A broad based decline was witnessed on the domestic bourses on the first trading session of the week today, 8 June 2015, as an upbeat US jobs report raised expectations of early rate increase by the Federal Reserve. Higher US interest rates will reduce the attraction of riskier emerging-markets assets. The barometer index, the S&P BSE Sensex, hit its lowest closing level in 33 weeks. The 50-unit CNX Nifty hit its lowest closing level in almost 25 weeks. Meanwhile, global credit rating agency Moody's Investors Service reportedly said today, 8 June 2015, that below-normal rains would be credit negative for India's ratings as it would lower farm output and stoke food prices.
Key benchmark indices languished in negative zone almost throughout the trading session today, 8 June 2015. The broad market depicted weakness. There were more than two losers against every gainer on BSE. The Sensex shed 245.40 points or 0.92% to settle at 26,523.09. The BSE Mid-Cap index shed 1.54%. The BSE Small-Cap index lost 1.42%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
Index heavyweight and housing finance major HDFC dropped. FMCG shares edged lower. Metal and mining stocks declined after China's imports tumbled at a greater pace in May, stoking concerns over a slowdown in the world's second largest economy.
The Sensex dropped for the fifth straight trading session today, 8 June 2015. The Nifty dropped for the sixth straight trading session today, 8 June 2015.
In overseas markets, European stocks edged lower as investors continued to focus on Greece where the government is struggling to reach a bailout deal with international lenders. Asian stocks were mixed. The US stock market finished mostly lower during the previous trading session on Friday, 5 June 2015, as an upbeat jobs report raised expectations of early rate increase by the Federal Reserve.
Foreign portfolio investors (FPIs) sold shares worth Rs 479.13 crore into the secondary equity market during the previous trading session on Friday, 5 March 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) bought shares worth a net Rs 879.50 crore on Friday, 5 June 2015, as per provisional data released by the stock exchange.
The Sensex lost 245.40 points or 0.92% to settle at 26,523.09, its lowest closing level since 20 October 2014. The index lost 295.62 points at the day's low of 26,472.87 at the fag end of the trading session. The index rose 58.57 points at the day's high of 26,827.06 at onset of the day's trading session.
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The 50-unit CNX Nifty fell 70.55 points or 0.87% to settle at 8,044.15, its lowest closing level since 17 December 2014. The index hit a low of 8,030.55 in intraday trade. The index hit a high of 8,131 in intraday trade.
The market breadth indicating the overall health of the market was quite weak, with more than two losers against every gainer on BSE. 1,852 shares declined and 786 shares rose. A total of 128 shares were unchanged.
The BSE Mid-Cap index fell 159.93 points or 1.54% to settle at 10,194. The BSE Small-Cap index fell 153.94 points or 1.42% to settle at 10,697.56. The fall in both these indices was higher than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 1863 crore, lower than turnover of Rs 2674.87 crore registered during the previous trading session on Friday, 5 June 2015.
Among the sectoral indices on BSE, the S&P BSE Consumer Durables index (down 1.94%), the S&P BSE Metal index (down 1.73%), the S&P BSE Oil & Gas index (down 1.55%), the S&P BSE FMCG index (down 1.52%), the S&P BSE Healthcare index (down 1.17%), the S&P BSE Realty index (down 0.98%) and the S&P BSE Auto index (down 0.96%), underperformed the Sensex. The S&P BSE Power index (down 0.79%), the S&P BSE Capital Goods index (down 0.78%), the S&P BSE Bankex (down 0.74%), the S&P BSE Teck index (down 0.6%) and the S&P BSE IT index (down 0.42%), outperformed the Sensex.
Index heavyweight and housing finance major HDFC fell 1.78% to Rs 1,179.65. The stock hit high of Rs 1,202 and low of Rs 1,174.20.
Metal and mining stocks declined after China's imports tumbled at a greater pace in May, stoking concerns over a slowdown in the world's second largest economy. China is the world's largest consumer of steel, copper and aluminum. National Aluminum Company (down 3.92%), Vedanta (down 3.12%), Jindal Steel & Power (down 2.81%), Tata Steel (down 2.64%), Steel Authority of India (down 1.8%), Hindalco Industries (down 1.71%), JSW Steel (down 1.08%) and Hindustan Zinc (down 0.38%), edged lower. NMDC (up 1.04%) and Hindustan Copper (up 6.01%) edged higher.
FMCG shares edged lower. Nestle India (down 7.63%), GlaxoSmithKline Consumer Healthcare (down 4.48%), Tata Global Beverages (down 2.88%), Britannia Industries (down 2.53%), Dabur India (down 2.31%), Hindustan Unilever (down 2.16%), Bajaj Corp (down 1.95%), Marico (down 1.68%), Colgate Palmolive (India) (down 1.5%), Jyothy Laboratories (down 0.86%) and Procter & Gamble Hygiene & Health Care (down 0.48%), edged lower. Godrej Consumer Products was up 1.40%.
Sun TV Network lost 21.73% to Rs 278.90. With reference to the media reports captioned "MHA denies clearance to Sun TV channels, may go off air", Sun TV Network during market hours today, 8 June 2015, clarified that no communication has been received by the company in this regard from any ministry and all the company's channels continue to be on air. The stock price fell sharply after media reports indicated that the Ministry of Home Affairs has struck down the proposal by the Information and Broadcasting Ministry for giving security clearance to company's 33 television channels. According to reports, Sun TV Network had applied to Information and Broadcasting Ministry (I&B) Ministry for renewing its broadcasting licence for 10 years, which required security clearance from the Home Ministry.
According to reports, the home ministry rejected clearance on the ground that the continued airing of the Sun TV channels would have an adverse impact on economic security of the country. According to reports, the home ministry's rejection of the security clearance to Sun TV channels has been influenced by pending criminal cases against Kalanithi Maran and his brother and former Union minister Dayanidhi Maran. Kalanithi Maran is the promoter of Sun TV Network.
Bank stocks edged lower. Among PSU banks, Union Bank of India (down 4.43%), Canara Bank (down 4.39%), Bank of India (down 4.03%), IDBI Bank (down 3.93%), Indian Bank (down 3.6%), Punjab National Bank (down 3.42%), Bank of Baroda (down 3.41%), UCO Bank (down 2.95%), Andhra Bank (down 2.76%), Allahabad Bank (down 2.75%), Syndicate Bank (down 2.73%), United Bank of India (down 1.94%), Corporation Bank (down 1.62%), Central Bank of India (down 1.2%), State Bank of India (down 1.14%), Vijaya Bank (down 0.91%), Dena Bank (down 0.88%), Punjab and Sind Bank (down 0.58%) and Bank of Maharashtra (down 0.56%) edged lower.
Among private sector banks, IndusInd Bank (down 2.72%), City Union Bank (down 2.14%), Federal Bank (down 1.66%), HDFC Bank (down 0.91%), ICICI Bank (down 0.44%) and Kotak Mahindra Bank (down 0.22%), edged lower. Axis Bank (up 0.92%) edged higher.
Yes Bank rose 0.10% after the bank said that its shareholders approved all the 12 resolutions at its Annual General Meeting held on Saturday, 6 June 2015. The announcement was made before market hours today, 8 June 2015.
Among key resolutions, the shareholders approved re-appointment of Mr Rana Kapoor as MD & CEO of the bank for a period of 3 years. Further, the shareholders approved through special resolution to raise fresh equity aggregating to $1 billion. They have also approved the issuance of non-convertible debentures and bonds upto a total amount of Rs 10000 crore. The shareholders also approved through special resolution, the increase in the borrowing limits of the Bank to Rs 50000 crore, from the existing limits of Rs 30000 crore. The shareholders also approved the resolution for raising the combined Foreign Portfolio Investors (FPIs) and Foreign Institutional Investors (FIIs) investment limits to 74% of the paid-up capital of the bank.
The Sensex slipped for the fifth straight trading session today, 8 June 2015. The Sensex has slumped 1,325.90 points or 4.76% in the past five trading sessions from a recent high of 27,848.99 on 1 June 2015. The Sensex has lost 976.33 points or 3.55% in this calendar year so far (till 8 June 2015). From a 52-week low of 24,878.66 on 23 June 2014, the Sensex has risen 1,644.43 points or 6.61%. The Sensex is off 3,501.65 points or 11.66% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, the Ministry of Corporate Affairs today, 8 June 2015, announced that the government has issued final notifications under section 462 of the Companies Act, 2013 (Act) that provide exemptions under various provisions of the Act to private companies, government companies, Section 8 Companies and Nidhis. For private companies, the exemptions relax the provisions for entering into related party transactions; provide a shorter period for offering securities to members through right offers; provide for approving issue of employee stock option plans through a simple majority and allow an easier procedure and flexibility in holding general meetings. Private companies have also been allowed to accept deposits from members without the requirement of offer circular and creation of deposit repayment reserve etc. Flexibility has also been provided in the types of share capital that can be issued by private companies. Exemption has been given from filing of board resolutions with the registry and giving of notice for standing for directorships. Requirement of mandatory consent of shareholders with regard to certain transactions relating to sale of undertaking, investments, borrowings etc has been omitted. Further, OPCs, dormant companies, small companies and private companies having paid up share capital less than Rs 100 crore have been excluded for calculating the limit of 20 companies for audit by an auditor. Private companies not having any investment by any body corporate have been allowed to extend loans to directors etc subject to certain conditions relating to bank borrowings and default thereof. An interested director of a private company can now participate in the board meeting after declaring his interest.
Government companies have been exempted from the limits pertaining to managerial remuneration; restriction on maximum number of directorships and disqualification of directors in certain cases. The provisions in respect of Nomination and Remuneration Committee have also been relaxed in respect of their applicability to directors/managerial persons. The provisions relating to loans to directors; loans and investments by companies and related party transactions have been modified to provide flexibility to government companies in complying with such provisions. The exemption for government companies to retain the suffix "Limited" even if incorporated as private limited company has been continued as per the exemption available under Companies Act, 1956. Modifications in the provisions relating to place of holding general meetings have also been made. Provisions in respect of rotation of directors and right of persons to stand for directorship are exempted for wholly owned government companies. The provisions in respect of forming opinion about integrity, expertise/experience of independent directors have been modified to provide flexibility to the concerned Ministry/Department. For government companies engaged in producing defence equipment, the provisions of section 186 (loans and investments by companies) and Accounting Standard - 17 (Segment Reporting) shall not be applicable.
On the macro front, the Reserve Bank of India (RBI) is scheduled to announce current account deficit (CAD) data for Q4 March 2015 today, 8 June 2015. India's CAD narrowed to $8.2 billion or 1.6% GDP in Q3 December 2014 from $10.1 billion or 2% of GDP in Q2 September 2014.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update yesterday, 7 June 2015, that conditions are favourable for further advance of southwest monsoon into some more parts of central Arabian Sea & Karnataka, remaining parts of Tamilnadu, some parts of Rayalaseema and Coastal Andhra Pradesh and some more parts of central Bay of Bengal during next two days. On Friday, 5 June 2015, the IMD had announced the onset of the southwest monsoon at the Kerala coast.
Meanwhile, global credit rating agency Moody's Investors Service reportedly said today, 8 June 2015, that below-normal rains would be credit negative for India's ratings as it would lower farm output and stoke food prices. The IMD has forecast deficient rains in India during the June-September southwest monsoon season this year. The annual 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, 8 June 2015, as investors continued to focus on Greece where the government is struggling to reach a bailout deal with international lenders. Key benchmark indices in UK, France and Germany were off 0.16% to 0.79%.
Greece last week deferred a debt payment to the International Monetary Fund by bundling four payments to the fund due in June into one. The bundling option hasn't been used since the 1980s, when Zambia used it. Greek finance minister Yanis Varoufakis is due to meet his German counterpart Wolfgang Schble today, 8 June 2015, in an attempt to break the negotiation deadlock.
Germany's Industrial production, adjusted for inflation and seasonal swings, increased 0.9% in April from the previous month, data from the federal statistics office Destatis showed today, 8 June 2015.
Asian stocks were mixed today, 8 June 2015. Key benchmark indices in China, Hong Kong and Taiwan rose by 0.21% to 2.17%. Key benchmark indices in Japan, Singapore, Indonesia and South Korea fell by 0.02% to 1.68%.
China's exports fell 2.5% in May from a year earlier in dollar terms, after a drop of 6.4% in April, data from the General Administration of Customs showed today, 8 June 2015. Imports in May fell 17.6% from a year earlier, compared with a 16.2% drop in April. China's trade surplus widened in May to $59.49 billion from $34.1 billion in April.
Japan's economy grew faster than initially estimated in the first quarter, as the world's third largest economy continued its gradual recovery from last year's recession on the back of robust exports to the US and China. Gross domestic product, the broadest measure of the nation's economic activity, expanded at an annualized pace of 3.9% in January-March, according to data released today, 8 June 2015 by the Cabinet Office. The revised figure compares with a preliminary reading of 2.4% growth.
US stocks finished mostly lower on Friday, 5 June 2015 as an upbeat jobs report raised expectations for an interest-rate hike this fall.
In economic data, the Labor Department said the US economy generated 280,000 new jobs in May. The Labor Department also revised the jobs figures from March and April. March was revised up to 119,000 from 85,000, while April was revised a touch lower to 221,000 from 223,000. The unemployment rate edged up to 5.5%, but mainly because more Americans entered the labor force in search of work.
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