Sensex, Nifty Hit Record Highs Amid Pre-budget Rally

BSE Sensex and Nifty rose over 1 per cent today to set new all-time highs. Strong global markets, easing of global oil prices and expectations of reform measures in the Budget spurred a rally in Indian markets.

Brent crude, extending its decline, lost 12 cents to $112.17 a barrel. Brent crude had hit $115 a barrel last month as Iraq crisis flared up.

Finance Minister Arun Jaitley’s comment on Tuesday that “mindless populism” in policymaking needed to be checked stoked expectations of a pragmatic budget on July 10.

The rupee also rose to nearly 3-week high of 59.75 against the dollar, boosting the sentiment.

Sensex rose over 300 points nearly 280 points to an all-time high of 25,828, breaching its earlier high of 25,731. The 50-share Nifty jumped nearly 90 points to post a new high of 7,723.55. Analysts remain positive on Indian markets ahead of the Budget.

Metal stocks Sesa Sterlite, NMDC, JSPL and Tata Steel were up between 1.5 per cent and 2.7 per cent. Among the banks, Bank of Baroda, Kotak Mahindra Bank and ICICI Bank rose over 1 per cent. Oil & gas heavyweight Reliance Industries advanced nearly 1.5 per cent.

At 1:45 p.m., the Nifty was up 82 points to 7,717 while Sensex rose 287 points to 25,804.

In other global markets, Asian stocks were at a three-year peak on Wednesday after a round of upbeat global economic data whetted risk appetites and helped Wall Street taste all-time highs.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1 per cent to 499.15, ground not visited since May, 2011. Japan’s Nikkei added 0.3 percent and notched up its loftiest level in more than five months.

Most of the European markets were also in the green in early trade. Overnight, on the Wall Street, the Dow and S&P 500 had both scored record closing highs, as did the MSCI world equity index. The Dow gained 0.77 per cent and the S&P 500 0.67 per cent, while the Nasdaq put on 1.14 per cent.


Budget 2014: Finance Ministry may double tax exemption limit under 80C to Rs 2 lakh

Seeking to boost household savings, the Finance Ministry is considering doubling the exemption limit for investments by individuals in financial instruments to Rs 2 lakh.

Presently the investments and expenditures up to a combined limit of Rs 1 lakh get exemptions under Sections 80C, 80CC and 80 CCC of the Income Tax Act.

Sources said the revenue department is assessing the burden on the exchequer in case of increase in the benefit limit. The announcement is expected in the Budget.

The Budget for 2014-15 will be presented by Finance Minister Arun Jaitley in the Lok Sabha on July 10.

There have been demands from bankers and insurers to hike the tax exemption limit from Rs 1 lakh per annum to encourage household savings.

The savings rate has come down from over 38 per cent of GDP in 2008 to 30 per cent in 2012-13.

The hike in the exemption limit, sources said, would provide much needed relief to the salary earners who are reeling under the impact of high inflation.

The Direct Taxes Code (DTC) too has recommended that the combined ceiling for investments and expenditures be raised to Rs 1.5 lakh per annum.

The financial instruments which enjoy exemption include life insurance premium, public provident fund, employees provident fund, National Savings Certificates, repayment of capital on home loan, equity linked saving schemes sold by mutual funds and bank FDs of five year maturity.


Rollovers soar, hint market may gain 5-6% in the run-up to Budget 2014

Traders carried forward bullish futures bets to the July series on expiry of the June contracts on Monday on expectations the market could rebound in the run-up to the Union Budget on July 10. Fresh buildup of positions in Nifty options suggests the benchmark index could gain about 5-6% by the Budget day from the current levels. Rollover in Nifty futures from June series to July was 71% against the three-month average of 59%.

Open interest — outstanding market positions for July series — was around Rs11,000 crore on Thursday, which is almost similar to the build-up when the May series expired. “Traders have carried forward long positions despite the market remaining range-bound for the past three weeks on expectations of reform-oriented budget,” said Amit Gupta head of derivatives research at ICICI Securities.



Budget 2014: FM Arun Jaitley needs to consider easing gold import curbs, says Nirmala Sitharaman

Commerce minister Nirmala Sitharaman said that her ministry has recommended that the finance ministry seriously consider easing import curbs on gold to help the beleaguered gems and jewelery export sector.

Speaking to ET, Sitharaman, who is also minister of state for finance, said that while the current account deficit (CAD) crisis had been somewhat ameliorated by the import curbs on gold, it had deeply affected revenues generated by the gems and jewellery’s sector, an important earner of foreign exchange.

“During the pre-budget consultation, there has been a lot of thinking going on, on the gold issue. We have had so many of our exporters telling us, especially our gems and jewellery exporters who have made significant contributions to our balance of payments situation, that they have suffered. We don’t want that,” she said.

She added that the contribution of this sector to export revenues meant that the issue of curbing gold imports has to be looked at afresh. “They are telling us, that very well there is a crisis due to which these curbs were brought in, but now this is a new crisis, that of exports getting hit,” she said.

On that count we have strongly recommended to the finance minister that a fresh look has to be taken at import curbs on gold, that a sector which is instrumental in bringing in so much revenue cannot be hit like this,” she added.

While the crisis in Iraq was troublesome as far as hardening of oil prices was concerned, she said that the petroleum ministry had assured the government that “alternative sourcing of fuel” was going on and that it would be possible to control inflationary pressures of that.

On the question of food security and differences with developed countries over food security which came to the fore at the Bali Round of the WTO talks, Sitharaman said she had spoken to the US trade secretary, and had communicated that the position taken by the government of India had been absolutely consistent with the WTO.

© 2008-17. All Rights Reserved. Epic Research Pvt. Ltd.