A bout of volatility was witnessed as key benchmark recovered from lower level after trimming intraday gains in afternoon trade. The 50-unit CNX Nifty was currently trading above the psychological 8,000 mark, having alternately moved above and below that mark in intraday trade so far. Earlier, the Nifty had fallen below the psychological 8,000 mark in morning trade after moving past that mark in early trade. The barometer index, the S&P BSE Sensex, was currently up 181.15 points or 0.69% at 26,606.45. The market breadth indicating the overall health of the market was positive. In overseas markets, European and Asian stocks edged lower as Greece's talks with lenders to avert a default ended with no agreement over the weekend.
Bharat Heavy Electricals (Bhel) rose after the company announced successful commissioning all the four units of NTPC's 400 megawatts (MW) Koldam Hydro Electric Project (HEP) in Himachal Pradesh. Auto stocks were in demand. Tata Motors rose after reporting data on global wholesale volumes for May 2015. Bank stocks declined. Shares of state-run banks Punjab National Bank and Bank of India hit 52-week low
Key benchmark indices edged higher today, 15 June 2015, amid optimism above-average monsoon rain may improve the odds for further monetary policy easing. For the country as a whole, the cumulative rainfall during this year's monsoon season was 5% above the Long Period Average (LPA) until 13 June 2015. The Reserve Bank of India (RBI) cut its main benchmark lending rate viz. the repo rate by 25 basis points after a monetary policy review on 2 June 2015. The central bank at that time said that the monsoon and its impact on food costs will be key to further easing. 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.
Meanwhile, the weekly data released by the Ministry of Agriculture after trading hours on Friday, 12 June 2015, showed that the total sown area for Kharif crops as on 12 June 2015 stands at 75.10 lakh hectares, which is lower than 82.87 lakh hectares at this time last year.
On macro front, data released by the government today, 15 June 2015, showed that the annual rate of inflation based on the monthly wholesale price index (WPI) remained in negative zone in May 2015. The index of industrial production (IIP) rose at an accelerated pace of 4.1% in April 2015 over a year ago compared with the revised growth of 2.5% in March 2015. Inflation based on consumer price index (CPI) moved up slightly to 5.01% in May 2015 from 4.87% in April 2015. Both, IIP and CPI data was announced after market hours on Friday, 12 June 2015.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 670.96 crore during the previous trading session on Friday, 12 June 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 705.58 crore on Friday, 12 June 2015, as per provisional data released by the stock exchanges
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In overseas markets, European stocks dropped as Greece's talks with lenders to avert a default ended with no agreement over the weekend. Asian stocks edged lower as talks between Greece and its European creditors collapsed over the weekend. US stocks dropped during the previous trading session on Friday, 12 June 2015, on fears about possible Greek default.
At 13:18 IST, the S&P BSE Sensex was up 181.15 points or 0.69% at 26,606.45. The index jumped 189 points at the day's high of 26,614.30 in early trade, its highest level since 11 June 2015. The index fell 117.46 points at the day's low of 26,307.84 at the onset of the trading session.
The CNX Nifty was up 45.90 points or 0.57% at 8,028.80. The index hit a high of 8,034.60 in intraday trade, its highest level since 11 June 2015. The index hit a low of 7,944.85 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,378 shares rose and 1,044 shares fell. A total of 119 shares were unchanged.
The BSE Mid-Cap index was up 41.92 points or 0.41% at 10,163.86. The BSE Small-Cap index was up 69.87 points or 0.66% at 10,643.65. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 1531 crore by 13:15 IST.
Bharat Heavy Electricals (Bhel) rose 1.21%. NTPC fell 1.06%. Bhel during market hours today, 15 June 2015, said that the company has successfully commissioned all the four units of NTPC's 400 megawatts (MW) Koldam Hydro Electric Project (HEP) in Himachal Pradesh. Significantly, all the four units of the project have been commissioned by the company within a short span of just 75 days, commencing with the commissioning of the first unit on 30 March 2015, Bhel said.
Auto stocks rose on renewed buying. Maruti Suzuki India (up 0.85%), Mahindra & Mahindra (M&M) (up 1.99%), Ashok Leyland (up 0.84%), Bajaj Auto (up 0.71%), and TVS Motor Company (up 0.71%) gained. Hero MotoCorp shed 0.23%.
Tata Motors rose after reporting data on global wholesale volumes for May 2015. The stock was up 0.19%. Tata Motors' group global wholesales, including Jaguar Land Rover, rose 2.15% to Rs 79,244 units in May 2015 over May 2014. Tata Motors' global wholesales of all commercial vehicles - Tata, Tata Daewoo and the Tata Hispano Carrocera range fell 0.33% to 29,063 units in May 2015 over May 2014. Global wholesales of all passenger vehicles rose 3.64% to 50,181 units in May 2015 over May 2014. Global wholesales of Tata passenger vehicles rose 20.02% to 11,302 units in May 2015 over May 2014. The company announced the global sales data after market hours on Friday, 12 June 2015.
Global wholesales for Jaguar Land Rover (JLR) totaled 38,879 vehicles in May 2015. This includes figures of CJLR. CJLR is a joint venture between JLR and Chery Automobiles and is an unconsolidated subsidiary for JLR.
Eicher Motors rose 2.42% on reports a foreign brokerage has initiated coverage on the stock with a buy rating. The foreign brokerage reportedly said that the structural growth from Royal Enfield is likely to continue and it expects Eicher Motors to deliver sector-leading growth. The brokerage noted that the industry demand is shifting towards premium bikes and Eicher's premium valuations are likely to be sustained going ahead, as per reports.
Bank stocks declined. Among private bank stocks, HDFC Bank (down 0.37%), Kotak Mahindra Bank (down 3.29%), Axis Bank (down 0.34%), IndusInd Bank (down 1.18%) and Yes Bank (down 0.4%) declined. ICICI Bank rose 0.86%.
Among PSU bank stocks, State Bank of India (SBI) (down 1.06%), Bank of Baroda (down 2.07%), Canara Bank (down 0.63%) and Union Bank of India (down 0.14%) dropped.
Punjab National Bank fell 0.76% to Rs 131.15. The stock hit a 52-week low of Rs 130.45 in intraday trade today, 15 June 2015. The stock hit an intraday high of Rs 133.20 so far during the day.
Bank of India lost 1.47% to Rs 170.90. The stock hit a 52-week low of Rs 170.10 in intraday trade today, 15 June 2015. The stock hit an intraday high of Rs 175.35 so far during the day.
Public sector banks and private sector banks unanimously expressed at a meeting between Finance Minister Arun Jaitley with CMDs of public sector banks (PSBs), private banks and Financial Institutions (FIs) on Friday, 12 June 2015, that in a period of 2-3 months, greater transmission of lower rates by commercial banks could be seen. The CMDs of banks, both PSBs and private banks expressed that until the cost of funds/deposits for the banks, as reflected in the re-pricing of their liability book at the new rate comes down and liquidity levels at the new lower costs are tested, full transmission would not be viable, according to a statement issued by the finance ministry after trading hours on Friday, 12 June 2015. Commercial banks were responding to a query by Jaitley as to why the banking system, in response to the Reserve Bank of India's (RBI) rate cut of 75 basis points since January 2015, effected a corresponding rate cut of only 25 basis points. The Finance Minister held the Annual Review Meeting with the CEOs of banks (including private banks), insurance companies and FIs for the year ended 31 March 2015 on Friday, 12 June 2015.
Jaitley also expressed his concern over the modest growth of domestic credit of 7% over the previous year registered by PSBs and took stock of the sectoral profile of the total domestic credit flow of Rs 49.01 lakh crore during 2014-15. The Finance Minister urged the bankers to achieve the target of 20% growth in educational loan asset by the Department of Financial Services (DFS), Ministry of Finance and also attempt to even out the huge regional disparity in such loans. The Finance Minister noted the good growth at 16-18% in the housing sector and also strongly advised the PSBs to achieve a 30% growth in priority sector housing loans, which are intrinsically secure loans and which are required to provide a stimulus to overall growth.
As regards non-performing assets (NPAs), the PSBs continue to be under stress on account of their past lending. Jaitley advised that the RBI, Government Departments and the financial institutions should collectively examine solutions that work, so as to de-bottleneck those critical projects of economic value. Jaitley suggested that Secretary, Department of Financial Services (DFS) obtain a list of all major projects stalled purely due to financial reasons and attempt to sort out the sticky issues along with the concerned banks. He also suggested that DFS and RBI should interact to examine and sort out the regulatory issues in NPAs and the scope for their modification to ease the pressure on banks. The Minister of State for Finance Jayant Sinha mentioned an additional view that banks should sell off their non-core assets. Jaitley himself said he would like to sort out issues which relate to state governments and other central government ministries.
In another separate announcement, the finance ministry after trading hours on Friday, 12 June 2015, said that in order to assess capital requirement of PSBs, all PSBs have been requested to make presentations to the Department of Financial Services, Ministry of Finance. Earlier, during the Quarterly Review of Public Sector Banks' performance held on 11 March, 2015, it was discussed that the banks should work-out/find-out their own resources for raising capital and also work-out their own plan for raising capital from market, the finance ministry said.
In the global commodities market, Brent crude futures extended previous session's losses as high production offset strong refinery runs. Brent for July settlement was off 11 cent at $63.76 a barrel. The contract had fallen $1.24 or 1.9% a barrel to settle at $63.87 a barrel during the previous trading session. Near month July contract expires today, 15 June 2015. Brent for August settlement was down 27 cents at $64.37 a barrel.
The decline in global crude oil prices and deregulation of diesel price announced by the Indian government in October 2014 will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.
India's industrial production rose at an accelerated pace of 4.1% in April 2015 over a year ago compared with the revised growth of 2.5% in March 2015. The growth in industrial production for March 2015 was scaled up to 2.5% in the first revision compared with 2.1% reported provisionally. Meanwhile, the growth in January 2015 has been revised slightly upwards to 2.83% in the second and final revision compared with 2.77% at the first revision and 2.55% released provisionally.
Inflation based on consumer price index (CPI) moved up slightly to 5.01% in May 2015 from 4.87% in April 2015. An increase in inflation for transportation and communication contributed to the rise in overall CPI inflation, while food items inflation declined restructuring the increase in overall CPI inflation in May 2015. The core CPI inflation rose to 4.4% in May 2015 from 4% in April 2015 and 3.9% in March 2015.
The data on both industrial production and CPI was announced after market hours on Friday, 12 June 2015.
Meanwhile, data released by the government today, 15 June 2015, showed that the annual rate of inflation based on the monthly wholesale price index (WPI) remained in negative zone in May 2015. WPI inflation was negative 2.36% (provisional) for the month of May 2015 as compared to a reading of negative 2.65% (provisional) for April 2015. Build up inflation rate in the financial year so far was 0.91% compared to a build up rate of 0.94% in the corresponding period of the previous year.
Meanwhile, the weekly data released by the Ministry of Agriculture after trading hours on Friday, 12 June 2015, showed that the total sown area for Kharif crops as on 12 June 2015 stands at 75.10 lakh hectares, which is lower than 82.87 lakh hectares at this time last year.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update yesterday, 14 June 2015, that the southwest monsoon has further advanced into some parts of north Arabian Sea & Gujarat region, remaining parts of Maharashtra, some parts of Saurashtra and Madhya Pradesh and some more parts of Chhattisgarh, south Odisha and northwest Bay of Bengal. The IMD said that conditions are favourable for further advance of southwest monsoon into some more parts of north Arabian Sea, Gujarat state, Madhya Pradesh, Chhattisgarh and Odisha; remaining parts of Coastal Andhra Pradesh, northwest Bay of Bengal and West Bengal and some parts of Jharkhand and Bihar during next 3 days. The Southwest Monsoon has been vigorous over West Madhya Pradesh, Chhattisgarh and Telangana and active over Arunachal Pradesh, Gangetic West Bengal, Odisha, East Madhya Pradesh, Konkan & Goa, Marathawada, Vidarbha, Coastal Andhra Pradesh and Kerala during past 24 hours, the weather office said.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 5% above the Long Period Average (LPA) until 13 June 2015. Region wise, the southwest monsoon was 22% above the LPA in East & Northeast India, 10% below the LPA in Northwest India, 6% below the LPA in Central India and 4% below the LPA in South Peninsula.
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.
Meanwhile, data on the first installment of advance tax payment by corporate taxpayers may provide cues on likely Q1 June 2015 corporate earnings. Companies have to pay 15% of the full year's estimated tax liability as the first installment of the advance tax on or before 15 June every year.
The Reserve Bank of India (RBI) on Friday, 12 June 2015, issued final guidelines for introduction of 6-year and 13-year cash settled interest rate futures (IRF) on Government of India Securities with residual maturity of 4-8 years and 11-15 years respectively. The RBI also expanded the residual maturity for the existing 10-year cash settled IRF from 9-11 years to 8-11 years. This would provide market participants greater choice and flexibility to hedge their interest rate risk across different tenors, the RBI said in a press release.
In overseas markets, European stocks declined today, 15 June 2015, as Greece's talks with lenders to avert a default ended with no agreement over the weekend. Key benchmark indices in UK, France and Germany were off by 0.48% to 1.08%.
The International Monetary Fund last week halted bailout talks with Greece over a lack of progress toward a deal to avert a Greek default. Greece has a debt repayment of 1.6 billion euros ($1.8 billion) due at the end of this month to the International Monetary Fund.
Greece Finance Minister Yanis Varoufakis reportedly told a German newspaper that he would rule out a 'Grexit', or the country's exit from the euro zone, because it's not a sensible solution. Varoufakis told the newspaper that his country could reach a deal with creditors quickly if there was a restructuring and if German Chancellor Angela Merkel was part of talks. Varoufakis said that Greece doesn't want any more money as it has been given far too much already, according to reports.
Asian stocks edged lower today, 15 June 2015, after Greece's talks with lenders to avert a default ended with no agreement over the weekend. Key benchmark indices in China, Singapore, Hong Kong, Taiwan, Indonesia, Japan, and South Korea shed by 0.09% to 2%.
US stocks dropped during the previous trading session on Friday, 12 June 2015, on fears about possible Greek default.
A two-day meeting of the Federal Open Market Committee (FOMC) to review US monetary policy starts tomorrow, 16 June 2015. The FOMC meeting is being keenly watched for further indication of the timing of an expected rate hike by the US central bank later this calendar year.
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