A bout of volatility was witnessed as key benchmark indices regained positive terrain after slipping into the red and hitting fresh intraday low in mid-morning trade after the Reserve Bank of India (RBI) after a policy review today, 5 August 2014, kept the policy rates and cash reserve ratio unchanged while cutting statutory liquidity ratio by 50 basis points. A private survey showing services activity easing in July also caused intraday volatility. The barometer index, the S&P BSE Sensex, was currently up 8.84 points or 0.03% at 25,732. The market breadth indicating the overall health of the market was positive.
Auto stocks rose while bank stocks fell after the Reserve Bank of India (RBI) after a policy review today, 5 August 2014, kept the policy rates and cash reserve ratio unchanged while cutting statutory liquidity ratio by 50 basis points.
At 11:20 IST, the S&P BSE Sensex was up 8.84 points or 0.03% to 25,732. The index gained 105.92 points at the day's high of 25,829.08 in early trade, its highest level since 1 August 2014. The index fell 68.32 points at the day's low of 25,654.84 in mid-morning trade.
The CNX Nifty was up 1.35 points or 0.02% to 7,685. The index hit a high of 7,714.45 in intraday trade, its highest level since 1 August 2014. The index hit a low of 7,665.30 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,223 shares rose and 1,045 shares fell. A total of 102 shares were unchanged.
The BSE Mid-Cap index was up 16.89 points or 0.18% at 9,213.70. The BSE Small-Cap index was up 31.27 points or 0.31% at 10,031.02. Both these indices outperformed the Sensex.
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Bank stocks fell after the Reserve Bank of India (RBI) after a policy review today, 5 August 2014, kept the policy rates and cash reserve ratio unchanged while cutting statutory liquidity ratio by 50 basis points. ICICI Bank (down 1.14%), HDFC Bank (down 0.21%) and State Bank of India (down 0.46%) declined.
Auto stocks gained after the Reserve Bank of India (RBI) after a policy review today, 5 August 2014, kept the policy rates unchanged. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing. Tata Motors gained 0.03%. The company after market hours on Friday, 1 August 2014 said that its total sales declined 23% to 39,623 units in July 2014 over July 2013. Domestic sales of Tata commercial and passenger vehicles dropped 25% to 35,256 units in July 2014 over July 2013.
Tata Motors' sales of commercial vehicles declined 28% to 26,089 units in July 2014 over July 2013. LCV sales fell 39% to 16,364 units in July 2014 over July 2013. M&HCV sales remained flat at 9,725 units in July 2014. Passenger vehicle sales fell 15% to 9,167 units in July 2014 over July 2013. Exports rose 2% to 4,367 units in July 2014 over July 2013.
Mahindra & Mahindra (M&M) gained 1.12%. The company after market hours on Friday, 1 August 2014, reported 6% decline in its total tractor sales to 17,407 units in July 2014 over July 2013. Domestic sales declined 8% to 16,379 units in July 2014 over July 2013. Exports surged 47% to 1,028 units in July 2014 over July 2013. Exports include CKD units.
Separately, M&M on Friday, 1 August 2014, reported 4% drop in its total auto sales at 35,567 units in July 2014 over July 2013. Sales of Passenger Vehicle segment (which includes UVs and Verito) declined 5% to 14,708 units in July 2014 over July 2013. Domestic sales dropped 4% to 33,047 units in July 2014 over July 2013. Sales of four-wheeler commercial segment declined 9% to 12,472 units in July 2014 over July 2013. Three-wheeler sales rose 15% to 5,142 units in July 2014 over July 2013. Exports dropped 3% to 2,520 units in July 2014 over July 2013.
Maruti Suzuki India gained 0.42%, with the stock extending recent gains triggered by strong sales in July. Maruti Suzuki India said during market hours during market hours on Friday, 1 August 2014, that the company's total sales jumped 21.7% to 1.01 lakh units in July 2014 over July 2013. Domestic sales rose 19.9% to 90,093 units in July 2014 over July 2013. Exports rose 38.4% to 11,287 units in July 2014 over July 2013.
Bajaj Auto rose 1.99%, with the stock extending Monday's gains triggered by announcing good July sales. The company said during market hours on Monday, 4 August 2014, that total sales rose 13% to 3.19 lakh units in July 2014 over July 2013. Commercial vehicles sales rose 49% to 51,451 units in July 2014 over July 2013. Motorcycles sales rose 9% to 2.67 lakh units in July 2014 over July 2013. Exports rose 54% to 1.69 lakh units in July 2014 over July 2013.
Meanwhile, a foreign brokerage reportedly upgraded the stock to "overweight" from "equalweight". It said all the bad news appears to be priced in the stock and demand for two-wheelers in India will accelerate to 12 and 12.3% for FY 2015 and FY 2016 as macro factors improve along with new launches.
Hero MotoCorp shed 1.22% ahead of its Q1 results today, 5 August 2014. The company said during market hours on Friday, 1 August 2014, its sales rose 9% to 5.29 lakh units in July 2014 over July 2013. The company also on 1 August 2014, extended the tenure of its Chief Financial Officer (CFO) Mr. Ravi Sud by another two years till 31 July 2016.
TVS Motor Company dropped 0.53%. The company recorded 32% growth in sales to 2.03 lakh units in July 2014 over July 2013. The sales figures were announced on Saturday, 2 August 2014.
The Reserve Bank of India (RBI) after a policy review today, 5 August 2014, kept policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8%. It also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4% of net demand and time liabilities (NDTL) and reduced the statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points from 22.5% to 22% of their NDTL with effect from the fortnight beginning 9 August 2014.
Since the second bi-monthly monetary policy statement of June 2014, global economic activity has been picking up at a modest space from a sharp slowdown in Q1. Investor risk appetite has buoyed financial markets, partly drawing strength from assurances of continuing monetary policy support in industrial countries, RBI said.
Sentiment on domestic economic activity appears to be reviving, with incoming data suggesting a firming up of industrial growth and exports. The June round of the Reserve Bank's industrial outlook survey also points to improvement in business expectations in Q2. Leading indicators of the services sector are mixed, although there are early signs of modest strengthening of corporate sales and business flows. While the initial slow progress of the monsoon and its uneven spatial distribution raised serious concerns regarding agricultural production, these have been mitigated, though not entirely dispelled, by the pick-up in the monsoon through much of the country in July. The implementation of government policy actions that have been announced should create a congenial setting for a steady improvement in domestic demand and supply conditions.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.8975, compared with its close of 60.93 on Monday, 4 August 2014.
Markit Economics said today, 5 August 2014, adjusted for seasonal factors, the HSBC Services Business Activity Index stood at 52.2 in July, down from Junes 17-month peak of 54.4. The latest reading indicated a third successive monthly expansion and was consistent with a modest rise in business activity. The headline HSBC Composite Output Index posted 53 in July, down from Junes 16-month high of 53.8. The latest figure was indicative of a solid expansion in private sector activity, and was the second highest reading since February 2013.Output growth accelerated to a 17-month peak in the manufacturing sector, while activity rose for a third consecutive month at services companies.
Asian stocks dropped today, 5 August 2014, with Shanghai shares retreating from the year's highest close as a private gauge of Chinese services industries fell to a record low. Key benchmark indices in Hong Kong, Japan, Indonesia, South Korea, China and Taiwan were down by 0.25% to 1.93%. Singapore's Straits Times rose 0.26%.
A purchasing managers' index of China's non-manufacturing sector fell to 50 in July, the borderline between expansion and contraction and the lowest reading in data from HSBC Holdings Plc and Markit Economics.
Trading in US index futures indicated that the Dow could fall 21 points at the opening bell on Tuesday, 5 August 2014. US stocks staged a late-day rally Monday, 4 August 2014, helping push the indices higher for the first time in a week on a decent earnings report from Berkshire Hathaway and the announcement of a rescue package for a struggling Portuguese bank.
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