After seeing initial volatility, key benchmark indices alternately swung between positive and negative zone near the flat line in morning trade. The market breadth indicating the overall health of the market was strong. The barometer index, the S&P BSE Sensex, was currently up 33.70 points or 0.11% at 29,492.84. Brent crude oil prices witnessed a steep slide overnight which augurs well for India.
Bank stocks advanced after a committee set up by Reserve Bank of India (RBI) suggested a sub-target of 8% per cent of adjusted net bank credit (ANBC) for small and marginal farmers to be achieved in a phased manner while retaining the target of 18% of ANBC for agriculture credit and overall target of 40% of ANBC or Credit Equivalent of Off-Balance Sheet Exposure (CEOBE), whichever is higher, for priority sector lending. Coal India dropped on turning ex-dividend today, 3 March 2015. TVS Motor Company advanced after good sales in February 2015.
Finance Minister Arun Jaitley reportedly said in New York yesterday, 2 March 2015, that India's economy needs to reach an annual growth rate of 9% to 10% and then sustain that activity for many years in order to improve infrastructure and bring down rampant poverty, Finance Minister Arun Jaitley reportedly said yesterday, 2 March 2015.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 424.79 crore yesterday, 2 March 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 180.35 crore yesterday, 2 March 2015, as per provisional data.
In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude oil futures edged higher after previous trading session's sharp slump. Decline in global crude oil prices and deregulation of diesel price announced by the Indian government in October 2014 will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. India imports 80% of its crude oil requirement.
In overseas markets, Asian stock markets were mixed today, 3 March 2015.
At 10:16 IST, the S&P BSE Sensex was up 33.70 points or 0.11% at 29,492.84. The index gained 43.48 points at the day's high of 29,502.62 in early trade. The index slipped 94.27 points at the day's low of 29,364.87 in early trade.
The CNX Nifty was up 1.70 points or 0.02% at 8,958.45. The index hit a high of 8,966.10 in intraday trade. The index hit a low of 8,925.55 in intraday trade.
The BSE Mid-Cap index was up 87.77 points or 0.8% at 11,040.70. The BSE Small-Cap index was up 85.05 points or 0.75% at 11,455.85. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,283 shares gained and 695 shares fell. A total of 105 shares were unchanged.
Bank stocks advanced after a committee set up by Reserve Bank of India (RBI) suggested a sub-target of 8% per cent of adjusted net bank credit (ANBC) for small and marginal farmers to be achieved in a phased manner while retaining the target of 18% of ANBC for agriculture credit and overall target of 40% of ANBC or Credit Equivalent of Off-Balance Sheet Exposure (CEOBE), whichever is higher, for priority sector lending. Among PSU banks, IDBI Bank (up 2.17%), Oriental Bank of Commerce (up 1.43%), Bank of Baroda (up 1.37%), Allahabad Bank (up 0.97%), UCO Bank (up 0.63%), Canara Bank (up 0.79%), Syndicate Bank (up 0.63%), State Bank of India (up 0.71%), Punjab National Bank (up 0.54%), Union Bank of India (up 0.58%), United Bank of India (up 0.14%), Indian Overseas Bank (up 0.51%), and Andhra Bank (up 0.47%) edged higher.
Shares of private sector banks were mixed. HDFC Bank (up 0.39%), Kotak Mahindra Bank (up 0.41%), ING Vysya Bank (up 0.63%), and Federal Bank (up 0.5%) edged higher. Yes Bank (down 1.06%), ICICI Bank (down 0.67%), IndusInd Bank (down 1.37%), and Axis Bank (down 2.29%) edged lower.
An Internal Working Group set up by the Reserve Bank of India (RBI) to review the existing priority sector lending guidelines in a report released yesterday, 2 March 2015, also suggested that more flexibility should be given to banks to lend the remaining 10% of the overall 18% agriculture loan target to other farmers, agricultural infrastructure and ancillary activities as defined by the Group. To give a fillip to agri-infrastructure and agri-processing, no caps on loan limits have been stipulated.
The committee has suggested that in addition to micro and small enterprises, medium enterprises be included within the ambit of priority sector lending. To ensure that the micro enterprises are not crowded out, a sub-target of 7.5% for micro enterprises has been recommended, which is to be achieved in a phased manner. The committee has suggested that loan to sanitation, health care and drinking water facilities and renewable energy should come under the priority sector ambit. It has also suggested that incremental loans made to exports, with certain ceilings, should come under the priority sector ambit.
The committee has recommends introduction of priority sector lending certificates (PSLCs) which will enable banks to meet their priority sector lending requirements even while leveraging their comparative advantage in lending.
Coal India fell 4.23% at Rs 378 on turning ex-dividend today, 3 March 2015, for for an interim dividend of Rs 20.70 per share for the year ending 31 March 2015.
Meanwhile, with respect to media reports titled CIL Board Approves East corridor Railway Project, Coal India after market hours yesterday, 2 March 2015, clarified that at the company's board meeting held on 27 February 2015, the board considered project report on East Rail Corridor Railways Project for construction of rail line at Chhattisgarh state and accorded its approval to first year expenditure. The minutes of the meeting is under preparation and it will take some time to finalize. The company is waiting for the final minutes to disseminate the information to stock exchanges, Coal India said.
TVS Motor Company surged 6.42% at Rs 289.40. TVS Motor Company after market hours yesterday, 2 March 2015 said its total sales rose 15% to 2.04 lakh units in February 2015 over February 2014.
Hero MotoCorp rose 0.47% at Rs 2,637.20. Hero MotoCorp after market hours yesterday, 2 March 2015, reported 3.85% fall in sales to 4.84 lakh shares in February 2015 over February 2014. Hero MotoCorp is set to launch a slew of new models in the coming months, including a range of scooters, the company said.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.905, compared with its close of 61.87 during the previous trading session.
Brent crude oil futures edged higher after previous trading session's sharp slump. Brent for April settlement was up 83 cents at $60.37 a barrel. The contract had slumped $3.04 a barrel or 4.85% to settle at $59.54 a barrel during the previous trading session.
Finance Minister Arun Jaitley reportedly said in New York yesterday, 2 March 2015, that India's economy needs to reach an annual growth rate of 9% to 10% and then sustain that activity for many years in order to improve infrastructure and bring down rampant poverty, Finance Minister Arun Jaitley reportedly said yesterday, 2 March 2015. Jaitley used China as the example of what high growth rates can do over a decades-long period.
Meanwhile, data released by the government after trading hours yesterday, 2 March 2015, showed that the index of Eight Core Infrastructure Industries rose at moderate pace of 1.8% January 2015, compared with 2.4% growth recorded in December 2014. Meanwhile, the cumulative growth stood at 4.1% in April-January 2014-15.
Asian stock markets were mixed today, 3 March 2015. Key indices in China, Japan, and Taiwan were off 0.17% to 0.92%. Key indices in Hong Kong, Singapore, South Korea, and Indonesia were up 0.03% to 0.66%.
The Reserve Bank of Australia (RBA) today, 3 March 2015, left the official cash rate on hold at 2.25%. Most economists were expecting a cut.
Trading in US index futures indicated that the Dow could fall 8 points at the opening bell today, 3 March 2015. US stocks closed higher yesterday, 2 March 2015, with the Nasdaq above the psychologically key level of 5,000 for the first time since March 2000 and the Dow and S&P 500 at records as investors cheered US economic data and an interest rate cut in China.
Outlays for US construction projects declined 1.1% in January to a seasonally adjusted annual rate $971.4 billion, led by public spending, the US Commerce Department said yesterday, 2 March 2015.
In Europe, Greece is reportedly preparing to tap its final pension reserves at the country's central bank if needed to avert a devastating default to the International Monetary Fund (IMF) and keep the government going over the next two weeks.
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