Banking and IT stocks led gains as key benchmark indices edged higher after a report that Greek Prime Minister Alexis Tsipras is ready to accept the creditors' bailout terms. A bout of volatility was witnessed in late trade as benchmark indices trimmed gains after extending intraday gains. The barometer index, the S&P BSE Sensex, trimmed gains after hitting its highest level in more than ten weeks. The 50-unit CNX Nifty trimmed gains after hitting its highest level in almost six weeks. The Sensex provisionally closed above the psychological 28,000 mark after alternately moving above and below that level in intraday trade. The Sensex hit the psychological 28,000 mark today, 1 July 2015, for the first time in almost 6 weeks.
In overseas markets, European stocks surged and trading in US index futures indicated a firm opening of US stocks later in the global day after a report that Greek Prime Minister Alexis Tsipras is ready to accept the creditors' bailout terms. 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 Sensex was provisionally up 250.41 points or 0.9% to 28031.24. 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, Yes Bank, Kotak Mahindra Bank, HCL Technologies, Power Grid Corporation of India, ACC, Idea Cellular, Tech Mahindra, Cairn India, UltraTech Cement, Punjab National Bank, Tata Power, BPCL and Asian Paints edged higher. All these stocks are a constituent of the Nifty but are not a part of the Sensex. The Nifty was provisionally up 95 points or 1.14% at 8,463.50.
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.
Power generation stocks were in demand. Shares of Kotak Mahindra Bank rose after the private sector bank announced reduction in base rate.
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.
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.
As per provisional closing, the S&P BSE Sensex was up 250.41 points or 0.9% to 28,031.24. The index jumped 318.42 points at the day's high of 28,099.25 in late trade, its highest level since 20 April 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 95 points or 1.14% at 8,463.50, as per provisional closing. The index hit a high of 8,481.60 in intraday trade, its highest level since 22 May 2015. The index hit a low of 8,370.15 in intraday trade.
The BSE Mid-Cap index was up 150.11 points or 1.41% at 10,830.10. The BSE Small-Cap index was up 154.59 points or 1.40% at 11,229.94. 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. 1,877 shares rose and 901 shares fell. A total of 104 shares were unchanged.
The total turnover on BSE amounted to Rs 3216 crore, higher than turnover of Rs 2719.86 crore registered during the previous trading session.
Kotak Mahindra Bank rose 1.86% after the bank reduced its base rate to 9.75% per annum from 9.85% per annum with effect from 2 July 2015. All categories of loans (other than the exceptions permitted by the Reserve Bank of India) will be priced with reference to the revised base rate, Kotak Mahindra Bank said. The bank made announcement during market hours today, 1 July 2015.
Mahindra & Mahindra (M&M) rose 0.62%. M&M said its total auto sector sales fell 6% to 36,134 units in June 2015 over June 2014. Total domestic sales fell 9% to 33,282 units in June 2015 over June 2014. Total exports rose 42% to 2852 units in June 2015 over June 2014. The sales figure was announced during trading hours today.
Separately, M&M said total tractor sales fell 16% to 25,090 units in June 2015 over June 2014. Total domestic sales fell 17% to 23,899 units in June 2015 over June 2014. Total exports rose 20% to 1191 units in June 2015 over June 2014.
Gillette India fell 0.29%. The company announced during trading hours today, 1 July 2015, that the company has been acting as an authorized distributor of 'Duracell' batteries pursuant to an arrangement entered into with its Affiliate Company, Procter & Gamble International Operations S.A. The Procter & Gamble Company U.S.A has decided to globally divest the business of 'Duracell'. As a result of such divestiture, Procter & Gamble International Operations SA has decided to terminate the distributor arrangement entered into with the company.
Gillette India said it has received intimation from Procter & Gamble International Operations S.A. regarding termination of the distributor agreement. The Board of Directors of Gillette India have also been informed of the same. As a result of the termination, the company will not be acting as the distributor of 'Duracell' batteries with effect from 30 November 2015.
Power generation stocks were in demand. GMR Infrastructure (up 5.14%), Jaiprakash Power Ventures (up 3.59%), Adani Power (up 2.05%), JSW Energy (up 1.22%), Reliance Power (up 1.11%), CESC (up 0.98%), Tata Power (up 0.95%), Reliance Infrastructure (up 0.59%), Torrent Power (up 0.46%) and NTPC (up 0.36%), edged higher.
IT shares edged higher. HCL Technologies (up 2.39%), Oracle Financial Services Software (up 1.74%), MindTree (up 1.69%), Persistent Systems (up 1.69%), Tech Mahindra (up 1.63%), Wipro (up 1.57%), TCS (up 1.56%), CMC (up 1.32%), Infosys (up 1.20%) and Hexaware Technologies (up 0.82%), edged higher.
MphasiS rose 0.44% to Rs 412.30 after the company announced signing of a definitive agreement to transfer a significant portion of its domestic business, subject to regulatory approvals, to Hinduja Global Solutions. The announcement was made after market hours yesterday, 30 June 2015.
Shares of Hinduja Global Solutions (HGS) rose 1.71%.
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, after a report that Greek Prime Minister Alexis Tsipras is ready to accept the creditors' bailout terms. Key indices in Germany, UK and France were up 1.48% to 2.46%. In Italy, the FTSE MIB index was currently up 2.33%. In Spain, the IBEX 35 index was currently up 1.66%.
The Greek Prime Minister has reported said in letter to the heads of the European Commission, International Monetary Fund and European Central Bank, that he is ready to accept all the bailout conditions for Greece, with only minor changes. Greece's bailout program expired on Tuesday at midnight, but Tsipras's letter could serve as basis for a new aid package in coming days, according to reports. It may be recalled that negotiations between Greece and its creditors had 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.
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.
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. 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.
Markit's final euro zone manufacturing purchasing managers' index (PMI) nudged up to a 14-month high of 52.5 last month from May's 52.2, in line with a preliminary reading published before the fears intensified. Any reading above 50 indicates growth.
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 0.42% to 1.14%. Indonesia's Jakarta Composite was down 0.13%. 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.
Trading in US index futures indicated that the Dow could rise 157 points at the opening bell today, 30 June 2015. US stocks ended a choppy trading session higher yesterday, 30 June 2015. News from Greece dominated the trading day.
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