Nikkei trading strong; Hang Seng weak

Hang Seng opened 24,718.28 today as against the previous close of 24,778.28

Tokyo stocks opened at 18,588 in early trade on Thursday. At 8:25AM IST, the 225-issue Nikkei Stock Average is trading up 103 points, or 0.55%, from Wednesday to18,688.32.

Hang Seng opened 24,718.28 today as against the previous close of 24,778.28. At 8:27 AM IST, Hang Seng is trading down 16 points or 0.06% from Wednesday to 24,762.73.

The Dow Jones Industrial Average gained 0.08% to 18,225 on Wednesday, while the broad-based S&P 500 down 1.62% to 2,114.

NSE Nifty closed on Wednesday with marginal gains of 5 points at 8,767, while the Sensex added 3 points to close at 29007 on Wednesday.  

Sensex to open on a flat note ahead of F&O, Railway Budget

The outlook is a flat start. Global markets are mixed, U.S. stocks ended Wednesday's choppy session on a flat note. However, the Dow Jones eked out marginal gains to shut shop at fresh record. 

A month of consolidation draws to a close as Feb series expires today. Interestingly, while the Nifty has seen high rolls the BankNifty rolls are below average as of Wednesday indicating that banking stocks could be weaker than the previous expiry. The movement for the day will hinge earlier on the Railway Budget. People don’t really expect the railway minister to hike passenger fares and freight rates besides some possible changes in Tatkal fares. Railway related stocks ended on a mixed note ahead of the Railway Budget. Some stocks which have galloped in recent days saw profit booking and some merciless selling too.

The outlook is a flat start. Global markets are mixed, U.S. stocks ended Wednesday's choppy session on a flat note. However, the Dow Jones eked out marginal gains to shut shop at fresh record. The S&P 500 SPX and Nasdaq Composite closed slightly lower breaking its ten-day winning streak. The Asian markets are trading mixed the Nikkei index in Japan returned to its winning ways while the Hang Seng index in Hong Kong was trading lower.

Brent crude oil rose above $59 a barrel. Saudi Arabia's oil minister was quoted as saying that oil demand was growing.

Yes Bank has raised Rs 1,000 crore against a targeted Rs 500 crore by issuing green infrastructure bonds.

Adlabs Entertainment’s initial public offer (IPO) is expected to open on March 10. The issue will close on March 12, as per the latest data available with the capital markets regulator Sebi.

IndusInd Bank will issue long-term infrastructure bonds or non-convertible debentures on private placement basis to raise about Rs 2,000 crore.

Finance Minister Arun Jaitley said that the top priority for the government is to meet its fiscal deficit despite the urgent need for investments. During a meeting at the Parliamentary Consultative Committee, Jaitley said that the global environment is ripe for India as an increasing number of investors are showing interest in the market. He added that the investments in infrastructure, manufacturing, and agriculture sector will take precedence in Budget over other segments.

Today is also the third and final day of IIFL’s sixth Enterprising India Conference. This year, we have nearly 100 participating companies, cumulatively valued at US$760bn. All major sectors are well represented and there is good representation across sizes. 34 companies have market cap of more than US$5bn, 34 companies have market cap of US$1-5bn, and 28 companies have market cap of less than US$1bn.

Jaitley said that the economic indicators are moving in the right direction, and the economic situation overall is convincing. He further said that the growth rate in current fiscal based on the old method is better than the previous year. He said that the economy expanded at 4.7% in 2013-14 fiscal as per old methodology while it grew 6.9% as per the new system.

Bharti Airtel is reportedly raising as much as $415 million through stake sale in Bharti Infratel.

DLF could see some action on reports that its sales bookings may cross Rs 3,000 crore this fiscal.

​Investors will not able to buy and redeem mutual fund units on February 28 even as the stock markets remain open​, says a report.

Jaitley said that the economic indicators are moving in the right direction, and the economic situation overall is convincing. He further said that the growth rate in current fiscal based on the old method is better than the previous year. He said that the economy expanded at 4.7% in 2013-14 fiscal as per old methodology while it grew 6.9% as per the new system.

Shares of ABG Shipyard ended 14% higher to Rs. 231 on reports that Mahindra Group is in talks with ABG Shipyard to acquire a large strategic stake in the maker of naval ships and vessels.

Shares of Jubilant Lifesciences ended flat at Rs 165 after company has received Abbreviated New Drug Application (ANDA) final approval from the US Food and Drug Administration (US FDA) for Irbesartan Tablets USP, 75 mg, 150 mg, and 300 mg and Cetirizine Hydrochloride Tablets (Chewable), 5 mg and 10 mg.

Visagar Polytex was locked at the 20 per cent upper circuit for the second straight trading session on the back of unusually high volume.

Infosys is planning to appoint SAP's chief technology officer for security, Gordon Muehl as its security czar, according to a report.

Dalmia Bharat Ltd has announced that the Company's subsidiary Company, Dalmia Cement (Bharat) Limited on February 25, 2015 has increased its stake in OCL India Limited from 48% to 74.6% through inter-se transfer within the promoter group of OCL India Limited.

Shares of SpiceJet ended 3% higher to Rs 24.95 on BSE after the airline has cleared all tax dues.

Shares of Godrej Consumer Products Ltd ended flat at Rs1125 after the company has announced that the Company has entered into an agreement with the Darling Group for increasing its shareholding in Darling South Africa and Mozambique businesses to 90% in line with its intent of gradually scaling up its ownership of the Darling businesses.

Godrej Consumer increases stake in Darling Group to 90%...stock flat

Godrej Consumer Products Ltd has announced that the Company has entered into an agreement with the Darling Group.

Godrej Consumer Products Ltd has announced that the Company has entered into an agreement with the Darling Group for increasing its shareholding in Darling South Africa and Mozambique businesses to 90% in line with its intent of gradually scaling up its ownership of the Darling businesses.

The stock is trading at 1130, up 1%.

The stock has hit a high of Rs 1145 and a low of Rs 1130.

Total traded quantity on the counter stood at over 355 shares.

Govt will cut budget allocation for Social Welfare Programs; States will fill the deficit

The ministries that are responsible for carrying out social welfare schemes may see their budget shrink as the government plans to cut down its contribution by 25-30%.

Social welfare, majorly funded by Centre and run by states will be rejigged in the upcoming budget. The Narendra Modi government will execute on his promise of making states full partners in India's development, which will mean lower contribution to centrally sponsored schemes (CSS). The ministries that are responsible for carrying out social welfare schemes may see their budget shrink as the government plans to cut down its contribution by 25-30%.  

 Freedom to states

 The proposed change comes after the YV Reddy led 14th Finance Commission recommended that the states should get a greater share in participation. This implies that though the department of agriculture will get 25% less funds to the tune of Rs. 16,650 crore from Rs. 22,300 crore, the difference has to be met by the states. It is expected that the human resource ministry too will witness a budget cut of Rs. 12,000 crore. 

  Various social sector ministries including women and child development, panchayati raj, drinking water and sanitation will have to modify their proposals in light of the planned budget cut and transfer of more power to the states. As of now, the government is planning to cut the contribution from 75% to 50% in some states and to 40% in other while it may hand over full responsibilities to certain states. Though the states will bring in the additional money to meet the target, but it will have more power in its hands to design and customize programmes as per their needs.  

 More Burdens on States  

 Meanwhile, the budget may not be allocated for the national food security mission, which was one of the chief initiatives introduced by the previous UPA government. The initiative is now merged with the national mission of sustainable agriculture, which itself received lower allocation by Rs. 400 crore. The Centre may like the concept, but experts are clearly not. According to experts, the government should instead introduce direct cash payments to benefit poor rather than run welfare schemes in the name of poor. Ravi Srivastava, professor of economics at Jawaharlal Nehru University said that the concept will only put more burdens on poor states, which will ultimately impact the poor section of the society.

Sensex surges 150 points...Auto, Bankex lead

Auto, Consumer Durables, Power, banking, healthcare, metal, realty, capital goods, FMCG, Oil and gas indices are the gainers. 

At 9:17AM, the S&P BSE Sensex is trading at 29,174 up 170 points, while NSE Nifty is trading at 8,801 up 39 points.

The BSE Mid-cap Index and BSE Small-cap Index was trading up at 1%.

Auto, Consumer Durables, Power, banking, healthcare, metal, realty, capital goods, FMCG, Oil and gas indices are the gainers.

A lot is happening back home in India too even as the Budget session of Parliament is underway.

 The outlook is a start in the green. Global cues are mostly positive but given the eve of F&O expiry and upcoming budget, choppiness could set in. 

The Dow rose half a percent while S&P 500 gained 0.3%. Nasdaq gained 0.14%. Asian markets are seeing a mixed trend with Japan's Nikkei higher and Hong Kong's Hang Seng index trading lower. China's Shanghai index is also in the red.

The Modi government introduced the 14th Finance Commission's report in the Parliament. Finance Minister Arun Jaitley moved the MoA (memorandum of association) on Finance Commission report in the Lok Sabha. The government said that devolution to states will be at Rs. 3.48 trillion in FY15, while it would be around Rs. 5.6 trillion in FY16.

Jaitley said that the every spending within the territory of India is going to add to the growth process. The Central Government is happy that the allocation of financial resources to the states have been augmented, Jaitley added.

Top economic news of the day - February 25, 2015

Auctions for the 21 ready-to-produce coal blocks have been put off to March 2. This follows a petition filed by Sarda Energy and Minerals Ltd in the Delhi High Court.

While acknowledging that the country's external sector indicators have proved in the first six months of 2014-15, the central bank has cautioned that there is no room for complacency in an uncertain global macroeconomic environment.
 
Auctions for the 21 ready-to-produce coal blocks have been put off to March 2. This follows a petition filed by Sarda Energy and Minerals Ltd in the Delhi High Court. 
 
Private sector companies are less keen on their capital expenditure plans, which may decline by an annual rate of 11% this fiscal, according to a survey report by Crisil.

Sensex, Nifty to open positive, turn volatile

The outlook is a start in the green. Global cues are mostly positive but given the eve of F&O expiry and upcoming budget, choppiness could set in. 

The Fed seems to be patient on a decision regarding raising interest rates. With too many Americans remain unemployed, wage growth sluggish and inflation running below the Fed's target, Federal Reserve Chair Janet Yellen in her semiannual economic report to Congress, said FOMC's assessment that it can be patient in beginning to normalize policy means that the Committee considers it unlikely that economic conditions will warrant an increase in the target range for the federal funds rate for at least the next couple of FOMC meetings.

Greece, secured a four-month extension of its financial rescue on Tuesday. The euro zone partners gave a nod to a reform plan even as IMF Managing Director Christine Lagarde said the reform plan was "not very specific." ECB President Mario Draghi too was guarded in welcoming the developments.

A lot is happening back home in India too even as the Budget session of Parliament is underway. The outlook is a start in the green. Global cues are mostly positive but given the eve of F&O expiry and upcoming budget, choppiness could set in. The Dow rose half a percent while S&P 500 gained 0.3%. Nasdaq gained 0.14%. Asian markets are seeing a mixed trend with Japan's Nikkei higher and Hong Kong's Hang Seng index trading lower. China's Shanghai index is also in the red.

The Modi government introduced the 14th Finance Commission's report in the Parliament. Finance Minister Arun Jaitley moved the MoA (memorandum of association) on Finance Commission report in the Lok Sabha. The government said that devolution to states will be at Rs. 3.48 trillion in FY15, while it would be around Rs. 5.6 trillion in FY16.

Jaitley said that the every spending within the territory of India is going to add to the growth process. The Central Government is happy that the allocation of financial resources to the states have been augmented, Jaitley added.

The controversial Land Acquisition Bill was introduced by the government in the Lok Sabha  amid  protests by an NDA ally. A report said that the entire opposition staged a walk-out calling the bill "anti-farmer and anti-poor".

Parliamentary Affairs Minister M Venkaiah Naidu said that BJP government was willing to discuss all provisions of the bill but his effort went in vain.

Mindtree Ltd is scouting for large deals in India and abroad worth more than $200 mn in cash and cash equivalents, says report.Report said that the team is headed by Rahul Malhotra, who joined Mindtree from rival Tech Mahindra.

iGate is planning to lay off 5-10% of its workforce, or around 1,500 to 3,000 people, over the next three months, according to reports.Report said that the layoffs are said to be partly because of a huge bench that the company created.

Shares of Spicejet Ltd were up 2% at Rs 24.55 after the company has announced the entire shareholding of Mr. Kalanithi Maran and Kal Airways Private Limited (the existing Promoters) has been transferred to Ajay Singh on February 23, 2015.

Railway related stocks ended with deep cuts a couple of trading sessions ahead of the Railway Budget. Titagarh Wagons, which, hit a fresh life-time high at Rs. 724, on Monday was locked at the 10% lower circuit at Rs. 617 on Tuesday. Kalindee Rail Nirman Engineers slumped 12.5 per cent to Rs. 139. Texmaco Rail & Engineering plunged nearly 9 per cent to Rs. 144, and Stone India shed 7 per cent at Rs. 85.

Shares of HUL ended 3% higher at Rs. 913.

Shares of Maruti Suzuki ended flat at Rs. 3,588, after the company launched a refreshed version of Dzire with introductory prices ranging from Rs 5.07 lakh to Rs 7.81 lakh (ex-showroom Delhi).

Suzlon Group has successfully completed installing and commissioning of over 350 MW wind energy in Brazil over a period of 16 months ending Nov 2014 with bulk of 309 MW being added in Calendar Year (CY)2014. This combined capacityincludes projects located in the high wind states of Rio Grande do Norte & Ceara in Brazil 

Regulators must reply on facts & not overheated rhetoric: ICI

Mutual fund fees in retirement plans have fallen for two decades, even as the services provided to employers and plan participants have increased, ICI says 

ICI President and CEO Paul Schott Stevens on Monday said, “America’s retirement savers need continued access to information and guidance to make sound investment decisions.”

Stevens further said, “The mutual fund industry provides a tremendous amount of support and information to retirement savers, including disclosure on the cost of investing. Mutual fund fees in retirement plans have fallen for two decades, even as the services provided to employers and plan participants have increased.”

Stevens made the above statements in response to US President Barack Obama’s remarks about the forthcoming Department of Labor’s re-proposed fiduciary duty rule.

US President Barack Obama has given the Department of Labor the green signal for the redraft of a rule to amend the definition of fiduciary under the Employee Retirement Income Security Act (ERISA), according to The White House.

Obama called for a new fiduciary standard proposal from the Department of Labor to protect middle-class retirement savers that he said are being hurt by some advisers' conflicts of interest.

Speaking at the AARP's Washington headquarters Monday, Obama said, “The rules governing retirement investments were written 40 years ago... Today, I am calling on the DOL to update the rules.”

Obama said that while many financial advisers do put their clients first, “there are no uniform rules of the road that require retirement advisers to act in the best interests of their clients.”

Obama endorsed stricter standards for brokers and others who recommend retirement-account investments.

“It is vital that any proposed rules be carefully tailored to ensure that employers and savers still have access to that support and service. Achieving the goal of thoughtful and balanced regulation is never easy, and regulators must reply upon data and facts—not overheated rhetoric,” Stevens added.

“We will carefully review the rule when it is proposed. We urge the Administration to work constructively toward a rule that preserves and improves the services that employers and savers rely upon today,” Stevens further said.

FIIs need RBI approval to buy more shares in ING Vysya Bank

At 10:28 AM, shares of ING Vysya Bank were trading flat at Rs. 925, while the benchmark BSE Sensex is trading up 54 points at 29,030

Reserve Bank of India on Monday said foreign investors would be required to obtain RBI's prior approval for buying further shares in ING Vysya Bank, as foreign shareholding in the bank has reached the trigger limit.

The foreign shareholding through FIIs/Foreign Portfolios Investors (FPIs)/NRIs/PIOs/ADR/GDRs in ING Vysya Bank has reached the trigger limit, RBI said in a press release.

"Hence, further purchases of equity shares of this bank would be allowed only after obtaining prior approval of the Reserve Bank of India," RBI added.

At 10:28 AM, shares of ING Vysya Bank were trading flat at Rs. 925, while the benchmark BSE Sensex is trading up 54 points at 29,030

Global metals deal volumes to remain subdued; CAGR of 1.9% in 2015: PwC

The contrasting fortunes of aluminium and steel companies look set to continue into 2015. Much of the steel sector remains in defensive mode, while there is a much more positive outlook in aluminium

There will be weak momentum in the metals deals market in 2015 according to a new report from PwC.

The report, Metals Deals: Forging ahead, predicts that, as in 2014, the lack of convincing, strong and sustainable growth in the global economy will keep metals deals in a low gear, or even stalling in some parts of the world.
 
Jim Forbes, global metals leader at PwC, said, “With the current level of commodity prices and the downward pressure on economic forecasts, we don’t expect dealmakers to be rushing to the table in 2015. The deal making that will take place is likely to be driven primarily by specific country, industry or company considerations, rather than the global cycle, the direction of which remains uncertain.”
 
Modelling carried out by PwC predicts that global metals deal volumes will remain subdued, with compound annual growth rate (CAGR) of 1.9% in 2015, compared with 0.6% in 2014. Metals deal values are predicted to grow by 47%. This figure may seem high but it comes off a very low base with deal value in the sector close to the lowest it has been in the past decade. The predicted upturn in deal value is mainly due to a relatively large expected jump in the aluminium price index.
 
PwC’s subdued forecast for 2015 metals deals is strongly affected by the uncertainties stalking the global economy such as the oil price dive, concerns over Chinese growth, currency fluctuations, eurozone recession and the spectre of deflation. Growth in demand for metals in China, the largest global consumer of both steel and iron ore, is expected to follow its 2014 pattern and decline further in 2015. Recoveries in metals demand in Europe, the US and Japan are not anticipated to be strong enough to offset this slowdown.
 
Low oil prices create both winners and losers
Continued low oil prices will affect metals deals, particularly those with high oil sector exposure: those with output geared towards consumers markets, such as the automotive industry, are likely to gain. But those focused on pipelines or other oil infrastructure will need to factor in capital spending cutbacks by customers. Similarly, companies supplying steel for large infrastructure projects could face constraints where these are sponsored by governments that are hit by lower oil revenues.
 
Focus turns to non-M&A alliances
54% of metals company CEOs plan to partner with other entities this year, according to PwC’s 2015 Global CEO Survey. This is a huge increase on 2014’s figure of 16%. Their main reasons are to get access to new technologies, new customers or new geographic markets without having to make all of the investments themselves.
 
A tale of two metals
The contrasting fortunes of aluminium and steel companies look set to continue into 2015. Much of the steel sector remains in defensive mode whereas there is a much more positive outlook in aluminium. Lower oil and energy prices will benefit the cost side of both sectors but the demand impact will be much more mixed. Any positive impact on demand is more likely to benefit the aluminium sector. Companies in the steel sector are more exposed to the negative impact that will flow from energy industry capital expenditure reductions. Aluminium deal activity is likely to continue to be focused downstream, with companies seeking to make strategic acquisitions to move further away from the commodity end of the value chain.