After an initial rally, key benchmark indices trimmed gains in morning trade. The barometer index, the S&P BSE Sensex, was currently up 163.92 points or 0.57% at 29,168.58. The market breadth indicating the overall health of the market was strong. Asian stocks edged higher, helped by better than expected Chinese factory activity data, the Federal Reserve's flexible stance on US interest rates and the eurozone's approval of reforms proposed by Greece.
Shares of PSU OMCs and oil exploration and production (E&P) companies edged higher.
Meanwhile, the finance ministry yesterday, 24 February 2015, said that the central government has accepted the recommendation of the 14th Finance Commission (FFC) to keep the States' share of Union Tax proceeds (net) at 42%.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 697.28 crore yesterday, 24 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 146.98 crore yesterday, 24 February 2015, as per provisional data.
The market may remain volatile in the near future 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 tomorrow, 26 February 2015.
In the foreign exchange market, the rupee edged higher against the dollar on global risk-on sentiment.
Brent crude oil futures edged higher, helped by better than expected Chinese factory activity data, the Federal Reserve's flexible stance on US interest rates and the eurozone's approval of reforms proposed by Greece.
In overseas markets, Asian stocks edged higher taking their cues from Wall Street's gains overnight triggered by Federal Reserve Chair Janet Yellen's testimony to the Congress which was perceived as dovish by investors. US stocks edged higher yesterday, 24 February 2015, with the S&P 500 and Dow industrials closing at records, as the market read Federal Reserve Chairwoman Janet Yellen's testimony before Congress as a reassurance that a rate hike might not occur until the second half of the year.
At 10:16 IST, the S&P BSE Sensex was up 163.92 points or 0.57% at 29,168.58. The index jumped 265.17 points at the day's high of 29,269.83 in early trade, its highest level since 23 February 2015. The index rose 110.66 points at the day's low of 29,115.32 in opening trade.
The CNX Nifty was up 53.75 points or 0.61% at 8,815.85. The index hit a high of 8,840.65 in intraday trade, its highest level since 23 February 2015. The index hit a low of 8,798 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,247 shares gained and 689 shares fell. A total of 83 shares were unchanged.
The BSE Mid-Cap index was up 44.77 points or 0.42% at 10,769.47, underperforming the Sensex. The BSE Small-Cap index was up 66.95 points or 0.59% at 11,367.06, outperforming the Sensex.
The total turnover on BSE amounted to Rs 1835 crore by 10:15 IST, compared with turnover of Rs 175 crore by 09:25 IST.
Shares of PSU OMCs edged higher. Indian Oil Corporation (up 0.41%), HPCL (up 1.91%) and BPCL (up 1.6%) rose.
Shares of oil exploration and production (E&P) companies edged higher. Cairn India (up 2%), Reliance Industries (up 1.57%) and Oil India (up 1.88%) edged higher.
Oil & Natural Gas Corporation (ONGC) advanced 2.11% to Rs 321.90. ONGC after trading hours yesterday, 24 February 2015, said that a meeting of the Board of Directors of the company will be held on 20 March 2015, inter alia, to consider payment of 2nd interim dividend, if any, for the Financial Year 2014-15.
Meanwhile, the Ministry of Petroleum & Natural Gas after trading hours yesterday, 24 February 2015, said that Mr. Shashi Shankar, Director (T&FS), ONGC has committed gross misconduct while dealing with a tender for Procurement of Twenty One Blowout Preventers (BOP) and taking strong note of the lapses the government on 23 February 2015 ordered suspension of Shankar with immediate effect to ensure fair and transparent inquiry. The Ministry of Petroleum & Natural Gas said that he has been associated with this tender as GGM and OSD to Director (T&FS) and from 1 January 2012 as Director (T&FS). Earlier, ONGC had at the fag end of the trading session yesterday, 24 February 2015, announced the suspension of Shankar by the Ministry of Petroleum & Natural Gas with immediate effect.
Shares of state-run gas transmission and distribution firm GAIL (India) were up 0.08%.
Glenmark Pharmaceuticals shed 0.12%. Glenmark Generic Inc, USA, the subsidiary of Glemark Generic today, 25 February 2015, announced the US market approval and introduction of AshlynaTM Extended-Cycle Oral Contraceptive Tablets, the generic equivalent of Seasonique from Teva Woman's Health. According to IMS Health sales data for the 12 month period ending December 2014, the Seasonique market achieved annual sales of approximately $159.1 million in the US. Glenmark Pharmaceuticals made the announcement before market hours today, 25 February 2015.
In the foreign exchange market, the rupee edged higher against the dollar on global risk-on sentiment. The partially convertible rupee was hovering at 62.07, compared with its close of 62.20 during the previous trading session.
Brent crude oil futures edged higher, helped by better than expected Chinese factory activity data, the Federal Reserve's flexible stance on US interest rates and the eurozone's approval of reforms proposed by Greece. Brent for April settlement was up 23 cents at $58.89 a barrel. The contract had declined 24 cents or 0.4% to settle at $58.66 a barrel during the previous trading session.
The finance ministry yesterday, 24 February 2015, said that the central government has accepted the recommendation of the 14th Finance Commission (FFC) to keep the States' share of Union Tax proceeds (net) at 42%. FFC has recommended by majority decision that the States' share in the net proceeds of the Union tax revenues be 42%. The recommendation of tax devolution at 42% is a huge jump from the 32% recommended by the 13th Finance Commission. The transfers to the States will see a quantum jump, the finance ministry said. This is the largest ever change in the percentage of devolution. The government tabled the 14th Finance Commission (FFC) Report in parliament yesterday, 24 February 2015. Article 280 of the Constitution of India requires the Constitution of a Finance Commission every five years, or earlier. For the period from 1 April 2015 to 31 March 2020, the 14th Finance Commission (FFC) was constituted by the orders of President on 2 January 2013 and submitted its report on 15 December 2014.
The consequence of this much greater devolution to the States is that the fiscal space for the Centre will reduce in the same proportion, the finance ministry said. The finance ministry also said that the central government has accepted the recommendations of the 14th Finance Commission with regard to grants to local bodies. FFC has recommended that out a total grant of Rs 2.87 lakh crore for five year period from 1 April 2015 to 31 March 2020. Of this, the grant recommended to Panchayatas is Rs 2 lakh crore and that to municipalities is Rs 87143.80 crore.
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.
The Railway Budget 2015-16 will be tabled in the parliament by rail minister Suresh Prabhu tomorrow, 26 February 2015. The Economic Survey will be tabled on Friday, 27 February 2015.
The next major event for the financial markets is Union Budget for 2015-16. Finance Minister Arun Jaitley will present Union Budget 2015-16 in Parliament on Saturday, 28 February 2015. 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 edged higher today, 25 February 2015, taking their cues from Wall Street's gains after Federal Reserve Chair Janet Yellen suggested the Fed would not rush into raising interest rates. Key benchmark indices in Singapore, Taiwan, Japan, Indonesia, South Korea and Hong Kong rose by 0.08% to 0.75%. China's Shanghai Composite index was unchanged.
The preliminary HSBC China Manufacturing Purchasing Managers' Index, a gauge of nationwide manufacturing activity, rose to 50.1 in February compared with a final reading of 49.7 in January, HSBC Holdings PLC said today, 25 February 2015. A reading below 50 indicates a contraction in manufacturing activity from the previous month, whereas a reading above indicates expansion. HSBC will release its final PMI data on Monday, 2 March 2015.
Trading in US index futures indicated that the Dow could fall 5 points at the opening bell today, 25 February 2015. US stocks moved higher yesterday, 24 February 2015 with the S&P 500 and Dow industrials closing at records, as the market read Federal Reserve Chairwoman Janet Yellen's testimony before Congress as a reassurance that a rate hike might not occur until the second half of the year.
Federal Reserve Chairwoman Janet Yellen yesterday, 24 February 2015 took another step closer to the first rate hike since 2006. In testimony to the Senate, Yellen signaled to financial markets the Fed would soon drop the word patient from its forward guidance. She softened the blow with several dovish comments that suggest no hurry about actually moving. Yellen signaled the outlook of inflation will be the deciding factor of when the Fed will hike rates for the first time since 2006.
In Europe, Eurozone finance ministers yesterday, 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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