A range bound movement was witnessed as key benchmark indices hovered in positive zone in mid-morning trade. The market breadth indicating the overall health of the market was strong. The barometer index, the S&P BSE Sensex, was currently up 161.89 points or 0.57% at 28,360.18. In overseas markets, Asian stocks edged higher after Greece's parliament today, 16 July 2015, approved austerity measures to secure a bailout for the country and potentially avoid its exit from the eurozone.
Bank stocks edged higher on renewed buying. Housing finance major HDFC rose. PSU OMCs edged higher as global crude oil prices fell overnight.
Earlier, the Sensex and the 50-unit CNX Nifty, both, hit their highest level in more than twelve weeks as these two key benchmark indices extended their initial gains in morning trade.
In overseas markets, Most Asian stocks edged higher after Greece's parliament today, 16 July 2015, approved austerity measures to secure a bailout for the country and potentially avoid its exit from the eurozone. US stocks closed slightly lower yesterday, 15 July 2015, snapping a four-session winning streak, as investors monitored developments in Greece.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 407.69 crore yesterday, 15 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 50.38 crore yesterday, 15 July 2015, as per provisional data released by the stock exchanges.
At 11:17 IST, the S&P BSE Sensex was up 161.89 points or 0.57% at 28,360.18. The index jumped 175.39 points at the day's high of 28,373.68 in morning trade, its highest level since 20 April 2015. The index rose 47.52 points at the day's low of 28,245.81 in early trade.
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The CNX Nifty was up 45.90 points or 0.54% at 8,569.70. The index hit a high of 8,575.55 in intraday trade, its highest level since 20 April 2015. The index hit a low of 8,542.90 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,390 shares gained and 879 shares fell. A total of 110 shares were unchanged.
The BSE Mid-Cap index was up 89.71 points or 0.81% at 11,141.37. The BSE Small-Cap index was up 69.16 points or 0.6% at 11,647.85. Both these indices outperformed the Sensex.
Bank stocks edged higher on renewed buying. Among public sector banks, UCO Bank (up 0.65%), Syndicate Bank (up 0.39%), Punjab National Bank (up 0.38%), Corporation Bank (up 0.1%), Allahabad Bank (up 0.78%), Bank of Baroda (up 0.13%), State Bank of India (SBI) (up 0.09%), Union Bank of India (up 0.23%), Canara Bank (up 0.52%), and Bank of India (up 0.59%) edged higher.
Among private sector banks, Axis Bank (up 2.47%), HDFC Bank (up 1.03%), ICICI Bank (up 0.65%), and Yes Bank (up 1.51%) edged higher. IndusInd Bank fell 0.13%.
Kotak Mahindra Bank rose 0.53%. The government yesterday, 15 July 2015, deferred a decision on a proposal to raise the aggregate foreign investment ceiling in Kotak Mahindra Bank to 55%. The bank had sought approval from the Foreign Investment Promotion Board (FIPB) for increasing the aggregate foreign investment ceiling in the bank to 55% pursuant to a merger of ING Vysya Bank with Kotak Mahindra Bank.
South Indian Bank slumped after reporting weak Q1 results. The stock fell 5.89%. The bank's net profit declined 48.44% to Rs 65.29 crore on 1% growth in total income to Rs 1480.51 crore in Q1 June 2015 over Q1 June 2014. The Q1 result was announced after market hours yesterday, 15 July 2015. South Indian Bank's provisions and contingencies dropped 15.97% to Rs 79.51 crore in Q1 June 2015 over Q1 June 2014.
The bank's ratio of gross non-performing assets (NPAs) to gross advances stood at 1.85% as on 30 June 2015 as against 1.71% as on 31 March 2015 and 1.5% as on 30 June 2014. The ratio of net NPA to net advances stood at 1.21% as on 30 June 2015 as against 0.96% as on 31 March 2015 and 0.91% as on 30 June 2014.
Shares of index heavyweight and housing finance major HDFC rose 1.43% to Rs 1,359.95. The stock hit high of Rs 1,360 and low of Rs 1,342 so far during the day.
PSU OMCs gained after crude oil process dropped overnight. BPCL (up 1.96%), HPCL (up 2.3%) and Indian Oil Corporation (up 3.05%) gained. Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. The government has already freed pricing of petrol and diesel.
Meanwhile, state-run oil marketing companies yesterday, 15 July 2015, announced a reduction in petrol and diesel prices. Indian Oil Corporation (IOCL) said that the company has decided to reduce the basic retail selling price of petrol by Rs 2 per litre (excluding state levies) with effect from the midnight of 15 July/16 July 2015. IOCL also announced reduction in basic retail selling price of diesel by Rs 2 per litre (excluding state levies).
In global commodities markets, Brent crude oil prices edged higher today, 16 July 2015, after weekly data showed that US crude inventories dropped last week and refinery demand was high. Brent for August settlement was currently up 37 cents at $57.42 a barrel. The contract had dropped $1.46 a barrel or 2.49% to settle at $57.05 a barrel during the previous trading session. The August Brent contract is set to expire today, 16 July 2015. Brent for September settlement was currently up 30 cents at $57.42 a barrel.
India imports about 80% of its crude requirements and a decline in crude eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 63.51, compared with its close of 63.4225 during the previous trading session.
Meanwhile, state-run oil marketing companies yesterday, 15 July 2015, announced a reduction in petrol and diesel prices. Indian Oil Corporation said that the company has decided to reduce the basic retail selling price of petrol by Rs 2 per litre (excluding state levies) with effect from the midnight of 15 July/16 July 2015. IOCL also announced reduction in basic retail selling price of diesel by Rs 2 per litre (excluding state levies).
Meanwhile, the data released by the Ministry of Commerce & Industry after trading hours yesterday, 15 July 2015, showed that India's merchandise exports fell 15.82% to $22.29 billion in June 2015 over June 2014. Imports fell 13.4% to $33.11 billion in June 2015 over June 2014. Oil imports fell 34.97% to $8.67 billion in June 2015 over June 2014. Non-oil imports fell 1.85% to $24.44 billion in June 2015 over June 2014. The trade deficit declined to $10.82 billion in June 2015 from $11.76 billion in June 2014.
Meanwhile, India's weather office, the India Meteorological Department (IMD), said in its daily monsoon update issued yesterday, 15 July 2015, that the Southwest Monsoon was vigorous over Arunachal Pradesh and Rayalaseema and was active over Assam & Meghalaya, Sub-Himalayan West Bengal & Sikkim, Bihar and Coastal Andhra Pradesh during 24 hours ending until 8:30 IST.
For the country as a whole, cumulative rainfall during this year's monsoon season was 6% below the Long Period Average (LPA) until 15 July 2015. Region wise, the southwest monsoon was 15% above the LPA in Northwest India, 6% below the LPA in East & Northeast India, 12% below the LPA in South Peninsula and 13% below the LPA in Central India until 15 July 2015.
The quantum of and the spatial distribution of rainfall this month holds key, with July being a crucial month for the sowing of Kharif crops. The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
In overseas markets, Asian stocks rose today, 16 July 2015, after Greece's parliament today, 16 July 2015, approved austerity measures to secure a bailout for the country and potentially avoid its exit from the eurozone. Key benchmark indices in China, Singapore, Japan, and South Korea rose 0.36% to 0.72%. Key benchmark indices in Hong Kong and Taiwan shed by 0.11% to 0.13%.
The Asian Development Bank (ADB) has reportedly cut its 2015 and 2016 growth forecasts for China and the rest of Asia, largely as a result of the slower than expected growth in the region's largest economy and in developed economies elsewhere. Developing Asia is now expected to grow 6.1% and 6.2% this year and in 2016 against the ADB's March forecast of 6.3% for both years, the bank said in its 2015 outlook supplement released today, 16 July 2015
US stocks closed slightly lower yesterday, 15 July 2015, snapping a four-session winning streak, as investors monitored developments in Greece. In macro data in the US, the producer-price index, which measures the prices at which companies sell goods and services, rose 0.4% in June, the Labor Department said yesterday, 15 July 2015. Core prices rose 0.3%. US industrial production rose 0.3% in June from May.
In her semiannual testimony to Congress yesterday, 15 July 2015, Federal Reserve Chairwoman Janet Yellen repeated her view that the Fed will likely hike interest rates this year if the US economy expands as expected, and cited improvement in the labor market.
In Europe, the Greek parliament today, 16 July 2015, passed a sweeping bundle of austerity measures, a prerequisite for 86 billion euros ($95 billion) in loans for the next three years from the eurozone and International Monetary Fund. The measures call for more severe spending cuts, market reforms and tax increases than those rejected by Greek voters in a referendum on 5 July 2015. Early this week, eurozone leaders agreed on a three-year bailout for the debt-laden country.
Greece's financial institutions have been on life support for weeks. Depositor withdrawals have been limited to euro 60 a day during a bank holiday that has been in place since 29 June 2015.
Meanwhile, the European Central Bank (ECB) is widely expected to keep interest rates unchanged after a monetary policy meeting today, 16 July 2015.
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