugged off worries about unsuccessful Greek debt talks and awaited the outcome of a two-day Federal Reserve policy meeting.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 521.65 crore yesterday, 16 June 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 644.81 crore yesterday, 16 June 2015, as per provisional data released by the stock exchanges.
As per provisional figures, the S&P BSE Sensex was up 116.22 points or 0.44% at 26,802.73. The index jumped 296.97 points at the day's high of 26,983.48 in late trade, its highest level since 11 June 2015. The index rose 42.38 points at the day's low of 26,728.89 in morning trade.
The Nifty was up 43.50 points or 0.54% at 8,090.80, as per provisional figures. The index hit a high of 8,136.85 in intraday trade, its highest level since 11 June 2015. The index hit a low of 8,048.95 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,708 shares rose and 948 shares fell. A total of 125 shares were unchanged.
The BSE Mid-Cap index was up 146.83 points or 1.44% at 10,344.51. The BSE Small-Cap index was up 141.65 points or 1.33% at 10,796.55. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 3104 crore, higher than turnover of Rs 2505.16 crore registered during the previous trading session.
L&T rose 1.6% to Rs 1,703.45. The stock hit high of Rs 1,717 and low of Rs 1,676.65.
Reliance Industries (RIL) gained 2.95% to Rs 930.65. The stock hit high of Rs 940.40 and low of Rs 894.40.
Shares of steel companies rose after reports that the government has decided to increase import duty on steel products. JSW Steel (up 1.98%), Bhushan Steel (up 3.39%), Steel Authority of India (Sail) (up 1.5%), and Jindal Steel & Power (up 0.53%) gained. According to media reports, the government has raised import duty on long steel products to 7.5% from 5.5% and on flat steel products to 10% from 7.5%. Investors expect that higher import duty will restrict rising steel imports, which have put additional pressure on domestic steel companies.
Tata Steel edged higher on reports trade unions decided to suspend industrial action at the steelmaker's UK plants. The stock was up 2.9%. According to reports, trade unions representing workers of Tata Steel in the UK have decided to suspend its 22 June 2015 strike action after the steel major approached the Advisory, Conciliation and Arbitration Service (ACAS) to resolve the pension dispute in an independent manner. Tata Steel is keen to resolve dispute without industrial action, reports added.
ACAS provides collective conciliation services to help employers and employees' representatives (Trade Unions) to reach agreement on a range of issues affecting groups of employees. Reports added that the trade unions have agreed to suspend industrial action as they are confident that ACAS involvement will ensure fair negotiations. They are expecting a revised offer from Tata Steel.
Unions in UK recently notified plans to take industrial action in dispute over the Tata Steel UK's proposals to revise the British Steel Pensions Scheme's contribution and benefits framework.
Kotak Mahindra Bank rose 0.3%. The finance ministry today, 17 June 2015, announced that the government has deferred decision on a proposal of Kotak Mahindra Bank for increasing the aggregate foreign investment in Kotak Mahindra Bank to 55% pursuant to a merger of ING Vyasa Bank with Kotak Mahindra Bank.
Meanwhile, Central Board of Direct Taxes (CBDT) chairman Anita Kapur was quoted as saying at a press conference yesterday, 16 June 2015, that the income tax department would not attempt any coercive recovery of the minimum alternate tax (MAT) demands placed on foreign institutional investors (FIIs). The tax department had asked several FIIs to pay 18.5% MAT on their trading income in India, forcing some of them to take it to the court. Although the government says that the notices have been served in only 68 cases involving a total demand of just Rs 603 crore for the period prior to 1 April 2015, FIIs are worried that more such notices could be in the offing. In the Union Budget 2015-16, the government exempted FIIs' trading income from MAT with effect from 1 April 2015.
Last month, the government set up a committee to examine the matter relating to the levying of MAT on FIIs for the period prior to 1 April 2015. Earlier, the government had said that FIIs can avail of treaty benefits to ward off the tax demands.
Meanwhile, a news agency quoted Arvind Virmani who is a member of the central bank's technical advisory panel as saying that the Reserve Bank of India (RBI) still has scope to cut interest rates by more than a percentage point given the slowdown in inflation. The consumer-price inflation rate has declined by three percentage points over the last 12 to 18 months, raising real interest rates by 2 to 3%, Virmani said.
Meanwhile, in the global commodities market, Brent crude futures edged higher today, 17 June 2015. Brent for August settlement was up $1.56 a barrel at $65.26 a barrel. The contract had fallen 25 cents or 0.39% to settle at $63.70 a barrel during the previous trading session.
Increase in global crude oil prices has raised concerns about India's fiscal deficit, current account deficit and fuel price inflation. India imports about 80% of its crude oil requirements.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update issued yesterday, 16 June 2015, that the Southwest Monsoon was active over Gangetic West Bengal and Telangana during past 24 hours ending at 0830 hrs. Conditions are favourable for further advance of southwest monsoon into some more parts of Chhattisgarh, Odisha and West Bengal and remaining parts of Coastal Andhra Pradesh and Bay of Bengal during next 3 days, the IMD said.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 13% above the Long Period Average (LPA) until 15 June 2015. Region wise, the southwest monsoon was 22% above the LPA in East & Northeast India, 18% above the LPA in Central India and 1% below the LPA in Northwest India until 15 June 2015. The rainfall was 100% of the Long Period Average in South Peninsula.
The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
In overseas markets, European stocks edged higher in volatile trade today, 17 June 2015, with investors nervously digesting the lack of progress in Greece's debt talk with lenders ahead of a closely watched Eurogroup meeting later in the week. Key benchmark indices in UK, France and Germany were off 0.03% to 0.35%.
Investors continue to watch developments in Greece. Greece Prime Minister Alexis Tsipras accused Greece's creditors yesterday, 16 June 2015, of trying to "humiliate" Greeks with more cuts as he defied a growing drumbeat of warnings that Europe was preparing for his country to leave the euro. The unrepentant address to lawmakers after the collapse of talks with European and International Monetary Fund (IMF) lenders at the weekend was the clearest sign yet that the leftist leader has no intention of making a last-minute U-turn and accepting austerity cuts needed to unlock frozen aid and avoid a debt default within two weeks.
Meanwhile, Austrian chancellor Werner Faymann is due to speak with Tsipras in Athens today, 17 June 2015, in an effort to break the deadlock, according to reports. Greece has a debt repayment of 1.6 billion euros ($1.8 billion) due at the end of this month to the International Monetary Fund after the European nation bundled all its four June repayments into one.
Meanwhile, a meeting of eurozone finance ministers is scheduled in Luxembourg tomorrow, 18 June 2015.
Greece's central bank warned today, 17 June 2015, that failure to clinch a deal with international creditors on its future funding needs could lead the country into an uncontrollable crisis, describing the issue as being of historical significance for the nation. In its annual monetary report, the Bank of Greece, the country's central bank, said that based on evidence so far, it seems that a compromise has been reached on the main conditions attached to the lending agreement and that little ground remains to be covered.
In UK, the minutes of Bank of England's (BOE) Monetary Policy Committee meeting which was held early this month showed that all nine panel members voted to keep the BOE's benchmark interest rate at 0.5% and voted unanimously to leave the size of the central bank's bond portfolio at 375 billion pounds ($585.44 billion).
Asian stocks edged higher today, 17 June 2015, after US stocks registered modest gains overnight. Key benchmark indices in China, Indonesia, South Korea, Hong Kong and Singapore were up 0.3% to 1.65%. Key benchmark indices in Taiwan and Japan were off 0.19% to 0.25%.
Japanese exports grew at the slowest pace in nine months in May as shipments to the US and China moderated, while export volumes for the month fell compared with a year earlier. Exports rose 2.4% from a year earlier to 5.741 trillion yen in May 2015, the finance ministry said today, 17 June 2015. The rate of expansion was the smallest since the start of a gentle uptrend in September, in a sign that a slowdown in the US and weakening growth in China may be beginning to hinder a Japanese economic recovery.
US stocks closed higher yesterday, 16 June 2015, as investors shrugged off worries about unsuccessful Greek debt talks and awaited the outcome of a two-day Federal Reserve policy meeting. In macroeconomic data in US, construction starts on new US homes fell 11.1% to an annual rate of 1.04 million in May, pulling back from a surge in April and missing expectations. But the annual pace of permits for new construction, a sign of future demand, rose 11.8% to 1.28 million in Ma, the fastest pace since August 2007.
A two-day meeting of the Federal Open Market Committee (FOMC) to review US monetary policy concludes today, 17 June 2015. The FOMC meeting is being keenly watched for further indication of the timing of an expected rate hike by the US central bank later this calendar year.
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