Firmness continued on the bourses in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was currently trading above the psychological 28,000 mark, having alternately moved above and below that level so far during the trading session. The Sensex hit the psychological 28,000 mark today, 1 July 2015, for the first time in almost 6 weeks. The Sensex was currently up 226.56 points or 0.82% at 28,007.39. The gains for the 50-unit CNX Nifty were higher in percentage terms than those for the Sensex as stock prices of a number of Nifty constituents which are not a part of the Sensex edged higher. Bank of Baroda, Gujarat Ambuja Cements, Idea Cellular, HCL Technologies, Power Grid Corporation, Yes Bank, Punjab National Bank, Cairn India, Tech Mahindra, ACC, UltraTech Cement, Tata Power, Bosch, BPCL, Asian Paints and Kotak Mahindra Bank edged higher. All these stocks are a constituent of the Nifty but are not a part of the Sensex. The Nifty was currently up 76.75 points or 0.92% at 8,445.25.
The broad market depicted strength. There were more than two gainers against every loser on BSE. The BSE Mid-Cap index was up 1.45%. The BSE Small-Cap index was up 1.49%. Both these indices outperformed the Sensex.
Global markets stabilized even as Greece ended up defaulting on its euro 1.55 billion loan ($1.73 billion) to the International Monetary Fund (IMF) yesterday, 30 June 2015, with creditors rejecting a last-ditch effort to buy more time.
Auto shares edged higher. Power generation stocks were in demand.
Meanwhile, Revenue secretary Shaktikanta Das was quoted as saying today, 1 July 2015, that the government will provide a roadmap for ending corporate tax exemptions in next 45 days as part of a plan to lower the corporate tax rate to 25% in four years.
Meanwhile, growth in India's manufacturing sector output eased last month as new orders rose at weaker rate, according to a monthly survey released by Markit Economics today, 1 July 2015. Separately, data released by the government after trading hours yesterday, 30 June 2015, showed that the output of Eight Core Industries increased 4.4% in May 2015 over May 2014.
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Meanwhile, global credit rating agency Moody's Investor Service said its latest quarterly publication that a sustained soft patch for India's rural economy would weigh on private consumption and non-performing assets in the agricultural sector, which is a credit negative for the sovereign and banks.
Earlier, the Sensex hit its highest level in almost six weeks and the 50-unit CNX Nifty hit its highest level in more than four weeks in afternoon trade as these two key benchmark indices extended intraday gains.
Foreign portfolio investors (FPIs) offloaded shares worth a net Rs 551.38 crore yesterday, 30 June 2015, as per the provisional data released by the stock exchanges. Domestic institutions bought shares worth a net Rs 580.59 crore yesterday, 30 June 2015, as per the provisional data released by the stock exchanges.
In overseas markets, Asian and European stocks edged higher as investors appeared to take developments in the Greek debt crisis in stride. US stocks ended a choppy trading session higher yesterday, 30 June 2015.
At 14:17 IST, the S&P BSE Sensex was up 226.56 points or 0.82% at 28,007.39. The index jumped 252.87 points at the day's high of 28,033.70 in afternoon trade, its highest level since 22 May 2015. The index gained 19.08 points at the day's low of 27,799.91 at the onset of the trading session.
The 50-unit CNX Nifty was up 76.75 points or 0.92% at 8,445.25. The index hit a high of 8,453.95 in intraday trade, its highest level since 1 June 2015. The index hit a low of 8,370.15 in intraday trade.
The BSE Mid-Cap index was up 154.75 points or 1.45% at 10,834.74. The BSE Small-Cap index was up 165.56 points or 1.49% at 11,240.91. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was quite strong. There were more than two gainers against every loser on BSE. 1,818 shares rose and 813 shares fell. A total of 114 shares were unchanged.
Tata Chemicals rose 4.24% to Rs 438.75. With reference to the news item titled, "Tatas Look to Exit Fertiliser Business for a $1b Price Tag," Tata Chemicals clarified during trading hours that in the ordinary course of business, the company routinely assesses the performance of its businesses and the relevant market conditions, including evaluating growth and restructuring opportunities. At present there are no developments that would trigger Clause 36 of the Listing Agreement. In the event that there is any development that requires disclosure under clause 36 of the Listing Agreement, the company will make the same in accordance with regulatory requirements.
Auto shares edged higher. Escorts (up 5.75%), Eicher Motors (up 3.39%), Ashok Leyland (up 2.14%), Tata Motors (up 1.71%), TVS Motor Company (up 0.96%) and Mahindra & Mahindra (up 0.88%), edged higher. Bajaj Auto (down 0.14%) and Hero MotoCorp (down 0.53%), edged lower.
Maruti Suzuki India rose 0.63% to Rs 4,048. The stock hit a high of Rs 4,087 so far during the day, which is a record high for the counter. The stock hit a low of Rs 4,022.60 so far during the day. The company's total sales rose 1.8% to 1.14 lakh units in June 2015 over June 2014. Total domestic sales rose 1.6% to 1.02 lakh units in June 2015 over June 2014. Total exports rose 2.7% to 12,130 units in June 2015 over June 2014. The company announced the monthly sales data during trading hours today, 1 July 2015.
Power generation stocks were in demand. GMR Infrastructure (up 5.42%), Jaiprakash Power Ventures (up 3.59%), Adani Power (up 2.05%), CESC (up 1.68%), JSW Energy (up 1.32%), Reliance Power (up 1.22%), Reliance Infrastructure (up 1%), Tata Power (up 0.95%), NTPC (up 0.87%) and Torrent Power (up 0.78%), edged higher.
Meanwhile, Revenue secretary Shaktikanta Das was quoted as saying today, 1 July 2015, that the government will provide a roadmap for ending corporate tax exemptions in next 45 days as part of a plan to lower the corporate tax rate to 25% in four years. Finance Minister Arun Jaitley, while presenting his annual budget in February, had announced that the government would gradually pare corporate tax by 5 percent during the next four years from 30% and roll back various tax exemptions.
Growth in India's manufacturing sector output eased last month as new orders rose at weaker rate, according to a monthly survey released by Markit Economics today, 1 July 2015. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) dropped to 51.3 in June 2015 from 52.6 in May 2015. Commenting on the Indian Manufacturing PMI survey data, Pollyanna De Lima, Economist at Markit and author of the report, said that new business expanded at a noticeably weaker pace, in part reflecting a loss of momentum in export business. Moreover, manufacturers remained in cautious spirits and employment numbers were unchanged once again. Nonetheless, broad-based increases in both production and order book volumes were maintained, with consumer, intermediate and investment goods producers all recording growth. On the price front, there was welcome news from an easing in inflation rates. Costs and charges both rose at rates that were historically muted. With price pressures being weak and growth losing steam, June's data set suggests that the Reserve Bank of India's loosening cycle is, therefore, likely to continue, Pollyanna De Lima said.
Meanwhile, data released by the government after trading hours yesterday, 30 June 2015, showed that the output of Eight Core Industries increased 4.4% in May 2015 over May 2014. The cumulative growth during April to May 2015 was 2.1% over the corresponding period in the previous year.
Meanwhile, global credit rating agency Moody's Investor Service said its latest quarterly publication that a sustained soft patch for India's rural economy would weigh on private consumption and non-performing assets in the agricultural sector, which is a credit negative for the sovereign and banks. Moody's expects India's weakened rural economy to remain subdued through the fiscal year ending March 2016 (FY 2016), particularly if the risk of below-average monsoon rainfall materializes.
Moody's said that according to the audience polls carried out during the first annual Moody's and ICRA India Credit Conference in Mumbai in May 2015, the consensus view on India's economic growth prospects is relatively optimistic, very much in keeping with Moody's own baseline scenario of headline economic expansion of 7.5% in FY 2016. This forecast represents the highest projection amongst G20 economies and provides a key pillar of support for Moody's Baa3 sovereign rating on India and positive outlook on rating. Moody's said that the polling results pointed to some disappointment amongst the audience with regard to the pace of reform under the administration of Prime Minister Narendra Modi and increasing concerns about the risk of policy stagnation. Specifically, almost half of the poll respondents identified sluggish reform momentum as the greatest risk to India's macroeconomic story.
According to the rating agency, the multi-party, federal democracy in India underpins a gradual pace of policy implementation. While many of the policies are positive for India's institutional strength, the direct impact of growth-enhancing reforms is only likely to take full effect over a multi-year horizon.
Meanwhile, the India's weather office, the India Meteorological Department (IMD), said in its daily monsoon update issued yesterday, 30 June 2015, that the Southwest Monsoon was vigorous over East Uttar Pradesh and active over Punjab, Himachal Pradesh and Jammu & Kashmir during the past 24 hours until 8:30 IST.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 16% above the Long Period Average (LPA) until 30 June 2015. Region wise, the southwest monsoon was 31% above the LPA in Northwest India, 23% above the LPA in Central India, 19% above the LPA in South Peninsula and 1% above the LPA in East & Northeast India until 30 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 higher trade today, 1 July 2015, as investors appeared to take developments in the Greek debt crisis in stride. Key indices in Germany, UK and France were up 0.53% to 0.64%. In Italy, the FTSE MIB index was currently up 0.83%. In Spain, the IBEX 35 index was currently up 0.57%.
Greece became the first developed country to default on the International Monetary Fund yesterday, 30 June 2015, as the rescue program that has sustained it for five years expired and its creditors rejected a last-ditch effort to buy more time. The Washington-based fund said in a statement issued yesterday, 30 June 2015, that the Greek government failed to transfer euro 1.55 billion ($1.73 billion) by close-of-business on Tuesday, 30 June 2015, to the IMF. This is the largest, single missed repayment in the IMF's history. The failure to pay the IMF was a dramatic, if anticipated, conclusion to a day full of unexpected twists and turns.
Mr. Gerry Rice, Director of Communications at the International Monetary Fund (IMF) said that the IMF received a request on Tuesday, 30 June 2015, from the Greek authorities for an extension of Greece's repayment obligation, which will go to the IMF's Executive Board in due course.
Greece shut down its banking system, ordering lenders to stay closed for six days from 29 June 2015 to avoid a run on the country's banks and the nation's central bank moved to impose controls to prevent money from flooding out of the country. Negotiations between Greece and its creditors collapsed after Greece's Prime Minister Alexis Tsipras on 26 June 2015 unexpectedly called for a referendum on whether to accept reform measures demanded by the country's lenders.
On 28 June 2015, the European Central Bank froze emergency loans to Greek banks at their current level of around euro 89 billion, a move that left Greek authorities with little choice but to keep the country's banks closed.
Tsipras has called a referendum on Sunday, 5 July 2015, on whether the country should accept creditors' bailout terms. Greeks will be asked to decide whether to accept reform measures demanded by the country's lenders that would ultimately unlock about euro 15.3 billion in funds. A "no" vote by Greeks could force the country out of the eurozone and push the country into what could be the darkest chapter of its six-year debt crisis.
Manufacturing activity in the UK expanded at the slowest rate in 26 months in June, fueling concerns over the outlook for second quarter growth, according to data released on Wednesday. Research group Markit said its manufacturing purchasing managers' index fell to 51.4 last month from a downwardly revised 51.9 in May. On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Italy's public budget deficit narrowed in the first quarter of the year to 5.6% of gross domestic product from 6.0% in the same period the year before, the country's national statistical agency Istat said on Wednesday. In the first-quarter, Istat said total public expenditure slipped 0.7% to 189.7 billion euros ($210.6 billion) for the period, while total revenue increased 0.3% to 167.9 billion euros.
Orders for Germany's plant and machinery industry declined further in May due to weak domestic demand and a sharp drop in orders from other eurozone countries, industry group VDMA said Wednesday. Total German plant and machinery orders in May fell 2% from the year-earlier period; domestic orders dropped 4% from May 2014 and foreign demand was flat, despite a 6% drop in orders from other eurozone countries.
Asian stocks edged higher today, 1 July 2015, as investors appear to take in stride Greece's missed loan payment to the IMF. Key equity benchmark indices Japan, Indonesia, South Korea, Singapore and Taiwan were up 0.13% to 1.14%. China's Shanghai Composite was down 5.23%. The stock market in Hong Kong was closed for holiday.
In China, HSBC China manufacturing purchasing managers' index, a gauge of nationwide manufacturing activity, rose to a final reading of 49.4 in June from 49.2 in May, HSBC Holdings PLC and research firm Markit said today, 1 July 2015.
China's official manufacturing purchasing managers index was flat at 50.2 in June compared with a month ago, the China Federation of Logistics and Purchasing, which issues the data with the National Bureau of Statistics, said in a statement. China's official nonmanufacturing purchasing managers' index rose to 53.8 in June from 53.2 in May.
South Korea's manufacturing activity contracted for a fourth consecutive month in June and fell to a three-year low, a private survey showed Wednesday. The Nikkei Purchasing Managers' Index came in at a seasonally adjusted 46.1 in June, lower than May's reading of 47.8. The latest reading was the weakest since September 2012. A reading above 50 indicates expansion in manufacturing activity, while a reading below that signals contraction.
US stocks ended a choppy trading session higher yesterday, 30 June 2015. News from Greece dominated the trading day.
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