The News International Team
11:55 am HSBC PMI: Manufacturing growth slipped to a five-month low in February as the pace of order-flows slowed and companies also reduced their workforce numbers during the month, says an HSBC report.
The headline HSBC India Purchasing Managers’ Index (PMI) — a composite gauge designed to give a single-figure snapshot of manufacturing business conditions — fell from 52.9 in the previous month to a five-month low of 51.2 in February. This is the second consecutive month of fall for the Indian manufacturing sector.
The factory sector output had hit a two-year high in December 2014. A figure above 50 indicates the sector is expanding, while a figure below that level means contraction.
11:45 am Budget analysis: Hiren Ved of Alchemy Capital Management believes couple of proposals like delaying GAAR, abandoning distinction between FII and FDI investment made in the Union Budget are favourable for foreign investors. He feels there is further headroom for foreign participation and that will bring in more funds into India.
In an interview to CNBC-TV18, Ved said private banks and non-banking financial companies (NBFCs) will still lead the market. Also, companies that are related to railways, renewables and infrastructure are also likely to benefit going ahead.
“I don’t think that this Budget improves short-term earnings capabilities. In fact at the margin, your marginal rate of tax has gone up. However, investors are not looking at the very near-term. There will be still be challenges for one or two quarters in terms of earnings is concerned. However, what most people are looking at is a broad thrust of the Budget and there is now enough on the table,” he added.
11:30 am Buzzing: Shares of aviation stocks are under selling pressure as jet fuel prices are hiked by a steep 8.2 percent. The price of aviation turbine fuel (ATF) in Delhi was hiked by Rs 3,849.97 per kilolitre, or 8.2 percent, to Rs 50,363 per kl. Both Jet Airways and SpiceJet fell 5 percent intraday on Monday.
The rate hike follows seven consecutive monthly cuts since August, the last being by 11.27 per cent (Rs 5,909.9 per kl) from February 1. ATF price had been cut by Rs 23,648.73 or 33 percent in seven reductions since August 2014. Even after this hike, jet fuel rates are lowest since February 2011. Jet fuel constitutes over 40 percent of an airline’s operating costs and the price increase will raise the financial burden of cash-strapped carriers.
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The market starts the first trading day after the Budget on a firm footing. The Sensex is up 60.40 points at 29421.90, and the Nifty is up 24.80 points at 8926.65. About 1246 shares have advanced, 927 shares declined, and 185 shares are unchanged.
Axis Bank continues to gain. Credit Suisse says this Budget provide more reason to be overweight on private banks. With FII and FDI limits being merged the foreign limit for private banks will go upto 74 percent and key beneficiaries will be Axis and YES Bank as it will open up room for foreign buying and likely raise index weights.
L&T, HDFC twins, Maruti and BHEL are other top gainers in the Sensex. Among the losers are ITC, GAIL, Tata Motors, Coal India and M&M,
Gold prices rose by Rs 248 to Rs 26,939 per 10 grams in futures trade today as speculators engaged in enlarging positions amid a better trend overseas. Analysts said the rise in the gold prices at futures trade was mostly in line with a firming trend overseas where the precious metal advanced to almost two-week highs after China announced a second interest rate cut in three months and the US reported a slower pace of economic expansion than estimated.