A bout of volatility was witnessed as key benchmark retained positive zone in early afternoon trade after the latest data showed that the annual rate of inflation based on monthly wholesale price index was in negative zone January 2015. The market breadth indicating the overall health of the market turned negative from positive. The barometer index, the S&P BSE Sensex, was currently up 85.23 points or 0.29% at 29,180.16.
Housing finance major HDFC rose after good Q3 results. Pharmaceutical shares were mixed.
Earlier, the Sensex and the 50-unit CNX Nifty had, both, hit their highest levels in almost 2-1/2 weeks in early trade.
Foreign portfolio investors bought shares worth a net Rs 390.26 crore during the previous trading session on Friday, 13 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 95.82 crore on Friday, 13 February 2015, as per provisional data.
In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude oil futures edged lower after a rally during the previous trading session on Friday, 13 February 2015. 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.
In overseas markets, Asian stocks edged higher today, 16 February 2015, helped by Wall Street's gains during the previous trading session on Friday, 13 February 2015. US stocks posted small gains during the previous trading session on Friday, 13 February 2015.
India's financial markets are closed tomorrow, 17 February 2015, on account of Mahashivratri.
At 12:20 IST, the S&P BSE Sensex was up 85.23 points or 0.29% at 29,180.16. The index jumped 230.42 points at the day's high of 29,325.35 in early trade, its highest level since 30 January 2015. The index rose 55.74 points at the day's low of 29,150.67 in early afternoon trade.
The CNX Nifty was up 22.65 points or 0.26% at 8,828.15. The index hit a high of 8,870.10 in intraday trade, its highest level since 30 January 2015. The index hit a low of 8,815.25 in intraday trade.
The BSE Mid-Cap index was up 11.42 points or 0.11% at 10,752.37. The BSE Small-Cap index was up 12.99 points or 0.12% at 11,252.27. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,348 shares declined and 1,220 shares advanced. A total of 98 shares were unchanged.
Housing finance major HDFC rose 1.42% to Rs 1,286.55. The stock hit a high of Rs 1,287.60 and a low of Rs 1,268.30 so far during the day. HDFC's consolidated net profit rose 12.61% to Rs 2179.01 crore on 18.89% growth in total income to Rs 11952.48 crore in Q3 December 2014 over Q3 December 2013. The Q3 result was announced on Saturday, 14 February 2015.
Pharma stocks were mixed. Ipca Laboratories (up 2.18%), Dr. Reddy's Laboratories (up 1.77%), Glenmark Pharmaceuticals (up 1.56%), Wockhardt (up 1.34%), Cadila Healthcare (up 1.24%), Strides Arcolab (up 0.5%), Cipla (up 0.88%), Piramal Healthcare (up 0.41%) and GlaxoSmithKline Pharmaceuticals (up 0.21%) edged higher. Aurobindo Pharma (down 0.12%), Lupin (down 0.57%), Divi's Laboratories (down 0.98%) and Ranbaxy Laboratories (down 1.97%), edged lower.
Sun Pharmaceutical Industries fell 1.95% to Rs 921 after weak Q3 earnings. The stock hit a high of Rs 931 and a low of Rs 908.10 so far during the day. The company's consolidated net profit fell 6.9% to Rs 1425.07 crore on 1.9% decline in total income to Rs 4361.85 crore in Q3 December 2014 over Q3 December 2013. Earnings before interest, taxation, depreciation and amortization (EBITDA) fell 3% to Rs 1913 crore in Q3 December 2014 over Q3 December 2013. EBITDA margin slipped to 45% in Q3 December 2014 from 46% in Q3 December 2013.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 62.215, compared with its close of 62.20 during the previous trading session on Friday, 13 February 2015.
Brent crude oil futures edged lower. Brent for April settlement was off 2 cents at $61.50 a barrel. The contract had risen $2.24 a barrel to settle at $61.52 a barrel during the previous trading session on Friday, 13 February 2015.
On the macro front, the latest data showed that the annual rate of inflation based on monthly wholesale price index (WPI) was in negative zone January 2015. The annual rate of inflation based on monthly wholesale price index (WPI) stood at negative 0.39% in January 2015, compared with a reading of 0.11% for December 2014. Build up inflation rate in the financial year so far was negative 1.11%, compared to a build up rate of 5.23% in the corresponding period of the previous year. Meanwhile, annual rate of inflation based on WPI was revised downward to negative 0.17% for November 2014, from a figure of zero reported earlier.
Exports during January, 2015 were valued at $23883.60 million (Rs 148617.82 crore) which was 11.19% lower in dollar terms (10.97% lower in rupee terms) than the level of $26891.58 million (Rs 166932.15 crore) during January 2014. Imports during January 2015 were valued at $32205.63 million (Rs 200402.44 crore) which was 11.39% lower in dollar terms and 11.18% lower in rupee terms over the level of imports valued at $36346.32 million (Rs 225623.44 crore) in January 2014. The trade deficit for April-January 2014-15 was estimated at $118373.95 million which was higher than the deficit of $116532.22 million during April-January 2013-14. The government announced the trade data for January 2015 after trading hours on Friday, 13 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 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 markets were mostly higher today, 16 February 2015, after Japan emerged from recession last quarter and as investors looked ahead to a meeting between Greece and its main European creditors. Key benchmark indices in China, Hong Kong, Japan and South Korea were up by 0.04% to 0.54%. Key indices in Indonesia and Singapore were off 0.08% to 0.57%.
Japan's Nikkei 225 was at 0.51% after managing to touch eight-year high. Japan's economy pulled out of a recession in the final months of 2014, yet the weaker than expected pickup is likely to raise concerns about Prime Minister Shinzo Abe's efforts to get the nation out of a long slump with his stimulus policy known as Abenomics. Gross domestic product increased at an annualized pace of 2.2% in the three months through December, government data showed today, 16 February 2015.
In China, the latest data showed that China's foreign direct investment surged in January. China attracted $13.92 billion of foreign direct investment in January, up 29.4% from a year earlier, the Ministry of Commerce said today. The figure was above December's $13.32 billion, which was 10.3% higher than a year earlier. Chinese investments overseas reached $10.17 billion in the first month of the year, up 40.6% from a year ago, according to the ministry.
US markets are shut today, 16 February 2015, for the Presidents' Day holiday. US stocks rose on Friday, 13 February 2015, boosted by a positive lead from European markets, including upbeat eurozone GDP data and optimistic signs regarding Greek debt negotiations. The Dow Jones Industrial Averages closed above 18,000 points for the first time in 2015 and the S&P 500 reported a new all-time closing high.
However, the buying interest was partly offset by the release of a report from the University of Michigan showing a sharp pullback in US consumer sentiment in the month of February. The University of Michigan said its preliminary consumer sentiment index for February tumbled to 93.6 from the final January reading of 98.1.
In Europe, Greece and its international creditors held talks on Friday, 13 February 2015, on reforms needed to keep the country financed. The talks are said to increase the possibility of reaching an interim compromise deal at another euro-zone finance ministers meeting today, 16 February 2015.
The talks between eurozone finance ministers and Greece are key, because they are the last moment for the new Greek government to ask for a technical extension of the current bailout program, which expires on 28 February 2015.
Meanwhile, the conflict in eastern Ukraine subsided after a cease-fire came into effect yesterday, 15 February 2015, although fighting continued between Ukrainian forces and Russia-backed militants around a key railway hub.
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