Amid high intraday volatility, key benchmark indices edged lower after the government left passenger fares unchanged and announced rationalisation of freight rates for goods traffic in Railway Budget 2015-16 presented in Parliament by Railway Minister Suresh Prabhu today, 26 February 2015. The barometer index, the S&P BSE Sensex, and 50-unit CNX, both, hit lowest closing levels in more than two weeks. The Sensex fell below the psychological 29,000 level. The Sensex lost 261.34 points or 0.9% to settle at 28,746.65. The market breadth indicating the overall health of the market was weak.
High intraday volatility materialized for key benchmark indices as traders rolled 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 expired today, 26 February 2015.
Bharti Infratel declined in volatile trade on huge volume after promoter Bharti Airtel offloaded shares of the company in bulk deals on BSE today, 26 February 2015. Cement stocks declined on reports railway freight rates have been hiked by 2.7% on transport of cement. Coal India fell on reports railway freight rates have been hiked by 6.3% for coal transport from 1 April 2015. 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.
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 292.46 crore from the secondary equity markets yesterday, 25 February 2015, as per data released by Central Depository Services (India). Domestic institutional investors (DIIs) bought shares worth a net Rs 19.70 crore yesterday, 25 February 2015, as per provisional data released by the stock exchanges.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged higher in choppy trade 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, European stocks edged higher. Asian stocks edged higher after upbeat US housing data. In the US yesterday, the Dow Jones Industrial Average attained record closing high yesterday, 25 February 2015, after registering small gains.
The S&P BSE Sensex fell 261.34 points or 0.90% to settle at 28,746.65, its lowest closing level since 11 February 2015. The index fell 314.17 points at the day's low of 28,693.82 in late trade. 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 fell 83.40 points or 0.95% to settle at 8,683.85, its lowest closing level since 11 February 2015. The index hit a low of 8,669.45 in intraday trade. 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, 1,750 shares declined and 1,076 shares gained. A total of 105 shares were unchanged.
The BSE Mid-Cap index fell 84.83 points or 0.79% to settle at 10,616.28. The BSE Small-Cap index fell 91.06 points or 0.81% to settle at 11,163.76. The fall in both these indices was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 4852 crore, higher than Rs 4412.77 crore during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Bankex (down 0.93%), the S&P BSE Metal index (down 0.96%), the S&P BSE Healthcare index (down 1.17%), the S&P BSE Teck index (down 1.21%), the S&P BSE Capital Goods index (down 1.31%), the S&P BSE Auto index (down 1.43%) and the S&P BSE IT index (down 1.43%) underperformed the Sensex. The S&P BSE Realty index (up 0.33%), the S&P BSE Oil & Gas index (up 0.04%), the S&P BSE Power index (down 0.32%), the S&P BSE Consumer Durables index (down 0.34%) and the S&P BSE FMCG index (down 0.73%), outperformed the Sensex.
Coal India fell on reports that railway freight rates have been hiked by 6.3% for coal transport from 1 April 2015 after the government rationalized freight rates in the Railway Budget 2015-16 presented in the parliament today, 26 February 2015. The stock fell 0.7% to Rs 384.20. The stock hit a high of Rs 386.90 and a low of Rs 378.65 in intraday trade.
Steel makers were mixed. Steel Authority of India (down 3.21%), Tata Steel (down 1.62%), JSW Steel (down 0.88%), edged lower. Bhushan Steel (up 0.11%) and Jindal Steel & Power (up 0.88%), edged higher. As per reports, railway freight rates have been hiked by 0.8% for iron ore and steel from 1 April 2015.
Metal and mining stocks were mixed. Hindalco Industries (down 2.48%), Hindustan Copper (down 1.38%) and Sesa Sterlite (down 1.09%), edged lower. NMDC (up 0.92%) and Hindustan Zinc (up 1.97%), edged higher.
Fertiliser stocks were mixed. Rashtriya Chemicals and Fertilisers (down 2.64%), Fertilisers & Chemicals Travancore (down 2.61%), National Fertilizers (down 1.85%), Tata Chemicals (down 1.82%) and Gujarat State Fertilizers Company (down 1.39%), edged lower. Deepak Fertilisers & Petrochemicals Corporation (up 0.07%), Coromandel International (up 0.12%), Zuari Global (up 2.09%) and Chambal Fertilisers & Chemicals (up 2.98%), edged higher.
As per reports, railway freight rates have been hiked by 10% on urea from 1 April 2015.
Cement stocks declined on reports railway freight rates have been hiked by 2.7% on transport of cement. Dalmia Cement (Bharat) (down 3.45%), JK Lakshmi Cement (down 2.73%), Kakatiya Cement (down 2.52%), UltraTech Cement (down 2.15%), The Ramco Cement (down 1.98%), HeidelbergCement India (down 1.09%), Shree Cement (down 0.93%), India Cements (down 0.66%), Mangalam Cement (down 0.66%), Saurastra Cement (down 0.63%), ACC (down 0.58%), Ambuja Cements (down 0.54%) and J K Cement (down 0.39%), edged lower.
Grasim Industries fell 1.8%. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
Bharti Airtel rose 0.47% to Rs 349.45. Bharti Infratel fell 0.94% to Rs 367.30. The Bharti Infratel stock saw huge volume of 3.47 crore shares on BSE. The stock was highly volatile. The Bharti Infratel stock hit a high of Rs 370.90 and low of Rs 347.60. A large bulk deal of 2.73 crore shares was executed on the Bharti Infratel counter at Rs 350 per share at 13:44 IST on BSE today, 26 February 2015. Another bulk deal of 56.94 lakh shares was executed on the Bharti Infratel counter at Rs 354.95 per share at 13:45 IST on BSE today, 26 February 2015.
Bharti Airtel announced after market hours that it sold 5.50 crore shares of its subsidiary Bharti Infratel at Rs 350 each through a secondary share sale in the stock market for a total consideration of Rs 1925 crore. Post the transaction Bharti Airtel's equity holding in Bharti Infratel stands at 71.9%. Allocation was done to global tower company investors, fund managers and long only funds, including many repeat investors. Bharti Airtel said it will use proceeds primarily to reduce debt.
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 6.07%), Simplex Casting (down 4.26%), Kalindee Rail Nirman (Engineers) (down 4.05%), Container Corporation of India (down 3.47%), Texmaco Rail & Engineering (down 2.51%), NELCO (down 1.93%) and BEML (down 1.65%), edged lower. Titagarh Wagons (up 0.5%), Transformers and Rectifiers (India) (up 3.97%), Zicom Electronic Security Systems (up 5.34%) and Hind Rectifiers (up 14.71%), edged higher. Kernex Microsystems was unchanged.
While last mile connectivity projects continue to be accorded the highest priority, Indian Railways intends to fast track the sanctioned works on 7,000 kms of double/third/fourth lines and commission 1,200 km in 2015-16 at an investment of Rs 8686 crore, Railway Minister Suersh Prabhu said at the time of introducing the Railway Budget for 2015-16 in parliament. This budgetary allotment under Capital is 84% higher than 2014-15. Indian Railways also intends commissioning 800 km of gauge conversion. He further said that seventy seven projects covering 9,400 km of doubling/tripling/quadrupling works along with electrification, covering almost all states, at a cost of Rs 96182 crore will be taken up.
Power Grid Corporation of India fell 1.07%. With respect to reports titled "Power Grid May Get $ 500-m Loan from World Bank," Power Grid Corporation of India during market hours today clarified that discussions are undergoing with the Ministry of Power/Ministry of Finance and the World Bank regarding funding assistance of Transmission Systems for evacuation of power from the Solar Parks. However, formal proposal for the projects including funding assistance is yet to be submitted by the company to Ministry of Power/Ministry of Finance. For funding of its other transmission projects, Power Grid Corporation has submitted a proposal to the Ministry of Power for recommending it for consideration of Ministry of Finance for Sovereign loan assistance of $500 million from the World Bank. On approval of concerned schemes/loan approval by the company's Board of Directors, the Stock Exchanges will be duly informed, Power Grid Corporation said.
Tata Power Company fell 0.24%. Larsen & Toubro (L&T) fell 1.04%. Tata Power Company announced after market hours that its Strategic Engineering Division (Tata Power SED), in a consortium with L&T, is one of the two down-selected Development Agencies for Ministry of Defence's prestigious "MAKE" Program "Battlefield Management System (BMS)". Tata Power SED is the lead of the consortium.
BMS is a Network Centric Program being indigenously developed for the Indian Army under the MAKE category of Defence Procurement Procedure. It is the second such Program that Tata Power SED and L&T are collaborating for. In next 5-7 years, when BMS will be deployed by the Army, it will cover more than 70% of soldiers while digitizing the Tactical Battlefield and creating a secure IoT (Internet of Things) for the Army.
The down-selection of Tata Power SED - L&T consortium enables it to participate in the Prototype Development Phase of this MAKE Program followed by a Production Order, which will be decided by the MoD after successful completion of the Prototype. Tata Power SED is one of the few private companies with a track record of over four decades in Defence R&D and Production. Project BMS is of special importance as it gives an opportunity to serve a very large section of the Indian Army.
GAIL (India) rose 1.57%. The company after market hours today, 26 February 2015, said its board of directors at a meeting held today, 26 February 2015, approved payment of interim dividend of Rs 3 per equity share for the year ending 31 March 2015. The company has fixed 3 March 2015 as record date for the purpose of payment of interim dividend.
NTPC rose 4.9%. The company announced after market hours that the Unit-III of 500 MW of Vallur Thermal Power Project of NTPC Tamil Nadu Energy Co. (NTECL), a joint venture of the company, and TANGEDCO, is declared on commercial operation from the midnight of 26 February 2015. With this the total commercial capacity of Vallur Thermal Power Project has become 1,500 MW and that of NTPC Group- 43,143 MW.
NTPC after market hours yesterday, 25 February 2015, said that its board has accorded the investment approval for the Khargone Super Thermal Power Project in Madhya Pradesh at an appraised current estimated cost of Rs 9870.51 crore, subject to Environment Clearance of Ministry of Environment and Forests. Further, the board has also accorded approval to the proposal for NTPC's commitment to Government of India for setting up 10000 megawatts of renewable energy projects during the next five years, NTPC said in a statement.
Meanwhile, the Union Cabinet yesterday, 25 February 2015, gave its approval for the implementation of the scheme for setting up of 15,000 megawatt (MW) of Grid-connected Solar PV Power projects under the National Solar Mission through NTPC/ NTPC Vidyut Vyapar Nigam (NVVN) in three tranches. Under tranche-I, 3000 MW projects will be set up under mechanism of bundling with unallocated coal based thermal power and fixed levellised tariffs. Under tranche-II, 5,000 MW projects will be set up with some support from government to be decided after getting some experience while implementing tranche-I. Under tranche-III, 7,000 MW of projects will be set up without any financial support from the government.
Banks declined. Among public sector banks, Union Bank of India (down 4.63%), Central Bank of India (down 4.03%), Bank of India (down 3.16%), Allahabad Bank (down 2.63%), Andhra Bank (down 2.54%), IDBI Bank (down 2.34%), Syndicate Bank (down 2.18%), Canara Bank (down 2.07%), State Bank of India (down 2.03%), UCO Bank (down 1.62%), Dena Bank (down 1.53%), Indian Bank (down 1.09%), United Bank of India (down 0.95%), Bank of Maharashtra (down 0.88%), Punjab and Sind Bank (down 0.83%), Vijaya Bank (down 0.73%), Corporation Bank (down 0.64%) and Punjab National Bank (down 0.22%), edged lower.
Bank of Baroda fell 2.71%. The bank announced after market hours that it will raise Rs 1260 crore by issuing equity shares to Government of India on preferential basis.
Among private sector banks, Yes Bank (down 1.43%), IndusInd Bank (down 1.17%), HDFC Bank (down 1.01%), Federal Bank (down 0.89%), Kotak Mahindra Bank (down 0.3%), ICICI Bank (down 0.26%), Axis Bank (down 0.05%) and ING Vysya Bank (down 0.04%), edged lower. City Union Bank rose 1.12%.
Key indices snapped two-day winning streak today, 26 February 2015. The Sensex had risen 32.88 points or 0.11% in two trading sessions to 29,007.99 yesterday, 25 February 2015, from a recent low of 28,975.11 on Monday, 23 February 2015. The Sensex has fallen 436.30 points or 1.50% in this month so far (till 26 February 2015). The Sensex has risen 1,247.23 points or 4.54% in this calendar year so far (till 26 February 2015). From a 52-week low of 20,920.98 on 3 March 2014, the Sensex has risen 7,825.67 points or 37.41%. The Sensex is off 1,097.51 points or 3.68% from a record high of 29,844.16 hit on 30 January 2015.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.81, compared with its close of 61.985 during the previous trading session.
Brent crude oil futures edged higher in choppy trade. Brent for April settlement was up 12 cents at $61.75 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.
The government left passenger fares unchanged and announced rationalisation of freight rates for goods traffic in Railway Budget 2015-16 presented in Parliament by Railway Minister Suresh Prabhu today, 26 February 2015. 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. The thrust of the Railways will be on resource mobilization for higher investments. For the next five years, Railways has set a goal of increase in daily passenger carrying capacity from 21 million to 30 million, increase track length by 20% from 1.14 lakh km to 1.38 lakh km and increase in annual freight carrying capacity from 1 billion to 1.5 billion tonnes. The Railways has set a goal to make it financially sustainable over the next five years.
Prabhu said that the government will monetise railways assets rather than selling them to raise funds.
For FY 2016, freight traffic is pegged at an all time high incremental traffic of 85 million tonnes, anticipating a healthier growth in the core sector of economy. Railways goods earnings are projected at Rs 1.21 lakh crore for FY 2016, which includes rationalisation of rates, commodity classification and distance slabs.
Indian Railways envisages investment of Rs 8.5 lakh crore in next five years to be mobilized from multiple sources to cater to funding i.e multilateral development banks, pension funds.
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.
European stocks edged higher today, 26 February 2015. Key benchmark indices in France and Germany were up 0.19% to 0.22%. In UK, the FTSE 100 slipped 0.02%.
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.
Most Asian stocks edged higher today, 26 February 2015 after upbeat US housing data. Key benchmark indices in China, Japan, Indonesia, South Korea and Hong Kong rose 0.12% to 2.15%. Key benchmark indices in Singapore and Taiwan fell by 0.43% 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 19 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.
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