Amid high intraday volatility, key benchmark indices edged lower after the government left passenger fares unchanged and announced rationalisation of freight rates for goods traffic in Railway Budget 2015-16 presented in Parliament by Railway Minister Suresh Prabhu today, 26 February 2015. The barometer index, the S&P BSE Sensex and 50-unit CNX, both, hit two-week low. The Sensex fell below the psychological 29,000 level. The Sensex was provisionally off 244.57 points or 0.84% at 28,763.42. The market breadth indicating the overall health of the market was weak.
High intraday volatility materialized for key benchmark indices as traders rolled 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 expired today, 26 February 2015.
Bharti Infratel declined in volatile trade on huge volume after promoter Bharti Airtel offloaded shares of the company in bulk deals on BSE today, 26 February 2015. Cement stocks declined on reports railway freight rates have been hiked by 2.7% on transport of cement. Coal India fell on reports railway freight rates have been hiked by 6.3% for coal transport from 1 April 2015. Shares of companies whose fortunes are linked to orders from Indian railways were mixed after Railway Minister Suresh Prabhu said in his speech in parliament at the time of presenting the Railway Budget 2015-16 that the Railways will invest Rs 8.5 lakh crore over the next 5 years.
Meanwhile, global rating agency Standard & Poor's Ratings Services today, 26 February 2015, reportedly raised its economic growth forecast for India even as the rating agency cut its economic growth forecasts for China and Japan.
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.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged higher in choppy trade 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, European stocks edged higher. Asian stocks edged higher after upbeat US housing data. In the US yesterday, the Dow Jones Industrial Average attained record closing high yesterday, 25 February 2015, after registering small gains.
As per provisional closing, the S&P BSE Sensex was down 244.57 points or 0.84% at 28,763.42. The index fell 314.17 points at the day's low of 28,693.82 in late trade, its lowest level since 12 February 2015. The index gained 61.14 points at the day's high of 29,069.13 at onset of the day's trading session.
The 50-unit CNX Nifty was down 83.40 points or 0.95% at 8,683.85. The index hit a low of 8,669.45 in intraday trade, its lowest level since 12 February 2015. The index hit a high of 8,786.05 in intraday trade.
The market breadth indicating the overall health of the market was weak. On BSE, 1,725 shares declined and 1,098 shares gained. A total of 108 shares were unchanged.
The BSE Mid-Cap index was off 84.83 points or 0.79% at 10,616.28. The BSE Small-Cap index was off 91.06 points or 0.81% at 11,163.76. The fall in both these indices was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 4852 crore, higher than turnover of Rs 4412.77 crore on yesterday, 25 February 2015.
Bharti Airtel shed 0.23%. Bharti Infratel fell 1.02% to Rs 367. The Bharti Infratel stock saw huge volume of 3.47 crore shares on BSE. The stock was highly volatile. The Bharti Infratel stock hit a high of Rs 370.90 and low of Rs 347.60. A large bulk deal of 2.73 crore shares was executed on the Bharti Infratel counter at Rs 350 per share at 13:44 IST on BSE today, 26 February 2015. Another bulk deal of 56.94 lakh shares was executed on the Bharti Infratel counter at Rs 354.95 per share at 13:45 IST on BSE today, 26 February 2015.
Cement stocks declined on reports railway freight rates have been hiked by 2.7% on transport of cement. ACC (down 0.44%), UltraTech Cement (down 2.3%), Shree Cement (down 0.93%) and Ambuja Cements (down 0.5%) declined.
Grasim Industries was off 1.94% at Rs 3,602. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
Coal India fell on reports railway freight rates have been hiked by 6.3% for coal from 1 April 2015. The stock was off 0.54%.
Shares of companies whose fortunes are linked to orders from Indian railways were mixed after Railway Minister Suresh Prabhu said in his speech in parliament at the time of presenting the Railway Budget 2015-16 that the Railways will invest Rs 8.5 lakh crore over the next 5 years. BEML (down 2.06%), Stone India (down 7.01%), NELCO (down 1.93%), Kalindee Rail Nirman (down 5.54%), Texmaco Rail & Engineering (down 3.16%), and Container Corporation of India (down 4.17%) edged lower. Titagarh Wagons (up 0.59%), Hind Rectifiers (up 17.66%) and Zicom Electronic Security Systems (up 5.23%), edged higher. Kernex Microsystems was unchanged.
Power Grid Corporation of India fell 1.33%. With respect to reports titled Power Grid May Get $ 500-m Loan from World Bank, Power Grid Corporation of India during market hours today clarified that discussions are undergoing with the Ministry of Power/Ministry of Finance and the World Bank regarding funding assistance of Transmission Systems for evacuation of power from the Solar Parks. However, formal proposal for the projects including funding assistance is yet to be submitted by the company to Ministry of Power/Ministry of Finance. For funding of its other transmission projects, Power Grid Corporation has submitted a proposal to the Ministry of Power for recommending it for consideration of Ministry of Finance for Sovereign loan assistance of $500 million from the World Bank. On approval of concerned schemes/loan approval by the company's Board of Directors, the Stock Exchanges will be duly informed, Power Grid Corporation said.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.81, compared with its close of 61.985 during the previous trading session.
Brent crude oil futures edged higher in choppy trade 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 up 4 cents at $61.67 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.
The government left passenger fares unchanged and announced rationalisation of freight rates for goods traffic in Railway Budget 2015-16 presented in Parliament by Railway Minister Suresh Prabhu today, 26 February 2015. The Railways will invest Rs 8.5 lakh crore over the next 5 years. Prabhu said that the Railways is targeting operating ratio of 88.5% for FY 2016. The operating ratio is expected at 91.8% in FY 2015. The thrust of the Railways will be on resource mobilization for higher investments. For the next five years, Railways has set a goal of increase in daily passenger carrying capacity from 21 million to 30 million, increase track length by 20% from 1.14 lakh km to 1.38 lakh km and increase in annual freight carrying capacity from 1 billion to 1.5 billion tonnes. The Railways has set a goal to make it financially sustainable over the next five years.
Prabhu said that the government will monetise railways assets rather than selling them to raise funds.
For FY 2016, freight traffic is pegged at an all time high incremental traffic of 85 million tonnes, anticipating a healthier growth in the core sector of economy. Railways goods earnings are projected at Rs 1.21 lakh crore for FY 2016, which includes rationalisation of rates, commodity classification and distance slabs.
Indian Railways envisages investment of Rs 8.5 lakh crore in next five years to be mobilized from multiple sources to cater to funding i.e multilateral development banks, pension funds.
Meanwhile, global rating agency Standard & Poor's Ratings Services today, 26 February 2015, reportedly raised its economic growth forecast for India even as the rating agency cut its economic growth forecasts for China and Japan. S&P has raised its India outlook, citing new data methodology and also rising investment and lower global crude oil prices. S&P is now calling for the Indian economy to grow 7.9% in the fiscal year ending March 2016, up from a previous forecast of 6.2%. For the year ending March 2017, it sees 8.2% growth, vs. 6.6% previously.
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.
European stocks edged higher today, 26 February 2015. Key benchmark indices in France and Germany were up 0.14% to 0.17%. In UK, the FTSE 100 slipped 0.06%.
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.
Most Asian stocks edged higher today, 26 February 2015 after upbeat US housing data. Key benchmark indices in China, Japan, Indonesia, South Korea and Hong Kong rose 0.12% to 2.15%. Key benchmark indices in Singapore and Taiwan fell by 0.43% to 0.8%.
Standard & Poor's Ratings Services today, 26 February 2015 said that it was lowering its economic growth forecasts for China and Japan, while raising the outlook for India. For China, S&P now sees 2015 gross domestic product rising 6.9%, down from a previous projection of 7.1% growth. For 2016, it cut China's GDP expansion to 6.6% from 6.7%. For Japan, it trimmed the 2015 forecast to 0.7% growth from 1.3%, while for next year, it sees 1.3% growth, down from 2.1%. The twin factors of strengthening US economy and lower oil prices have yet to lift economic data in much of Asia-Pacific, S&P said in a statement.
Singapore's industrial production swung to an expansion in January after two consecutive months of contraction. Manufacturing output rose 0.9% year-on-year in January, compared with a 1.9% decline in December, according to preliminary figures released by the Economic Development Board today, 26 February 2015. Excluding biomedical manufacturing, output was flat in January, compared with a revised 2.1% contraction in the previous month, the data showed.
Trading in US index futures indicated that the Dow could rise 24 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.
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