Volatility ruled the roost as key benchmark indices trimmed losses soon after extending intraday losses in afternoon trade. In his speech in parliament, Railway Minister Suresh Prabhu said at the time of presenting the Railway Budget 2015-16 that there will be no increase in passenger fares. The Railways will invest Rs 8.5 lakh crore over the next 5 years. The barometer index, the S&P BSE Sensex and 50-unit CNX the CNX Nifty, both, trimmed losses soon after hitting two-week low. The 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 147.98 points or 0.51% at 28,860.01. The market breadth indicating the overall health of the market was weak.
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. Index heavyweights ITC and Infosys edged lower. Another index heavyweight Housing finance major HDFC edged higher.
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 13:17 IST, the S&P BSE Sensex was down 147.98 points or 0.51% at 28,860.01. The index fell 211 points at the day's low of 28,796.99 in afternoon 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 31.20 points or 0.36% at 8,736.05. The index hit a low of 8,706.65 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, 1,598 shares declined and 981 shares gained. A total of 110 shares were unchanged.
The BSE Mid-Cap index was off 59.90 points or 0.56% at 10,641.21. The fall in the Mid-Cap index was higher than the Sensex's decline in percentage terms. The BSE Small-Cap index was off 55.07 points or 0.49% at 11,199.75. The fall in the Small-Cap index was lower than the Sensex's decline in percentage terms.
Index heavyweight and IT major Infosys fell 1.72% to Rs 2,278.25. The stock hit a high of Rs 2,314.90 and a low of Rs 2,275.55 so far during the trade.
Index heavyweight and cigarette major ITC fell 1.14% to Rs 395. The stock hit a high of Rs 401.30 and a low of Rs 393.90 so far during the trade.
Pharma major Sun Pharmaceutical Industries fell 2.54% to Rs 868.70. The stock hit a high of Rs 894.35 and a low of Rs 868.75 so far during the trade.
Index heavyweight and housing finance major HDFC rose 1.14% to Rs 1,356.35. The stock hit a high of Rs 1,372.40 and a low of Rs 1,336 so far during the trade.
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. Stone India (down 8.13%), Kalindee Rail Nirman (down 5.89%), Texmaco Rail & Engineering (down 4.81%), Simplex Casting (down 3.72%), Titagarh Wagons (down 3.61%) and Container Corporation of India (down 1.5%), edged lower. BEML (up 0.19%), Kernex Microsystems (up 0.75%), Texmaco Rail & Engineering (up 0.80%), NELCO (up 0.97%), Hind Rectifiers (up 3.66%) and Zicom Electronic Security Systems (up 6.28%), edged higher.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.9725, 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 5 cents at $61.58 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.
In his speech in parliament, Railway Minister Suresh Prabhu said at the time of presenting the Railway Budget 2015-16 that there will be no increase in passenger fares. 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. Prabhu said that the Railways will tap other sources for funding railway projects. Transforming Railways will require it to partner with key stakeholders, he said. The priority for the next 5 years is to improve existing line capacity. Prabhu further promised to modernise existing tracks and introduce faster trains. Construction of long loop lines will be expedited, he added. Railways will develop satellite terminals to decongest major cities.
Prabhu has said the proportion of rail revenue available for investments would rise to 11.5% in the fiscal year starting on 1 April, up from 8.2% in the current fiscal year. He further said that the government will monetise railways assets rather than selling them to raise funds.
The Railway Minister said that the Railways has set a goal to modernize rail infrastructure and make railways financially self-sustainable among others.
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 China, Japan, South Korea and Hong Kong rose 0.13% to 2.15%. Key benchmark indices in Singapore, Taiwan and Indonesia fell by 0.14% 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 12 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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