Market logs strong gains on Budget cheer
Key benchmark indices registered strong gains in the week ended Friday, 4 March 2016, as investors gave thumbs up to no adverse changes in long-term capital gains tax on sale of shares in the Budget, government's thrust on infrastructure sector and decision to stick to the fiscal deficit target for the next fiscal year. Key indices edged higher in four out of five trading sessions during the week.
In the week ended Friday, 4 March 2016, the 30-share S&P BSE Sensex gained 1,492.18 points or 6.44% to settle at 24,646.48, its highest closing level since 1 February 2016. The 50-unit Nifty 50 index gained 455.60 points or 6.48% to settle at 7,485.35, its highest closing level since 5 February 2016.
The BSE Mid-Cap index advanced 652.16 points or 6.81% to settle at 10,224.84. The BSE Small-Cap index advanced 730.52 points or 7.65% to settle at 10,285.75. Both these indices outperformed the Sensex.
After a knee jerk reaction to increase in Securities Transaction Tax (STT) on equity options and levy of tax on dividend for high networth individuals in the Union Budget 2016-17, Indian stocks settled with modest losses on Monday, 29 February 2016, as the government stuck to the 3.5% fiscal deficit target for 2016-17. The barometer index, the S&P BSE Sensex, fell 152.30 points or 0.66% to settle at 23,002, its lowest closing level since 25 February 2016.
Indian stocks registered solid gains on Tuesday, 1 March 2016 as investors gave thumbs up to no adverse changes in long-term capital gains tax on sale of shares in the Budget, government's thrust on infrastructure sector and decision to stick to the fiscal deficit target for the next fiscal year. The Sensex jumped 777.35 points or 3.38% to settle at 23,779.35, its highest closing level since 22 February 2016.
Banking, metal sector stocks along with index heavyweights Infosys, HDFC and Reliance Industries (RIL) powered the rally on the bourses on Wednesday, 2 March 2016. The Sensex jumped 463.63 points or 1.95% to settle at 24,242.98, its highest closing level since 8 February 2016.
Gains in metal and capital goods stocks along with index heavyweights Infosys and HDFC led the rally for the two key benchmark indices on Thursday, 3 March 2016. The Sensex rose 364.01 points or 1.5% to settle at 24,606.99, its highest closing level since 5 February 2016.
Gains for banking sector stocks, public sector companies and metal stocks offset losses for IT and telecom stocks, with key benchmark indices registering tiny gains on Friday, 4 March 2016. The Sensex rose 39.49 points or 0.16% to settle at 24,646.48, its highest closing level since 1 February 2016.
Among the 30-share Sensex pack, 26 stocks rose and the only four of them declined in the week ended Friday, 4 March 2016.
Adani Ports & Special Economic Zone (up 12.67%), GAIL (India) (up 11.99%) and L&T (up 7.48%) edged higher from the Sensex pack.
Bank stocks logged sharp gains. State Bank of India (up 20.58%), ICICI Bank (up 19.29%), HDFC Bank (up 6.38%) and Axis Bank (up 7.71%) gained.
The S&P BSE Bankex gained 11.75% during the week. The Reserve Bank of India (RBI) on 1 March 2016 announced relaxations on the treatment of certain balance sheet items for the purpose of determining banks' regulatory capital.
Dr Reddy's Laboratories (DRL) rose 8.38%. The company on 3 March 2016 received approval from the United States Food and Drug Administration (FDA) for Palonosetron Hydrochloride injection or Aloxi generic. Palonosetron Hydrochloride is used to treat chemotherapy induced nausea. In October 2015, DRL had entered into a settlement agreement with Helsinn Healthcare SA, a Switzerland-based pharma company for patent litigations related to Aloxi generic in the US. With this settlement, the company is permitted to market Aloxi generic on 30 September 2018 or earlier.
Tata Steel surged 16.08% after the company in a clarification issued on 3 March 2016, said that the Ministry of Environment, Forest and Climate Change has granted environmental clearance for expansion of integrated steel plant located at Jamshedpur, Jharkhand. The expansion involves increase in crude steel production capacity from 9.7 mtpa to 11 mtpa at the Jamshedpur unit.
TCS rose 6.52%. TCS on 2 March 2016 announced that as a new member of the GE Digital Alliance Program created by GE Digital, it will develop innovative digital solutions that increase the productivity of mobile workforces and assets in motion by leveraging Predix, GE's cloud platform for the industrial internet. TCS and GE will work together to create an innovative industry solutions ecosystem by leveraging TCS' comprehensive business and digital expertise to enrich GE's Predix platform, TCS said.
Index heavyweight and software major Infosys rose 4.42%. The company on 2 March 2016, said that Al Ahli Bank of Kuwait (ABK), a leading retail bank in Kuwait, has selected Infosys Finacle to drive its technology transformation. Infosys Finacle, part of EdgeVerve Systems, is a product subsidiary of Infosys.
Auto stocks edged higher. Maruti Suzuki India (MSIL) rose 4.57%. The company during market hours on 1 March 2016, announced that its total sales declined 0.9% to 1.17 lakh units in February 2016 over February 2015.
Mahindra & Mahindra (M&M) shed 0.94%. The company's management on 2 March 2016 in a post-budget conference call said that the excise duty exemption on products manufactured at the company's Haridwar plant expired from 1 January 2016 and this could impact the margins of the company adversely by around 100 basis points (bps) in Q4 March 2016. The Haridwar plant has annual capacity of 1 lakh vehicles. The management said that it would pass on the infrastructure cess announced in the Union Budget 2016-17 to customers in due course of time after discussion with the Society of Indian Automobile Manufacturers (SIAM). There might be some impact on volumes due to the new levy. However, it could be offset by factors such as increased rural demand and soft interest rates, M&M's management said.
Bajaj Auto rose 3.03%. The company on 2 March 2016 announced that its total sales rose 12% to 2.72 lakh units in February 2016 over February 2015.
Hero MotoCorp gained 10.9%. The company announced on 1 March 2016 that its total two-wheeler sales rose 13.6% to 5.50 lakh units in February 2016 over February 2015.
Tata Motors jumped 13.68%. Jaguar Land Rover (JLR) North America announced early this week that its US sales rose 25% to 7,929 units in February 2016 over February 2015.
The S&P BSE Auto index rose 5.95%. Finance minister Arun Jaitley in the Union Budget 2016-17 early this week, imposed infrastructure cess of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs.
Index heavyweight and cigarette major ITC gained 8.59% following a lower-than-expected hike in excise duty on cigarettes in the Budget. Finance minister Arun Jaitley announced increase in the excise duties on tobacco products other than beedi by about 10% to 15% in the Union Budget 2016-17.
Bharat Heavy Electricals (Bhel) surged 12.78%. The company announced on 1 March 2016 that it has bagged a large contract worth Rs 5600 crore for setting up a 1,600 megawatts (MW) supercritical power project in Tamil Nadu. The project is slated to be commissioned by September 2019 and the power generated from this 1,600 MW power project will help foster growth in Tamil Nadu and provide easy access to electricity to the people of the state, Bhel said.
In the Union Budget 2016-17 presented in the Parliament on Monday, 29 February 2016, the Finance Minister Arun Jaitely announced raising the rate of Securities Transaction Tax (STT) on equity options to 0.05% from 0.017%. The Finance Minister slapped tax at the rate of 10% on gross amount of dividend received by individuals, HUFs and firms receiving dividend in excess of Rs 10 lakh per annum. Companies will continue to pay the Dividend Distribution Tax (DDT) on dividend payment, as per the existing tax law. The finance minister announced a plan of phasing out corporate tax exemptions. The benefit of accelerated depreciation will be limited to maximum 40% from 1 April 2017. The benefit of deductions for Research would be limited to 150% from 1 April 2017 and 100% from 1 April 2020. The benefit of section 10AA to new SEZ units will be available to those units, which commence activity before 31 March 2020. The weighted deduction under section 35CCD for skill development will continue up to 1 April 2020.
The government has allotted Rs 2.21 lakh crore for infrastructure development, which is increase of 22.5% over the current fiscal. The finance minister has stuck to previously announced fiscal deficit targets. The fiscal deficit target of 3.5% of GDP for FY 2016-17 has been retained. The government has also kept the fiscal deficit target of 3.9% of GDP for the current fiscal year. Simultaneously, Jaitley announced the setting up a Committee to review the Fiscal Responsibility and Budget Management (FRBM) Act. The finance minister said that the government is committed to implement the General Anti Avoidance Rules (GAAR) from 1 April 2017. The finance minister announced a slew of changes in customs and excise duty rates.
Meanwhile, the outcome of a monthly survey on Monday, 29 February 2016 showed that manufacturing business conditions in India continued to improve with new orders, exports, output and purchasing activity all rising in February 2016. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) stood at 51.1 in February 2016, unchanged from January's reading.
In the week ended Friday, 4 March 2016, the 30-share S&P BSE Sensex gained 1,492.18 points or 6.44% to settle at 24,646.48, its highest closing level since 1 February 2016. The 50-unit Nifty 50 index gained 455.60 points or 6.48% to settle at 7,485.35, its highest closing level since 5 February 2016.
The BSE Mid-Cap index advanced 652.16 points or 6.81% to settle at 10,224.84. The BSE Small-Cap index advanced 730.52 points or 7.65% to settle at 10,285.75. Both these indices outperformed the Sensex.
After a knee jerk reaction to increase in Securities Transaction Tax (STT) on equity options and levy of tax on dividend for high networth individuals in the Union Budget 2016-17, Indian stocks settled with modest losses on Monday, 29 February 2016, as the government stuck to the 3.5% fiscal deficit target for 2016-17. The barometer index, the S&P BSE Sensex, fell 152.30 points or 0.66% to settle at 23,002, its lowest closing level since 25 February 2016.
Indian stocks registered solid gains on Tuesday, 1 March 2016 as investors gave thumbs up to no adverse changes in long-term capital gains tax on sale of shares in the Budget, government's thrust on infrastructure sector and decision to stick to the fiscal deficit target for the next fiscal year. The Sensex jumped 777.35 points or 3.38% to settle at 23,779.35, its highest closing level since 22 February 2016.
Banking, metal sector stocks along with index heavyweights Infosys, HDFC and Reliance Industries (RIL) powered the rally on the bourses on Wednesday, 2 March 2016. The Sensex jumped 463.63 points or 1.95% to settle at 24,242.98, its highest closing level since 8 February 2016.
Gains in metal and capital goods stocks along with index heavyweights Infosys and HDFC led the rally for the two key benchmark indices on Thursday, 3 March 2016. The Sensex rose 364.01 points or 1.5% to settle at 24,606.99, its highest closing level since 5 February 2016.
Gains for banking sector stocks, public sector companies and metal stocks offset losses for IT and telecom stocks, with key benchmark indices registering tiny gains on Friday, 4 March 2016. The Sensex rose 39.49 points or 0.16% to settle at 24,646.48, its highest closing level since 1 February 2016.
Among the 30-share Sensex pack, 26 stocks rose and the only four of them declined in the week ended Friday, 4 March 2016.
Adani Ports & Special Economic Zone (up 12.67%), GAIL (India) (up 11.99%) and L&T (up 7.48%) edged higher from the Sensex pack.
Bank stocks logged sharp gains. State Bank of India (up 20.58%), ICICI Bank (up 19.29%), HDFC Bank (up 6.38%) and Axis Bank (up 7.71%) gained.
The S&P BSE Bankex gained 11.75% during the week. The Reserve Bank of India (RBI) on 1 March 2016 announced relaxations on the treatment of certain balance sheet items for the purpose of determining banks' regulatory capital.
Dr Reddy's Laboratories (DRL) rose 8.38%. The company on 3 March 2016 received approval from the United States Food and Drug Administration (FDA) for Palonosetron Hydrochloride injection or Aloxi generic. Palonosetron Hydrochloride is used to treat chemotherapy induced nausea. In October 2015, DRL had entered into a settlement agreement with Helsinn Healthcare SA, a Switzerland-based pharma company for patent litigations related to Aloxi generic in the US. With this settlement, the company is permitted to market Aloxi generic on 30 September 2018 or earlier.
Tata Steel surged 16.08% after the company in a clarification issued on 3 March 2016, said that the Ministry of Environment, Forest and Climate Change has granted environmental clearance for expansion of integrated steel plant located at Jamshedpur, Jharkhand. The expansion involves increase in crude steel production capacity from 9.7 mtpa to 11 mtpa at the Jamshedpur unit.
TCS rose 6.52%. TCS on 2 March 2016 announced that as a new member of the GE Digital Alliance Program created by GE Digital, it will develop innovative digital solutions that increase the productivity of mobile workforces and assets in motion by leveraging Predix, GE's cloud platform for the industrial internet. TCS and GE will work together to create an innovative industry solutions ecosystem by leveraging TCS' comprehensive business and digital expertise to enrich GE's Predix platform, TCS said.
Index heavyweight and software major Infosys rose 4.42%. The company on 2 March 2016, said that Al Ahli Bank of Kuwait (ABK), a leading retail bank in Kuwait, has selected Infosys Finacle to drive its technology transformation. Infosys Finacle, part of EdgeVerve Systems, is a product subsidiary of Infosys.
Auto stocks edged higher. Maruti Suzuki India (MSIL) rose 4.57%. The company during market hours on 1 March 2016, announced that its total sales declined 0.9% to 1.17 lakh units in February 2016 over February 2015.
Mahindra & Mahindra (M&M) shed 0.94%. The company's management on 2 March 2016 in a post-budget conference call said that the excise duty exemption on products manufactured at the company's Haridwar plant expired from 1 January 2016 and this could impact the margins of the company adversely by around 100 basis points (bps) in Q4 March 2016. The Haridwar plant has annual capacity of 1 lakh vehicles. The management said that it would pass on the infrastructure cess announced in the Union Budget 2016-17 to customers in due course of time after discussion with the Society of Indian Automobile Manufacturers (SIAM). There might be some impact on volumes due to the new levy. However, it could be offset by factors such as increased rural demand and soft interest rates, M&M's management said.
Bajaj Auto rose 3.03%. The company on 2 March 2016 announced that its total sales rose 12% to 2.72 lakh units in February 2016 over February 2015.
Hero MotoCorp gained 10.9%. The company announced on 1 March 2016 that its total two-wheeler sales rose 13.6% to 5.50 lakh units in February 2016 over February 2015.
Tata Motors jumped 13.68%. Jaguar Land Rover (JLR) North America announced early this week that its US sales rose 25% to 7,929 units in February 2016 over February 2015.
The S&P BSE Auto index rose 5.95%. Finance minister Arun Jaitley in the Union Budget 2016-17 early this week, imposed infrastructure cess of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs.
Index heavyweight and cigarette major ITC gained 8.59% following a lower-than-expected hike in excise duty on cigarettes in the Budget. Finance minister Arun Jaitley announced increase in the excise duties on tobacco products other than beedi by about 10% to 15% in the Union Budget 2016-17.
Bharat Heavy Electricals (Bhel) surged 12.78%. The company announced on 1 March 2016 that it has bagged a large contract worth Rs 5600 crore for setting up a 1,600 megawatts (MW) supercritical power project in Tamil Nadu. The project is slated to be commissioned by September 2019 and the power generated from this 1,600 MW power project will help foster growth in Tamil Nadu and provide easy access to electricity to the people of the state, Bhel said.
In the Union Budget 2016-17 presented in the Parliament on Monday, 29 February 2016, the Finance Minister Arun Jaitely announced raising the rate of Securities Transaction Tax (STT) on equity options to 0.05% from 0.017%. The Finance Minister slapped tax at the rate of 10% on gross amount of dividend received by individuals, HUFs and firms receiving dividend in excess of Rs 10 lakh per annum. Companies will continue to pay the Dividend Distribution Tax (DDT) on dividend payment, as per the existing tax law. The finance minister announced a plan of phasing out corporate tax exemptions. The benefit of accelerated depreciation will be limited to maximum 40% from 1 April 2017. The benefit of deductions for Research would be limited to 150% from 1 April 2017 and 100% from 1 April 2020. The benefit of section 10AA to new SEZ units will be available to those units, which commence activity before 31 March 2020. The weighted deduction under section 35CCD for skill development will continue up to 1 April 2020.
The government has allotted Rs 2.21 lakh crore for infrastructure development, which is increase of 22.5% over the current fiscal. The finance minister has stuck to previously announced fiscal deficit targets. The fiscal deficit target of 3.5% of GDP for FY 2016-17 has been retained. The government has also kept the fiscal deficit target of 3.9% of GDP for the current fiscal year. Simultaneously, Jaitley announced the setting up a Committee to review the Fiscal Responsibility and Budget Management (FRBM) Act. The finance minister said that the government is committed to implement the General Anti Avoidance Rules (GAAR) from 1 April 2017. The finance minister announced a slew of changes in customs and excise duty rates.
Meanwhile, the outcome of a monthly survey on Monday, 29 February 2016 showed that manufacturing business conditions in India continued to improve with new orders, exports, output and purchasing activity all rising in February 2016. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) stood at 51.1 in February 2016, unchanged from January's reading.
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