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Reports India

Indian stock market daily morning report (July 11, 2014, Friday)

July 11, 2014, Friday, 06:26 GMT | 02:26 EST | 10:56 IST | 13:26 SGT
Contributed by Keynote Capitals

Views on markets today

- Markets ended lower, amid a volatile trading on Thursday, as investors booked profits at higher levels even as the Finance Minister Arun Jaitley in his maiden budget focused on stimulating economic growth.

The 30-share Sensex ended down 72 points at 25,373 after moving in a 800-point range and the 50-share Nifty ended down 17 points at 7,56- after moving in a 252-point range.

Finance Minister focused on reviving structural problems of the ailing economy. He added, fiscal prudence will lead to fiscal consolidation and aimed at a sustained growth of 7-- pct in next three-four years.

The fiscal deficit for the current financial year (2014-15) was seen at 4.1% of GDP and 3.6% for the next financial year (2015-16) and further lower at 3% in FY17.

Shares of 5 defence equipment makers fell by 0.01% to 2.88% on BSE after Finance Minister Arun Jaitley in the Union Budget 2014-15 raised foreign direct investment in the defence sector to 49% from 26%.

Bharat Electronics (down 2.88%), Dynamatic Technologies (down 1.92%), Astra Microwave Products (down 1.47%), Walchandnagar Industries (down 1.35%) and BEML (down 0.01%), edged lower.

Shares of - companies that run insurance business were mixed on BSE after Finance Minister Arun Jaitley in the Union Budget 2014-15 raised foreign direct investment in the insurance sector to 49% from 26%.

HDFC (up 1.66%), Aditya Birla Nuvo (up 0.63%), Bajaj Finserv (up 0.32%) and Religare Enterprises (up 0.02%), edged higher. However, State Bank of India (down 1.52%), Reliance Capital (down 1.39%), ICICI Bank (down 1.08%) and Max India (down 0.37%), edged lower.

- Coal India rose 0.88% to Rs 368.85 on BSE in volatile trade after the finance minister said that existing impasse of coal sector will be resolved.

- Among the BSE Sectoral Indices 7 indices ended the day in positive while 5 indices ended the day in negative. Top Gainers: BSE Realty up by 4.96% and bSe Power by 1.12%. Top Losers: BSE Consumer Durables down by 3.11%, BSE Auto by 0.91%.

Market breadth was positive at ~1.34 as investors bought large cap stocks. On provisional basis, FII's bought Rs 1.61bn worth of Indian equities and DII's bought Rs 4.89bn worth of equities.

Buzzing Stocks

- Bharti Airtel rose 1.15% to Rs 343.95 on BSE after the company through its Netherlands subsidiary and Helios Towers Africa announced an agreement for the divestment of over 3,100 telecoms towers from Airtel to HTA.

- OnMobile Global rose 1.85% to Rs 35.85 on BSE after a foreign fund hiked its stake in the firm on Wednesday, 9 July 2014.

- Aban Offshore tumbled 8.85% to Rs 735.80 on BSE, with the stock extending Wednesday's slide triggered by the firm approving the allotment of shares to eligible QIBs.

- Unichem Laboratories tumbled 5.75% to Rs 204.95 on BSE after the European Commission decided to impose a fine on Niche/Unichem (jointly and severally).

- Sadbhav Engineering rose 3.37% to Rs 201 on BSE after the company said that the JV led by the company has been awarded the project/work by South West Mining, Barmer, Rajasthan in the name of JV known as Sadbhav -Vishnushiva.

- Huhtamaki PPL fell 2.78% to Rs 143.40 on BSE, with the stock declining on profit booking after gaining 11.23% in prior three trading sessions.

- JSW Steel lost 2.66% to Rs 1160.10 on BSE, with the stock sliding amid volatility after the company said its total crude steel production rose 8% to 3.10 million tonnes in Q1 June 2014 over Q1 June 2013.

- L&T (down 1.58%), IL&FS Transportation Networks (down 5.24%), IRB Infrastructure Developers (down 1.67%), Ashoka Buildcon (down 1.25%) and GMR Infrastructure (down 1.06%) edged lower.

- Ten real estate shares fell by 0.06% to 4.77% on BSE after Finance Minister in the Union Budget 2014-15 proposed to provide necessary incentives for introducing real estate investment trusts.

Unitech (down 4.77%), Godrej Properties (down 4.64%), Sunteck Realty (down 2.86%), Sobha Developers (down 2.76%), Oberoi Realty (down 1.08%), Parsvnath Developers (down 0.97%), HDIL (down 0.78%), Anant Raj (down 0.61%), Indiabulls Real Estate (down 0.12%) and D B Realty (down 0.06%), edged lower.

- Petronet LNG rose 2.32% to Rs 176.20 on BSE, with the stock recovering on bargain hunting after recent slide.

- Hindalco Industries rose 0.85% to Rs 172.35 on BSE, with the stock extending Wednesday's 1.21% gains triggered by US based aluminium major Alcoa Inc reporting better-than-expected Q2 earnings.

- Shares of five companies engaged in road construction declined 1.06% to 5.24% on BSE after the finance minister said the government is allocating Rs 37850 crore for road building plan.

L&T (down 1.58%), IL&FS Transportation Networks (down 5.24%), IRB Infrastructure Developers (down 1.67%), Ashoka Buildcon (down 1.25%) and GMR Infrastructure (down 1.06%) edged lower.

Economic and Corporate Developments

UNION BUDGET 2014 Highlights

Prime Minister Narendra Modi's new government on Thursday unveiled a first budget of structural reforms that seek to revive growth, while spurning the temptation to resort to higher borrowing.

Here are the highlights of the budget presented by Finance Minister Arun Jaitley.

Fiscal Deficit

- Accepts fiscal deficit target of 4.1 percent of GDP for 2014/15

- Fiscal deficit seen at 3.6 percent of GDP in 2015/16

- Finance Minister says: "We cannot spend beyond our means"

- Tax-to-GDP ratio must be raised


- Aims for sustained growth of 7-8 percent in the next 3-4 years

- Finance minister says he is bound to usher in policies for higher growth, lower inflation


- Jaitley vows to maintain a stable tax environment but stops short of scrapping rules on retrospective tax

- All pending cases of retrospective tax for indirect transfers to be examined by committee before action is taken

- Government will not ordinarily bring any change retrospectively that creates a new liability, Jaitley says

- Aims to approve goods and services tax by end of this year

- Extends 5 percent withholding tax on corporate bonds until June 30 2017

- To provide necessary tax changes to introduce real estate investment trusts and infrastructure investment trusts

- Extends 10-year tax holiday for power generation companies

Revenues and Expenditure

- Estimates that total expenditure will be 17.95 trillion rupees in 2014/15

- Revenue deficit seen at 2.9 percent of GDP in 2014/15

- Capital receipts seen at 739.5 billion rupees in 2014/15

- Retains tax collection targets and makes no major changes to direct tax rates

- Allocates 2.29 trillion rupees for defence spending in 2014/15; capital outlay raised    by 50 billion rupees over Interim budget

- Earmarks 70.6 billion rupees to create 100 "smart cities"

- Proposes 50 billion rupees for warehousing capacity; 100 billion rupees of private capital for start-up companies; and 378 billion rupees of investment in national and state highways

- 40 billion rupees for affordable housing proposed through national housing bank; 80 billion rupees proposed for rural housing scheme

Foreign Direct Investment

- Raises limit on foreign direct investment in defence sector from 26 percent to 49    percent

- Raises FDI limit in insurance sector from 26 percent to 49 percent


- Plans to make food and petroleum subsidies more targeted

- Rural job-guarantee scheme, which provides 100 days of paid employment a year, will become more focused on asset creation


- Will focus on acheiving 4 percent growth per year in agriculture

- Sets farm credit target at 8 trillion rupees for 2014/15

- Proposes a long-term rural credit fund with an initial corpus of 50 billion rupees

Finance Minister Comments

- "The fiscal deficit target of 4.1 percent put out by my predecessor is indeed daunting. But I have decided to accept the target."

- "The task before me is challenging because we need to revive growth in manufacturing and infrastructure. We need to introduce fiscal prudence and cannot spend beyond our means. For this, the tax-GDP ratio must be improved."

- "A high-level committee will scrutinize retrospective tax cases. We are committed to providing a stable tax regime."

- "We have no option but to take some bold steps to spurt economy; these are only the first steps and are directional."

- "[India's farming sector] has    risen to the challenge of making India largely    self sufficient    in providing food for growing population" but there is "an urgent need to set up investment, both public and private".