A rangebound movement was witnessed as key benchmark indices hovered in negative zone in mid-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 55.25 points or 0.19% at 28,952.74. 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.
Shares of companies whose fortunes are linked to orders from Indian railways were mixed ahead of Railway Budget.
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.
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 11:22 IST, the S&P BSE Sensex was down 55.25 points or 0.19% at 28,952.74. The index fell 122.66 points at the day's low of 28,885.33 in morning trade, its lowest level since 24 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 15.20 points or 0.17% at 8,752.05. The index hit a low of 8,731.70 in intraday trade, its lowest level since 24 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 negative. On BSE, 1,347 shares declined and 992 shares gained. A total of 100 shares were unchanged.
The BSE Mid-Cap index was off 18.65 points or 0.17% at 10,682.46. The BSE Small-Cap index was off 11.86 points or 0.11% at 11,242.96. The fall in both these indices was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 1407 crore by 11:15 IST compared with turnover of Rs 938 crore by 10:15 IST.
Tata Motors shed 0.19%. As per reports, Jaguar Land Rover is contemplating setting up a vehicle assembly plant in North America.
DLF rose 0.27%. With respect to media reports titled DLF to sell 50% stakes in 5 projects, DLF during market hours today, 26 February 2015, clarified that there is no event, information or development which requires disclosure under Clause 36 of Listing Agreement. Meanwhile, with respect to media reports titled Showcause to DLF over IT park, DLF said that the company is in the process of seeking legal advice.
Shares of companies whose fortunes are linked to orders from Indian railways were mixed ahead of Railway Budget 2015-16. Hind Rectifiers (up 5.15%), BEML (up 1.86%), NELCO (up 2.27%), Titagarh Wagons (up 2.42%), Container Corporation of India (up 1.24%), and Zicom Electronic Security Systems (up 9.45%) gained. Stone India (down 0.29%), Texmaco Rail & Engineering (down 1.58%), Kalindee Rail Nirman (down 1.63%), and Kernex Microsystems (down 0.12%), declined.
According to media reports, the fall in diesel prices and a pick-up in freight earnings have given the Railways an opportunity to embark on rail investment splurge. The Rail Budget will mainly look at issues such as dynamic revenue earning model, freight and fare rationalisation, and capacity augmentation, reports indicated.
Castrol India fell 1.37%. Castrol India's net profit rose 4.6% to Rs 132 crore on 4% growth in total income to Rs 870.10 crore in Q4 December 2014 over Q4 December 2013. The company's net profit fell 6.70% to Rs 474.50 crore on 5.43% growth in total income to Rs 3440.40 crore in the year ended December 2014 over the year ended December 2013. The result was announced after market hours yesterday, 25 February 2015.
ABG Shipyard surged 7.17% to Rs 248.20. DB International (Asia) bought 2.90 lakh shares of ABG Shipyard at an average price of Rs 228.07 per share in a bulk deal on BSE yesterday, 25 February 2015. Further, it bought another 6.60 lakh shares at an average price of Rs 229.41 per share in a bulk deal on NSE.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.9625, 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 39 cents at $61.24 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, 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.
Asian stocks were mixed today, 26 February 2015. Key benchmark indices in Singapore, Taiwan, Indonesia and South Korea fell by 0.23% to 0.54%. Key benchmark indices in China, Japan and Hong Kong rose 0.31% to 1.13%.
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 just 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 9 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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