Key benchmark indices traded off initial highs in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 44.07 points or 0.21%, off 57.03 points from the day's high and up 7.79 points from the day's low. The market breadth, indicating the overall health of the market, was positive. Gains in Asian stocks and overnight rally in US stocks underpinned sentiment on the domestic bourses.
GAIL (India) extended intraday fall in volatile trade. Many power generation shares declined. Shares of state-run power generation major NTPC extended Monday's steep slide triggered by the Central Electricity Regulatory Commission in its latest order directing power utilities to charge production incentives based on actual offtake, instead of on their readiness to produce power at above 85% capacity utilization. Tata Power Company dropped on equity dilution worries after the company after market hours on Monday, 24 February 2014, said that a meeting of the board of directors of the company has been convened on 27 February 2014 to consider various fund raising options.
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.
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.
Asian stocks edged higher on Tuesday, 25 February 2014, after overnight rally in US stocks.
At 11:15 IST, the S&P BSE Sensex was up 44.07 points or 0.21% to 20,855.51. 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 36.28 points at the day's low of 20,847.72 in mid-morning trade.
The CNX Nifty was up 15.05 points or 0.24% to 6,201.15. 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 6,197.35 in intraday trade.
The BSE Mid-Cap index was up 31.67 points or 0.49% at 6,473.27. The BSE Small-Cap index was up 21.11 points or 0.33% at 6,436.74. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,191 shares gained and 911 shares fell. A total of 113 shares were unchanged.
The total turnover on BSE amounted to Rs 636 crore by 11:20 IST, compared with Rs 423 crore by 10:20 IST.
Among the 30-share Sensex pack, 18 stocks gained and rest of them declined.
Bhel (up 2.3%), Wipro (up 1.49%) and Bharti Airtel (up 1.48%) edged higher from the Sensex pack.
GAIL (India) extended intraday in volatile trade. The stock was off 2.03% to Rs 355.50. The scrip hit high of Rs 364 and low of Rs 355 so far during the day.
Many power generation shares declined. Reliance Infrastructure (RInfra) (down 0.38%), Adani Power (down 1.23%) and Reliance Power (down 1.25%) edged lower.
NTPC extended Monday's steep slide triggered by the Central Electricity Regulatory Commission in its latest order directing power utilities to charge production incentives based on actual offtake, instead of on their readiness to produce power at above 85% capacity utilization. The stock was off 2.01% at Rs 114.70. The stock hit 52-week low of Rs 113.95 in intraday trade. The stock had plunged 11.43% in a single trading session on Monday, 24 February 2014, to settle at Rs 117.05.
Tata Power Company dropped on equity dilution worries after the company after market hours on Monday, 24 February 2014, said that a meeting of the board of directors of the company has been convened on 27 February 2014 to consider various fund raising options. The stock was off 0.24%. The company after market hours on Monday, 24 February 2014, said that a meeting of the board of directors of the company has been convened on Thursday, 27 February 2014, to consider various fund raising options including but not limited to equity issuances by way of a rights issue, preferential issue, qualified institutions placement or any combination thereof.
Shares of Tata Power had surged 5.02% to settle at Rs 82.65 on Monday, 24 February 2014, after the company said that it has got relief from the Central Electricity Regulatory Commission (CERC) that has asked electricity procurers to pay Rs 329.45 crore as compensatory tariff for its Mundra Ultra Mega Power Project (UMPP) to partly offset escalation in the price of imported coal. CERC has asked Gujarat, Rajasthan, Punjab, Haryana and Maharashtra Electricity boards to pay this extra amount for the period 1 April 2012 to 31 March 2013. Tata Power further said that a compensatory tariff of Rs 0.524 per kWh has been granted for the project from 1 April 2013, as per CERC order. This order is in continuation of CERC's previous order of April 2013 and the high level committee's recommendations of August 2013.
Tata Power said that the management of the company finds the order balanced keeping in view the beneficiaries and consumer interests. The decision of CERC was awaited to make Mundra viable, which had got impacted due to no fault of itself, but due to change of law at Indonesia as also other coal exporting countries and an unprecedented rise in coal prices which could not have been perceived, Tata Power said. This will help in resolving a major impasse affecting imported coal based power projects in the country that got impacted due to uncontrollable extraneous factors, Tata Power said. The order provides partial relief to Mundra UMPP, which has been contributing to the nation by way of about 2-3% of the gross generation, Tata Power said in a statement issued on Monday, 24 February 2014.
NHPC shed 0.28%. NHPC announced after market hours on Monday, 24 February 2014, that an memorandum of understanding (MoU) has been signed on 22 February 2014 amongst NHPC, Bihar State Power Generation Company and Pirpainti Bijlee Company (PBCPL) for participation in PBCPL, to develop 1320 (2X660) megawatts (MW) Pirpainti Supercritical Thermal Power Project in Distt Bhagalpur of Bihar state.
Elecon Engineering Company jumped 6.98% after the company said its subsidiary, Elecon EPC Projects, secured an order worth Rs 246.78 crore from NTPC. The announcement was made after market hours on Monday, 24 February 2014.
Elecon Engineering Company said that its subsidiary company namely Elecon EPC Projects has been awarded a prestigious order from NTPC for ex-works (India) supply for coal handling plant package of Gadarwara Super Thermal Power Projects, stage - I (2x800 megawatts), aggregating worth of Rs 246.78 crore.
Hindustan Organic Chemicals was locked at 5% upper circuit at Rs 10.10 after the company said that Maharashtra Industrial Development Corporation has approached it in connection with the sale of a plot owned by the company. The company issued the clarification after market hours on Monday, 24 February 2014.
Hindustan Organic Chemicals (HOCL) in its clarification with respect to news item viz. "MIDC eyes Hind Organic Plot Near Mumbai" said that Maharashtra Industrial Development Corporation (MIDC) approached the company and presently discussions between MIDC and HOCL are in progress. However, nothing has been concluded/finalized and will be informed to the exchange once it is finalised, HOCL said.
In the foreign exchange market, the rupee edged higher against the dollar on global risk-on sentiment. The partially convertible rupee was hovering at 62, compared with its close of 62.07/08 on Monday, 24 February 2014.
Reserve Bank of India (RBI) Governor Raghuram Rajan in a 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, Hong Kong, Singapore, Japan, and South Korea were up 0.13% to 1.48%. Key benchmark indices in China and Indonesia were off 0.17% to 0.58%.
Trading in US index futures indicated that the Dow drop 8 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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