Key benchmark indices further trimmed intraday gains in early afternoon trade as the Shanghai Composite index extends losses in late trading there. The barometer index, the S&P BSE Sensex, was up 28.92 points or 0.13%, off 72.18 points from the day's high and up 1.12 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Metal and mining stocks edged lower. IDFC gained on hopes of getting a bank licence. Federal Bank gained after the bank during market hours said that Cabinet Committee of Economic Affairs has accorded approval for foreign equity participation upto 74% of the paid up capital of the bank, with sub-limit of 49% by FII's and 24% for NRIs. Tech Mahindra rose after the company announced signing a formal teaming agreement with Sierra Wireless to work collaboratively to develop and deploy end-to-end M2M solutions for customers worldwide.
Key benchmark indices edged higher in early trade on firm Asian stocks. The Sensex and the 50-unit CNX Nifty, both, hit 4-1/2-week high. Key benchmark indices trimmed initial gains in morning trade. Key benchmark indices hovered in green in mid-morning trade. Key benchmark trimmed intraday gains in early afternoon trade as the Shanghai Composite index extends losses in late trading there.
The market may remain volatile in the near future as traders roll over positions in the futures and options (F&O) segment from the near-month February 2014 series to March 2014 series. The near month February 2014 F&O contracts expire tomorrow, 26 February 2014. The stock market remains closed on Thursday, 27 February 2014, on account of Mahashivratri.
Foreign institutional investors (FIIs) bought shares worth a net Rs 266.87 crore on Monday, 24 February 2014, as per provisional data from the stock exchanges.
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At 12:15 IST, the S&P BSE Sensex was up 28.92 points or 0.13% to 20,840.36. The index jumped 101.10 points at the day's high of 20,912.54 in early trade, its highest level sine 24 January 2014. The index rose 27.80 points at the day's low of 20,839.24 in early afternoon trade.
The CNX Nifty was up 9.85 points or 0.16% to 6,195.95. The index hit a high of 6,216.85 in intraday trade, its highest level since 24 January 2014. The index hit a low of 6,195.80 in intraday trade.
The BSE Mid-Cap index was up 29.61 points or 0.46% at 6,471.21. The BSE Small-Cap index was up 14.98 points or 0.23% at 6,430.61. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,134 shares gained and 1,119 shares fell. A total of 155 shares were unchanged.
The total turnover on BSE amounted to Rs 933 crore by 12:20 IST, compared with Rs 636 crore by 11:20 IST.
Among the 30-share Sensex pack, 16 stocks declined and rest of them gained.
GAIL (India) (down 1.94%), NTPC (down 1.96%) and Coal India (down 1.33%) edged lower from the Sensex pack.
Many metal and mining stocks edged lower. Sesa Sterlite (down 0.9%), NMDC (down 1.7%), JSW Steel (down 0.09%), Hindustan Zinc (down 0.21%), Steel Authority of India (Sail) (down 2.45%), Jindal Steel & Power (JSPL) (down 0.33%) and Tata Steel (down 0.98%) declined. Hindustan Copper (up 1.33%), Hindalco Industries (up 0.56%) and National Aluminum Company (up 0.46%) gained.
IDFC gained 2.12% on hopes of getting a bank licence. As per reports, an advisory committee is due to give its recommendations on bank licences by this weekend to the Reserve Bank of India.
Federal Bank gained 2.79%. The bank during market hours said that Cabinet Committee of Economic Affairs has vide their letter dated 12 February 2014 (received today, 25 February 2014) have accorded their approval for foreign equity participation upto 74% of the paid up capital of the bank, with sub-limit of 49% by FII's and 24% for NRI's.
Tech Mahindra rose 0.77%. Tech Mahindra during market hours today, 25 February 2014, announced that the company has signed a formal teaming agreement with Sierra Wireless to work collaboratively to develop and deploy end-to-end M2M solutions for customers worldwide. The collaboration leverages Sierra Wireless device-to-cloud offerings and Tech Mahindra's system integration and application development expertise to offer cost-effective, turnkey solutions tailored for prospective M2M customers in markets such as energy, transportation, industrial, and healthcare.
As part of the collaboration, Sierra Wireless will provide prospective joint customers with AirPrime embedded wireless modules or AirLink gateways and modems, along with enterprise platform and device management capability through AirVantage M2M Cloud. Tech Mahindra will provide consulting and solutions integration services.
Tech Mahindra after market hours on Monday, 24 February 2014, announced the launch of its Near Field Communication (NFC) test lab in Bangalore, India. The NFC Testing and Consulting capabilities in the lab will cater to the fast-growing needs of chipset manufacturers, OEMs, Service Providers, Acquires and Issuers from the banking industry.
Speaking on the occasion, Sirisha Voruganti, Head, Device Testing, Tech Mahindra said: "The convergence of payments schemes on the smartphones from leading banks has caused a lot of interoperability and compliance issues in the network as well. With this test lab, we are geared to help the Chipset manufacturers, OEMs and Service Providers to reduce the failure rates to NIL in the field and hasten their market growth. Our Lab focuses on troubleshooting and consulting with global clients while providing cost-effective test solution".
Petron Engineering Construction jumped 7.32% after the company said it has received an order worth approximately Rs 196 crore from JBF Petrochemicals. The company made the announcement after market hours on Monday, 24 February 2014.
Petron Engineering Construction said it has received letter of intent dated 19 February 2014 from JBF Petrochemicals, Mangalore for composite works comprising civil, structural, underground piping, buildings, mechanical piping, insulation, painting, electrical and instrumentation works for its JBF PTA OSBL project at Mangalore for an approximate contract value of Rs 196 crore, plus service tax.
JBF Petrochemicals is setting up a purified terephthalic acid (PTA) plant in Mangalore SEZ and will have 1.25 million metric tonne per annum capacity, which its claims to be amongst the largest in India. The company is aiming to commission the project by mid of 2015.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.985, compared with its close of 62.07/08 on Monday, 24 February 2014.
Government bond prices dropped for the second day in a row after Reserve Bank of India (RBI) Governor Raghuram Rajan on Sunday, 23 February 2014, warned that inflation remains the biggest threat to economic growth and that reining in price gains is RBI's top challenge. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.8963%, higher than its close of 8.885% Monday, 24 February 2014. Bond yield and bond prices move in opposite direction.
Rajan in another television interview which was broadcast on Monday, 24 February 2014, said the government and the central bank shared similar views on inflation management, while reiterating a call for the US Federal Reserve to be more sensitive to emerging economies. Rajan's comments come after Finance Minister P. Chidambaram last week chided the central bank over its focus on fighting inflation, saying the RBI needed to abide by government policy to promote economic growth. "It's not as if the government is on a different page on what we've been doing on inflation thus far. They may have different views on what they would like to see done, but there is a process, there is a conversation. I think there is fair amount of coordination at the highest level," Rajan said.
Rajan said the central bank panel report on inflation was consistent with the government's stance. "We have a committee which has suggested a target, which is also by the way, consistent with the process the finance ministry's committee has suggested, so there is no disagreement about the broader need to get a framework in place. I think in terms of how I see the process, is really that the government sets the objective, and the central bank delivers on that objective," Rajan said.
Rajan said he believes India is likely to continue with its major economic policies irrespective of the government at the Centre after the upcoming general elections. "My sense is if there is a stable coalition post election, no matter which persuasion it is, the broad policies will continue. There may be difference in details but they are all for passing the Goods and Services Tax, all for a number of actions that the current government is taking," Rajan said. The central bank is likely to continue the level of coordination and discussion with the government after the elections, Rajan said.
Rajan also reiterated his call for the Federal Reserve to take into account the impact of its withdrawal of monetary stimulus on emerging economies, despite saying he was comfortable with the current pace of tapering. "I actually welcome a measured pace of tapering. The only thing I have been calling for is that in the communication there should be some sensitivity to conditions in emerging markets. And this is not from our perspective, this is broadly emerging markets, some of whom have been in trouble in the last few months. But I am fully prepared for a tapering that continues at this measured pace," Rajan said.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
Asian stocks edged higher on Tuesday, 25 February 2014, after overnight rally in US stocks. Key benchmark indices in Taiwan, Singapore, Japan and South Korea were up 0.03% to 1.44%. In Indonesia, the Jakarta Composite index was off 0.82%.
Chinese stocks dropped amid speculation a weaker property market and falling yuan will curb corporate earnings. In mainland China, the Shanghai Composite index was off 2.04%. Hong Kong's Hang Seng index was off 0.37%. China's Industrial Bank Co. on Monday, 24 February 2014, said it will delay loans for property projects until the end of March, fueling speculation that a weaker housing market will erode demand for everything from electric appliances to cars.
Trading in US index futures indicated that the Dow drop 12 points at the opening bell on Tuesday, 25 February 2014. US stocks climbed on Monday, 24 February 2014, boosted by M&A activity, an upbeat German confidence report and bets that the S&P 500's foray into new high ground could spur further buying. The main indexes finished with solid gains, although they ended well off their session highs as buying momentum faded.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.
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