The market is likely to see a gap-down opening on negative Asian stocks. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could slump 46 points at the opening bell.
In overseas markets, Asian stocks dropped with Japanese stocks falling behind their peers after the Bank of Japan (BoJ) kept monetary policy steady as was widely expected. US stocks ended lower yesterday, 15 June 2016, marking a fifth session of losses, after the US Federal Reserve left interest rates unchanged and backed off an aggressive stance on future rate hikes.
The US Federal Reserve after a conclusion of two-day meeting yesterday, 15 June 2016, left interest rates unchanged and signaled it's likely to take an even slower approach on raising the cost of borrowing against a backdrop of slower US job creation and fresh worries about economic events abroad. The Fed trimmed its estimate of US growth in 2016 to 2% from 2.2%, but left its long-run forecast intact. The Fed also tempered its future expectations for the economy. The central bank indicated it will raise rates three times apiece in 2017 and 2018 instead of four. And in the long run, the FOMC predicts the Fed-funds rate would rise to 3% instead of 3.3%. Fed officials also expect the labor market to show more improvement, with the unemployment rate remaining below 5% for the next three years.
Yellen also expressed concern in a press conference after the Fed meeting about the low level of US business investment and said that vulnerabilities in the global economy remain. She acknowledged the pending UK vote on 23 June 2016, known as Brexit, on whether to leave the European Union was a factor in the Fed's decision to stay its hand.
Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 108.23 crore yesterday, 15 June 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 234.10 crore yesterday, 15 June 2016, as per provisional data.
Shares of NTPC and Coal India will be in focus. NTPC said that pursuant to joint venture agreement dated 16 May 2016 signed with Coal India, a Joint Venture Company in the name of "Hindustan Urvarak & Rasayn Limited", with 50:50 shareholding by NTPC and Coal India has been incorporated on 15 June 2016. The joint venture company will take up revival of Gorakhpur and Sindri plants of Fertilizer Corporation of India by setting up ammonia urea plants at each locations.
Wipro announced the launch of its analytics solution, Data Discovery Platform. The solution provides pertinent business insights across the value chain of an industry through the predefined apps. The platform will enable businesses to embark on an analytics journey with value added services of process simplification and business transformation. The announcement was made after market hours yesterday, 15 June 2016.
Shares of public sector oil marketing companies (PSU OMCs) will be in focus as prices of petrol and diesel were revised with effect from midnight of 15 June 2016. Petrol prices will be raised by Rs 0.05 a litre at Delhi (including state levies) with corresponding price revision in other states. With this change, the price of Petrol in Delhi will be increased to Rs 65.65 a litre. Diesel price was raised by Rs 1.26 a litre at Delhi (including state levies) with corresponding price revision in other states. With this change, the price of diesel in Delhi rose to Rs 55.19 a litre.
Stocks of aviation companies may extend gains registered yesterday, 15 June 2016, after Union Cabinet approval a civil aviation policy which among other things aims at boosting regional air connectivity. The government has abolished the requirement of 5 years of domestic flying as one of the two key prerequisites for starting international operations by an Indian carrier. Henceforth, an airline can commence international operations provided it deploys 20 aircrafts or 20% of its total capacity (in term of average number of seats on all departures put together), whichever is higher, for domestic operations.
The regime of bilateral rights and code share agreements will be liberalised leading to greater ease of doing business and wider choice to passengers. Open skies policy will be implemented on a reciprocal basis for SAARC countries and countries beyond 5,000 kilometer from Delhi. A method will be recommended by a committee headed by the Cabinet Secretary for the allotment of additional capacity entitlements wherever designated Indian carriers have not utilised 80% of their bilateral rights but the foreign airlines/countries have utilised their part and are pressing for increase in the capacity.
The civil aviation ministry will continue to encourage development of airports by the state government or the private sector or in public private partnership (PPP) mode and endeavour to provide regulatory certainty. Future greenfield and brownfield airports will have cost efficient functionality with no compromise on safety and security. Meanwhile, the existing ground handling policy is being replaced with a new framework to ensure fair competition. All domestic scheduled airline operators including helicopter operators will be free to carry out self-handling at all airports. The Viability Gap Funding (VGF) will be funded by a small levy per departure on all domestic routes other than Cat II/Cat IIA routes, RCS (Regional Connectivity Scheme) routes and small aircraft at a rate as decided by the Ministry of Civil Aviation from time to time. A detailed scheme will be put up in the public domain for stakeholders' consultations. The announcement of the government's nod for the civil aviation policy hit the market after trading hours yesterday, 15 June 2016.
Positive global stocks and reports indicating sooner than expected implementation of the Goods and Services Tax (GST), the biggest tax reform, helped key benchmark indices log strong gains yesterday, 15 June 2016. The Sensex gained 330.63 points or 1.25% to settle at 26,726.34, its highest closing level since 9 June 2016.
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