Volatility was the order of the day as key benchmark indices trimmed losses soon after extending intraday slide in mid-afternoon trade. The 50-unit CNX Nifty was currently trading below the psychological 8,000 mark, after falling below that level in early trade. The Nifty had regained the psychological 8,000 mark after registering modest gains yesterday, 15 June 2015. The barometer index, the S&P BSE Sensex, was currently off 125.60 points or 0.47% at 26,461.62. The market breadth indicating the overall health of the market was weak. In overseas markets, fears of a Greek default continued to spook European stocks today, 16 June 2015.
Metal & mining stocks declined. Shares of Vedanta and Cairn India, both, edged lower after Indian proxy advisory firm InGovern Research Services said that the proposed merger of Cairn India with Vedanta would be against the interest of Cairn India's minority shareholders. IT stocks edged lower.
Meanwhile, data released by the Ministry of Commerce & Industry today, 16 June 2015, showed that India's merchandise exports fell 20.19% at $22.35 billion in May 2015 over May 2014.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 604.86 crore yesterday, 15 June 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 650.47 crore yesterday, 15 June 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged lower as investors grew increasingly worried about a lack of progress in negotiations between Greece and its creditors. Asian stocks edged lower as financial markets braced for the possibility of Greece defaulting on its debt, while a two-day policy meeting of the US Federal Reserve's monetary committee starting later in the day also prompted caution. US stocks edged lower yesterday, 15 June 2015, after the collapse of weekend talks over Greece's bailout plan and on disappointing economic data.
At 14:18 IST, the S&P BSE Sensex was down 125.60 points or 0.47% at 26,461.62. The index fell 206.62 points at the day's low of 26,379.93 in mid-afternoon trade. The index rose 10.73 points at the day's high of 26,597.28 at the onset of the trading session.
The Nifty was down 38 points or 0.47% at 7,975.90. The index hit a low of 7,952.35 in intraday trade. The index hit a high of 8,010.50 in intraday trade.
Also Read
The market breadth indicating the overall health of the market was weak. On BSE, 1,559 shares fell and 935 shares rose. A total of 132 shares were unchanged.
The BSE Mid-Cap index was down 9.01 points or 0.09% at 10,111.79. The BSE Small-Cap index was down 26.24 points or 0.25% at 10,592.16. The decline in both these indices was lower than the Sensex's fall in percentage terms.
IT stocks declined. HCL Technologies (down 0.76%), TCS (down 0.03%), and Tech Mahindra (down 0.66%) edged lower. Infosys rose 0.84%.
Wipro declined 0.79% to Rs 536.60. The stock hit high of Rs 546 and low of Rs 536.50 so far during the day. The company after market hours yesterday, 15 June 2015, announced that it has won a contract from T-Mobile Poland to provide integrated applications and infrastructure services. Wipro has committed to T-Mobile a significant improvement of its legacy application consolidation & rationalization, transforming its operating model from application-focus to domain-focus leading to better customer service. Over the next five years, Wipro will help T-Mobile systemize and standardize the IT architecture and operations of Polish entity. A significant portion of the services will be provided from Wipro's Delivery Center in Warsaw as a part of their development strategy for Poland.
Separately, Wipro announced after market hours yesterday, 15 June 2015, that Wipro Digital, the digital business unit of Wipro, has been appointed by the Lawn Tennis Association (LTA) as its official digital technology services partner for three years. Wipro Digital will assist LTA in achieving its strategy and high performance vision to build the future of British Tennis by enabling its digital transformation. Both parties will work together to identify areas where they can collaborate.
Metal & mining stocks declined. JSW Steel (down 1.16%), Hindalco Industries (down 0.48%), Hindustan Zinc (down 0.55%), Jindal Steel & Power (down 2.5%), Tata Steel (down 1.87%), National Aluminum Company (down 0.12%) declined. Hindustan Copper (up 0.52%) and NMDC (up 1.9%) gained.
Vedanta shed 2.7% and Cairn India dropped 3.04%. Indian proxy advisory firm InGovern Research Services has red flagged the proposed merger of Cairn India with Vedanta, stating that it would be against the interest of Cairn India's minority shareholders. As a result of the merger, public shareholders of a debt-free Cairn India will become shareholders of a heavily levered Vedanta. In other words, the merger will socialize the debt of Vedanta across the minority shareholders of both Vedanta and Cairn India. However, the promoter Vedanta plc will continue to hold majority control with 50.1% stake in the combined entity.
InGovern also said that the minority shareholders of Cairn India will inherit problems of Vedanta Aluminum. Vedanta Aluminum has been battling the activists for the refinery expansion in Orissa. Amnesty International has consistently highlighted human rights abuses associated with the operations of the Lanjigarh refinery, which commenced production in 2007, InGovern said in its research report.
Vedanta and Cairn India on 14 June 2015 announced that Cairn India will be merged with Vedanta. As per the merger scheme, minority shareholders of Cairn India will receive one equity share of Vedanta for each share held in the company. The minority shareholders of Cairn India will additionally get one 7.5% redeemable preference share (RPS) of Vedanta of a face value of Rs 10 each for each share held in the company. No shares will be issued to Vedanta or any of its subsidiaries for their shareholding in Cairn India. Approximately 75.2 crore of each of equity shares and RPS will be issued to the minority shareholders of Cairn India by Vedanta pursuant to the merger. Post completion of the transaction, Vedanta plc's ownership in Vedanta is expected to decrease to 50.1% from its current 62.9% shareholding. Cairn India minority shareholders will own 20.2% and Vedanta minority shareholders will own a 29.7% stake in the enlarged entity.
Steel Authority of India (Sail) rose 0.42%. The Union Minister of Steel & Mines Narendra Singh Tomar yesterday, 15 June 2015, took stock of the yearly performance of three PSUs under the Ministry of Steel for FY 2014-15, namely Steel Authority of India (Sail), MSTC and Ferro Scrap Nigam (FSNL). While reviewing the performance of steel major Sail, Tomar expressed concern regarding the integrated operationalisation of upstream and downstream production facilities in a time-bound and synchronised manner. Asserting that capacity without production is meaningless, Tomar emphasised that pending issues in Sail's modernisation and expansion plan should be resolved at the earliest. The Minister urged Directors and CEOs of Sail to start production of finished goods from its modernised mills at the earliest. Tomar said that for profits to be higher, it is pertinent that techno-economics of production are internationally benchmarked, and the latter can't happen till the capitalisation of all of the Sail's production units are balanced. Director (Technical) Sail, SS Mohanty assured the Minister that the company will put in its best to complete commissioning at the earliest. Mohanty informed that Sail achieved record production of hot metal of 15.4 MT of hot metal, as against 14.45 MT in corresponding period last year. Apprised of the pressure put on net sales realisation (NSR) on account of depressed steel prices, the Minister advised Sail management to increase their share of value added steels, such as production of auto-grade steel. Tomar also expressed concern over the rising borrowing of the company to fund its expansion plan, and appreciated company's effort in launching a cost awareness initiative across all its plants and units.
Noting that capacity augmentation will lead to enhanced use of raw materials, Tomar directed Sail management to pay adequate attention to commensurate expansion of its mines, so that the company doesn't resort to procuring ores from outside market to feed growing production. Tomar consented to take up environmental and forest clearance issues with relevant ministries to help de-bottleneck the raw material security plan for Sail's current and future plans. Comparing Sail's performance with its peers, with respect to its decreasing sales turnover, Tomar asked the company to spruce up its competitiveness. Citing the falling market share of Sail, from 18.8% in 2009-10 to about 14% in 2014-15, Tomar advised the functional directors and CEOs to ensure better marketing of its enhanced production.
Meanwhile, data released by the Ministry of Commerce & Industry today, 16 June 2015, showed that India's merchandise exports fell 20.19% to $22.35 billion in May 2015 over May 2014. Merchandise exports registered a fall of 17.21% to $44.40 billion during the two-month period April-May 2015 over the corresponding period in the previous year.
Imports fell 16.52% to $32.75 billion in May 2015 over May 2014. Oil imports fell 40.97% to $8.54 billion in May 2015 over May 2014. Non-oil imports fell 2.24% to $24.21 billion in May 2015 over May 2014. The trade deficit declined to $10.40 billion in May 2015 from $11.23 billion in May 2014.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update issued yesterday, 15 June 2015, that the Southwest Monsoon was active over Arunachal Pradesh, Gangetic West Bengal, Odisha, Konkan & Goa, Vidarbha and Telangana during past 24 hours ending at 0830 hrs. The conditions are becoming favourable for further advance of southwest monsoon into some more parts of West Bengal and Odisha, remaining parts of Coastal Andhra Pradesh, Bay of Bengal and some parts of Jharkhand and Bihar during next 3-4 days, the IMD said.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 11% above the Long Period Average (LPA) until 14 June 2015. Region wise, the southwest monsoon was 20% above the LPA in East & Northeast India, 12% above the LPA in Central India, 1% above normal in South Peninsula and 6% below the LPA in Northwest India until 14 June 2015.
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, European stocks edged lower today, 16 June 2015, as investors grew increasingly worried about a lack of progress in negotiations between Greece and its creditors. Key benchmark indices in UK, France and Germany were off 0.51% to 1.18%.
Greek Prime Minister Alexis Tsipras yesterday, 15 June 2015, expressed defiance over demands by his country's creditors, insisting lenders soften their calls for pension cuts. That followed a collapse of talks between the two sides over the weekend. Greek Finance Minister Yanis Varoufakis reportedly said that his country has no plans of presenting a new reform proposal at a closely watched Eurogroup meeting scheduled on Thursday, 18 June 2015, insisting the lenders take Greece's suggested reforms seriously.
Last week the International Monetary Fund pulled out of talks, citing a lack of progress. 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 after the European nation bundled all its four June repayments into one.
European Central Bank President Mario Draghi yesterday, 15 June 2015, raised pressure on the Greek government to come to an agreement with its international creditors to unlock financing. While all actors will now need to go the extra mile, the ball lies squarely in the camp of the Greek government to take the necessary steps, Draghi was quoted as saying.
German consumer prices rose at their fastest rate in seven months in May, a sign that the European Central Bank's bond purchase program may be starting to have its desired effect. Consumer prices measured according to common European standards, or the HICP, increased 0.1% on the month and 0.7% on the year, the federal statistics office said today, 16 June 2015, confirming preliminary estimates. That was the largest annual increase since October 2014, when prices increased by the same rate.
Asian stocks edged lower today, 16 June 2015, as financial markets braced for the possibility of Greece defaulting on its debt, while a two-day policy meeting of the US Federal Reserve's monetary committee starting later in the day also prompted caution. Key benchmark indices in Singapore, Hong Kong, Taiwan, Japan, and South Korea shed by 0.5% to 1.1%. In Indonesia, the Jakarta Composite was up 0.83%.
China's Shanghai Composite plunged 3.47%. Mainland China share market declined for second straight day on Tuesday, 16 June 2015, after Beijing's latest ruling on margin financing and ahead of fresh wave of IPOs this week. Chinese regulators' tightened margin regulations for over-the-counter shares. China Securities Regulatory Commission said investors need to have a minimum daily balance of 500000 yuan ($80000) securities assets in the last 20 trading days to take margin loans. The securities regulator also said the size of margin finance balance at each broker may not exceed four times of their net capital.
The tightening adds stress to a market already facing liquidity pressure from a prospective wave of 25 initial public offerings this week, which is estimated to lock up 5.7 trillion yuan ($918 billion) of liquidity.
US stocks edged lower yesterday, 15 June 2015, after the collapse of weekend talks over Greece's bailout plan and on disappointing economic data. The losses followed a breakdown in talks between Greece and its creditors over the weekend. The lack of progress in negotiations has rattled investors and raised fears of a default on Greece's debt and a possible exit from the currency bloc.
Among US macroeconomic data, US industrial production unexpectedly fell in May as manufacturing and mining activity remained weak, a sign that a strong dollar and spending cuts in the energy sector continued to constrain economic growth. Industrial output slipped 0.2% last month after declining 0.5% in April, In a separate report, the New York Fed said its Empire State general business conditions index dropped to a reading of minus 1.98 in June from 3.09 in May.
A two-day meeting of the Federal Open Market Committee (FOMC) to review US monetary policy begins today, 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.
Powered by Capital Market - Live News