Key benchmark indices languished in negative zone in morning trade. The barometer index, the S&P BSE Sensex, continued to trade below the psychological 29,000 level after falling below that level earlier during the trading session. The Sensex was currently off 61.76 points or 0.21% at 28,946.23. The market breadth indicating the overall health of the market was negative. The key event of the day is the Railway Budget 2015-16 to be presented by Railway minister Suresh Prabhu in parliament. The Railway minister's speech which will begin at 12:00 noon will be closely watched for clues on the tone and thrust of the Union Budget on Saturday, 28 February 2015.
Power generation stocks slipped. Shares of companies supplying power to Delhi declined after the Delhi state government yesterday, 25 February 2015, said that it would slash power tariff by 50% for those households which consume up to 400 units per month. Shares of power finance companies rose.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 516.06 crore yesterday, 25 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 19.70 crore yesterday, 25 February 2015, as per provisional data.
The market may remain volatile today, 26 February 2015, as traders roll over positions in the futures & options (F&O) segment from the near month February 2015 series to March 2015 series. The near month February 2015 derivatives contracts expire today, 26 February 2015.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged lower after yesterday's rally triggered weakness in dollar and comments from Saudi Arabia's oil minister Ali Al-Naimi that oil demand is growing.
In overseas markets, Asian stocks were mixed. In the US yesterday, the Dow Jones Industrial Average attained record closing high yesterday, 25 February 2015, after registering small gains.
At 10:15 IST, the S&P BSE Sensex was down 61.76 points or 0.21% at 28,946.23. The index gained 61.14 points at the day's high of 29,069.13 at onset of the day's trading session. The index fell 107.51 points at the day's low of 28,900.48 in morning trade.
The 50-unit CNX Nifty was down 22.20 points or 0.25% at 8,745.05. The index hit a high of 8,786.05 in intraday trade. The index hit a low of 8,733.85 in intraday trade, its lowest level since 24 February 2015.
The market breadth indicating the overall health of the market was negative. On BSE, 1,063 shares declined and 829 shares gained. A total of 85 shares were unchanged.
The BSE Mid-Cap index was off 24.83 points or 0.23% at 10,676.28. The fall in the index was higher than the Sensex's decline in percentage terms. The BSE Small-Cap index was off 20.62 points or 0.18% at 11,234.20. The fall in the index was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 938 crore by 10:15 IST compared with turnover of Rs 456 crore by 09:25 IST.
Power generation stocks slipped. Jaiprakash Power Ventures (down 2.09%), Adani Power (down 0.72%), Reliance Power (down 0.16%), NHPC (down 0.48%), JSW Energy (down 0.19%) edged lower. CESC rose 0.27%.
NTPC rose 0.24%. NTPC after market hours yesterday, 25 February 2015, said that its board has accorded the investment approval for the Khargone Super Thermal Power Project in Madhya Pradesh at an appraised current estimated cost of Rs 9870.51 crore, subject to Environment Clearance of Ministry of Environment and Forests. Further, the board has also accorded approval to the proposal for NTPC's commitment to Government of India for setting up 10000 megawatts of renewable energy projects during the next five years, NTPC said in a statement.
Meanwhile, the Union Cabinet yesterday, 25 February 2015, gave its approval for the implementation of the scheme for setting up of 15,000 megawatt (MW) of Grid-connected Solar PV Power projects under the National Solar Mission through NTPC/ NTPC Vidyut Vyapar Nigam (NVVN) in three tranches. Under tranche-I, 3000 MW projects will be set up under mechanism of bundling with unallocated coal based thermal power and fixed levellised tariffs. Under tranche-II, 5,000 MW projects will be set up with some support from government to be decided after getting some experience while implementing tranche-I. Under tranche-III, 7,000 MW of projects will be set up without any financial support from the government.
Shares of companies supplying power to Delhi declined after the Delhi state government yesterday, 25 February 2015, said that it would slash power tariff by 50% for those households which consume up to 400 units per month. Shares of power finance companies rose. Tata Power Company (down 0.36%) and Reliance Infrastructure (down 0.6%) slipped. The Delhi government yesterday, 25 February 2015, announced a 50% subsidy on monthly power consumption of up to 400 units and 20,000 litres of free water per month to all households that would reportedly cost the exchequer around Rs 1670 crore annually. The free water scheme and power subsidy will come into effect from 1 March 2015.
However, the rider is that if consumption of power crosses 400 units, then full charges from zero base will have to be paid, as per reports. In case of water, if the monthly consumption exceeds 20,000 litres then charges for entire supply of water will have to be paid, reports suggested.
Among power finance companies, shares of REC (up 0.72%) and Power Finance Corporation (up 1.12%) rose.
Cairn India rose 0.39%. With respect to the recent reports on Corporate Espionage referring to information leakage of classified documents from the petroleum ministry, Cairn India during market hours today, 26 February 2015, clarified that the company continues to remain focused on its commitments and business goals and its operations remain unaffected by the reported developments, Cairn India said.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.95, compared with its close of 61.985 during the previous trading session.
Brent crude oil futures edged lower after yesterday's rally triggered weakness in dollar and comments from Saudi Arabia's oil minister Ali Al-Naimi that oil demand is growing. Brent for April settlement was off 34 cents at $61.29 a barrel. The contract had jumped $2.97 a barrel or 5.06% to settle at $61.63 a barrel during the previous trading session.
Meanwhile, the stock exchanges have decided to keep the stock market open on Saturday, 28 February 2015, just like any other normal trading session when the Finance Minister Arun Jaitley presents the first full-fledged Budget of the Narendra Modi government. Trading will start at 9:15 IST and conclude at 15:30 IST. Jaitley will begin his speech at 11:00 IST in Lok Sabha on 28 February 2015 as he tables the Union Budget 2015-16 in the parliament.
Analysts will scrutinize measures in the Budget for financing infrastructure projects as well as the government's own capital expenditure on infrastructure for the year ahead. This is the first full fledged Budget of the Narendra Modi government and analysts will look for a roadmap for economic growth for the next few years.
Changes in rates of dividend distribution tax, capital gains tax on sale of shares, Securities Transaction Tax (STT) and Minimum Alternate Tax (MAT), if any, will be closely watched. The dividend distribution tax is currently at 15%. The minimum alternate tax is currently at 18.5% of book profits. Short term capital gains tax on sale of shares is currently at 15% while there is zero long capital gains tax on sale of shares held for a period of more than one year.
Analysts are awaiting further progress on the Goods and Services Tax (GST) during the ongoing Budget session of Parliament after the Constitution Amendment Bill for the introduction of GST was tabled in the Lok Sabha during the winter session of parliament. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.
Asian stocks were mixed today, 26 February 2015. Key benchmark indices in Singapore, Taiwan, Indonesia and South Korea fell by 0.11% to 0.65%. Key benchmark indices in China, Japan and Hong Kong rose 0.79% to 1.39%.
Trading in US index futures indicated that the Dow could rise 10 points at the opening bell today, 26 February 2015. US stocks saw mixed trend yesterday, 25 February 2015 as declines in Hewlett-Packard Co. and Apple Inc. offset gains among retailers amid corporate earnings.
Federal Reserve Chairwoman Janet Yellen repeated in her second day of testimony to US lawmakers yesterday, 25 February 2015 that normalization of interest rates will begin when the Federal Open Market Committee is confident that inflation is on track to hit the central bank's inflation target of 2% growth.
In economic data, new homes in the US sold at a faster pace than forecast in January despite snow storms in the Northeast in the country, a sign of stabilization in the housing industry, data released yesterday, 25 February 2015 showed.
In Europe, Greece said yesterday, 25 February 2015 it will struggle to make debt repayments to the IMF and the European Central Bank this year as Germany's finance minister voiced open doubts about Athens' trustworthiness. Eurozone finance ministers on Tuesday, 24 February 2015, backed new reforms proposed by Greece in exchange for a four-month financial lifeline that will keep the country afloat and in the single currency for the time being. Several parliaments, including Germany's, must now approve the extension before the current bailout expires on Saturday, 28 February 2015.
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