A bout of volatility was witnessed as key benchmark indices extended initial gains in morning trade. The S&P BSE Sensex and the CNX Nifty, both, hit their highest levels in about 2-1/2 weeks. The barometer index, the S&P BSE Sensex was currently up 214.55 points or 0.74% at 29,309.48. The market breadth indicating the overall health of the market was positive.
Infosys was trading lower after the company said it acquired automation technology provider, Panaya, Inc., in cash, for an enterprise value of $200 million. Shares of PSU OMCs were mostly higher after a hike in petrol and diesel prices. Shares of real estate developers were in demand.
Foreign portfolio investors bought shares worth a net Rs 390.26 crore on Friday, 13 February 2015, as per provisional data. Domestic institutional investors (DIIs) bought shares worth a net Rs 95.82 crore on Friday, 13 February 2015, as per provisional data released by the stock exchanges.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged lower.
Among global market, 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.
The domestic stock market remains closed tomorrow, 17 February 2015, on account of Mahashivratri.
At 10:16 IST, the S&P BSE Sensex was up 214.55 points or 0.74% at 29,309.48. The index rose 230.42 points at the day's high of 29,325.35 in morning trade, its highest level since 30 January 2015. The index rose 61.11 points at the day's low of 29,156.04 at the onset of trading session.
The CNX Nifty was up 56.20 points or 0.64% at 8,861.70. 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 8,824.70 in intraday trade.
The BSE Mid-Cap index was up 58.58 points or 0.55% at 10,799.53. The BSE Small-Cap index was up 57.59 points or 0.51% at 11,296.87. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1245 shares advanced and 834 shares declined. A total of 75 shares were unchanged.
Infosys was down 0.17% to Rs 2,292.50. The stock hit a high of Rs 2,305.85 and a low of Rs 2,271.35 in intraday trade. The company announced during market hours that it signed a definitive agreement to fully acquire Panaya, Inc., a leading provider of automation technology for large scale enterprise software management, in cash, for an enterprise value of $200 million. The transaction is expected to close before 31 March 2015, subject to customary closing conditions.
Shares of PSU OMCs were mostly higher. BPCL (up 3.37%) and Indian Oil Corporation (up 2.87%), edged higher. HPCL was off 0.06%. Petrol price was hiked by Rs 0.82 a litre and diesel by Rs 0.61 a litre in Delhi with corresponding increase in other states. The petrol and diesel price hike, which was effective from midnight of Sunday, 15 February 2015, is the first increase since August 2014 and follows firming of oil prices in the international market. PSU OMCs review fuel prices during the middle of the month and on the last day of the month based on the average imported oil price in the preceding fortnight. The government has already freed pricing of petrol and diesel.
Shares of real estate developers were in demand. Housing Development and Infrastructure (HDIL) (up 5.76%), Parsvnath Developers (up 4.44%), D B Realty (up 4.29%), Indiabulls Real Estate (up 1.48%), Phoenix Mills (up 1.31%), Oberoi Realty (up 1.08%), DLF (up 0.55%), Peninsula Land (up 0.43%), Godrej Properties (up 0.32%) and Sunteck Realty (up 0.2%), edged higher. Anant Raj (down 0.51%), Prestige Estates (down 1.78%) and Sobha (down 1.99%), edged lower.
Unitech was up 8.38% to Rs 18.10. The stock hit a high of Rs 18.20 and a low of Rs 17.05 in intraday trade. Unitech's consolidated net profit rose 32.02% to Rs 43.33 crore on 9.02% decline in total income to Rs 721.98 crore in Q3 December 2014 over Q3 December 2013. The result was announced after market hours on Friday, 13 February 2015. Unitech said it has a healthy balance sheet with a net debt to equity ratio of 0.57. Net debt as of 31 December 2014 was Rs 6300.84 crore.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.14, 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 down 24 cents at $61.28 a barrel. The contract had risen $2.24 a barrel to settle at $61.52 a barrel during the previous trading session.
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. Cumulative value of exports for the period April-January 2014-15 was $265037.38 million (Rs 1613789.24 crore) as against $258721.45 million (Rs 1562119.12 crore) registering a growth of 2.44% in dollar terms and growth of 3.31% in rupee terms over the same period last year.
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. Cumulative value of imports for the period April-January 2014-15 was $383411.33 million (Rs 2334685.06 crore) as against $375253.67 million (Rs 2253984.83 crore) registering a growth of 2.17% in dollar terms and growth of 3.58% in rupee terms over the same period last year.
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 rate of inflation based on the wholesale price index (WPI) is seen accelerating to 0.4% in January 2015 from 0.1% in December 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil WPI data for January 2015 at 12.10 noon today, 16 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 0.03% to 0.35%. Indonesia and Singapore were off 0.29% to 0.38%.
Japan's Nikkei 225 were up at 0.42% after managing to touch eight-year high. Japan managed to pull out of recession in the last quarter of last year. The first read of Japan's gross domestic product for the October-December period indicated growth at a 2.2% annualized rate, or 0.6% on a quarterly basis. Likewise, the deflator for the quarter rose to 2.3% compared to 2.0% in July-September.
Data showed 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. It didn't say whether this included financial investments, which are normally calculated separately.
US markets are shut today, 16 February 2016, 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.
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