A divergent trend was witnessed among the two key benchmark indices, with the barometer index, the S&P BSE Sensex, registering minuscule gains and the 50-unit CNX Nifty registering small losses on provisional basis. The market breadth indicating the overall health of the market was negative. The Sensex was provisionally up 12.05 points or 0.04% to 27,840.49. The Nifty was off 11.75 points or 0.14% at 8,421.90, as per provisional closing. A divergent trend was witnessed among various index constituents.
Shares of private sector banks reversed intraday gains. Shares of state-run banks came off the day's high, with some of these stocks moving into the red from green. Mahindra & Mahindra edged lower in volatile trade after reporting weak auto and tractor sales numbers for the month just gone by.
Meanwhile, data released by India's statistics office after trading hours on Friday, 29 May 2015, showed that the Indian economy grew 7.5% in Q4 March 2015, which was much higher than revised GDP growth of 6.6% in Q3 December 2014. Meanwhile, the Union Cabinet on Saturday, 30 May 2015, gave its approval to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2015.
Meanwhile, the onset of monsoon in Kerala has been delayed.
Foreign portfolio investors bought shares worth a net Rs 2284.30 crore during the previous trading session on Friday, 29 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 2267.88 crore on Friday, 29 May 2015, as per provisional data released by the stock exchanges.
Earlier, the Sensex and the Nifty, both, hit their highest levels in more than a week in mid-morning trade as these two key benchmark indices extended intraday gains.
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In overseas markets, European stocks reversed intraday gains as investors closely monitored Greece's bailout negotiations ahead of a key debt repayment later this week. Earlier during the global day, stocks in Shanghai surged after China's official purchasing managers index showed modest gains in May 2015. US stocks edged lower during the previous trading session on Friday, 29 May 2015, after a string of weak economic reports.
As per provisional closing, the S&P BSE Sensex was up 12.05 points or 0.04% to 27,840.49. The index jumped 130.99 points at the day's high of 27,959.43 in mid-morning trade, its highest level since 22 May 2015. The index fell 90.86 points at the day's low of 27,737.58 at the onset of trading session.
The Nifty was down 11.75 points or 0.14% at 8,421.90, as per provisional closing. The index hit a high of 8,467.15 in intraday trade, its highest level since 22 May 2015. The index hit a low of 8,405.40 in intraday trade.
The BSE Mid-Cap index was down 3.66 points or 0.03% at 10,712.43. The BSE Small-Cap index was down 0.79 points or 0.01% at 11,279.78. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,516 shares fell and 1,219 shares rose. A total of 119 shares were unchanged.
The total turnover on BSE amounted to Rs 2690 crore, lower than turnover of Rs 3747.51 crore registered during the previous trading session.
Mahindra & Mahindra edged lower in volatile trade after reporting weak auto and tractor sales numbers for the month just gone by. The stock fell 0.12% to Rs 1,258.65. The company's total automobile sales fell 3.07% to 36,706 units in May 2015 over May 2014. Total exports rose 41% to 3,337 units in May 2015 over May 2014. Total domestic sales fell 6% to 33,369 units in May 2015 over May 2014.
The company's total tractor sales fell 20% to 19,257 units in May 2015 over May 2014. Total exports rose 25% to 1,012 units in May 2015 over May 2014. Total domestic sales fell 21% to 18,245 units in May 2015 over May 2014.
M&M announced both auto and tractor sales data during trading hours today, 1 June 2015.
Shares of private sector banks reversed intraday gains. HDFC Bank (down 1.44%), Axis Bank (down 1.2%), Kotak Mahindra Bank (down 0.38%), Yes Bank (down 0.36%) and ICICI Bank (down 0.16%) edged lower. City Union Bank (up 0.10%), Federal Bank (up 0.14%) and IndusInd Bank (up 0.92%), edged higher.
Shares of state-run banks came off the day's high, with some of these stocks moving into the red from green. Central Bank of India (down 0.66%), IDBI Bank (down 0.56%), Vijaya Bank (down 0.54%), UCO Bank (down 0.47%), Andhra Bank (down 0.44%), Bank of India (down 0.33%), Bank of Maharashtra (down 0.26%), Canara Bank (down 0.25%), Allahabad Bank (down 0.23%), Dena Bank (down 0.1%) and State Bank of India (down 0.05%), edged lower. Syndicate Bank (up 0.04%), Punjab National Bank (up 0.23%), Corporation Bank (up 0.26%), Indian Bank (up 0.70%), Union Bank of India (up 0.89%), Punjab and Sind Bank (up 0.98%), Bank of Baroda (up 1.66%) and United Bank of India (up 1.81%) edged higher.
In global commodity markets, Brent crude oil futures edged lower after China's official purchasing managers index showed modest gains in May 2015, damping the demand outlook for one of the world's largest consumers. Brent for July settlement was off 65 cents at $64.91 a barrel. The contract had risen by $2.98 a barrel or 4.76% to settle at $65.56 a barrel during the previous trading session on Friday, 29 May 2015.
Oil cartel OPEC is expected to keep its production target of 30 million barrels of oil per day unchanged at a meeting scheduled in Vienna on Friday, 5 June 2015. The OPEC meeting is being closely watched for clues about the organization's next moves.
Meanwhile, the outcome of a survey showed that the upturn in the Indian manufacturing sector gathered pace in May 2015, with levels of production and new orders rising at the fastest rates since January 2015. The seasonally adjusted HSBC India Purchasing Managers' Index hit a four-month high of 52.6 in May 2015, from 51.3 in April 2015, Markit Economics said today, 1 June 2015. The sharpest rise was reported by consumer goods producers. Solid increases were also seen in capital and intermediate goods production. Underpinning higher output was improved demand from the domestic and foreign markets. Meanwhile, a further increase in input costs was seen and, consequently, charges were raised following a decline seen in the preceding month.
The outlook for the manufacturing sector is, however, clouded by a stagnant jobs market as firms remain uncertain about the sustainability of the upturn, said Pollyanna De Lima, Economist at Markit Economics. Over 99% of panellists reported unchanged staffing levels in May 2015, citing uncertainty about the sustainability of growth, Markit Economics said.
Meanwhile, data released by India's statistics office after trading hours on Friday, 29 May 2015, showed that the Indian economy grew 7.5% in Q4 March 2015, which was much higher than revised GDP growth of 6.6% in Q3 December 2014. The GDP growth for Q3 December 2014 was revised downwards to 6.6% compared with 7.5% growth reported earlier. The Indian economy expanded by 7.3% (provisionally) in the year ended 31 March 2015, higher than expansion of 6.9% in the year ended 31 March 2014.
Meanwhile, the Union Cabinet on Saturday, 30 May 2015, gave its approval to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2015. Changes in the provisions of the 2013 land acquisition Act will facilitate farmers to get better compensation and rehabilitation and resettlement benefits in lieu of land compulsorily acquired by the appropriate Government, according to a government statement. The government first issued the Ordinance in December which was re-promulgated in April. It was observed that some provisions of the 2013 land acquisition Act were making the implementation of the Act difficult and this made it necessary to bring changes in the Act, while safeguarding the interest of farmers and affected families in cases of land acquisition, according to the government statement. In addition, procedural difficulties in the acquisition of lands required for important national projects required to be mitigated. In order to remove them, certain amendments were made in the Act while further strengthening the provisions to protect the interests of the 'affected families'. In view of the urgency, these were brought about by an Ordinance on 31 December 2014. Subsequently, on 10 March 2015, the Lok Sabha passed the Amendment Bill to replace the Ordinance. The Amendment Bill passed by the Lok Sabha includes some further changes to the Ordinance. However, the Bill could not be taken up for consideration in the Rajya Sabha as the Rajya Sabha was adjourned on 20 March 2015.
Meanwhile, in a major push to private sector participation in defence manufacturing, the government has withdrawn excise and customs duty exemptions presently available to goods manufactured and supplied to the Ministry of Defence by Ordinance Factory Board and defence public sector undertakings (PSUs) through a notification issued on 30 April 2015. This will provide a level playing field to domestic private players bidding for the government contracts by taking away the strategic advantage with PSUs for quoting lower rates in open bids, the Ministry of Commerce & Industry said in a statement issued today, 1 June 2015. With this initiative, the government has also fulfilled demand of foreign Original Equipment Manufacturers (OEMs) such as Boeing, Airbus, Lockheed Martin, BAE Systems etc. who are actively exploring the scope of future investments in India, the Ministry of Commerce & Industry said.
Meanwhile, economists expect the Reserve Bank of India (RBI) to cut its benchmark lending rate viz. the repo rate by 25 basis points to 7.25% after a monetary policy review tomorrow, 2 June 2015. Economists expect rate cut from the central bank in an attempt to aid economic recovery in India. The RBI is scheduled to announce the outcome of its second bi-monthly monetary policy review for the year 2015-16 at 11:00 IST tomorrow, 2 June 2015.
Meanwhile, the onset of monsoon in Kerala has been delayed. Private weather forecaster Skymet said today, 1 June 2015, that it expects rains to commence in Kerala around 4 June 2015, three days after the scheduled onset date of 1 June.
In overseas markets, European stocks reversed intraday gains today, 1 June 2015, as investors closely monitored Greece's bailout negotiations ahead of a key debt repayment later this week.Key indices in Germany, UK and France were off 0.18% to 0.45%.
This week Greece is expected to once again remain in sharp focus ahead of a key debt repayment due to the International Monetary Fund on Friday, 5 June 2015. Greece is still struggling to agree on a reform program with the creditors, which is a prerequisite for receiving the next tranche of bailout money. In an interview with French daily Le Monde on Sunday, 31 May 2015, Greek Prime Minister Alexis Tsipras blamed the creditor institutions for the lack of progress in reaching a reform deal, calling the demands absurd. He also said the lenders displayed a total indifference to the recent democratic choice of the Greek people.
Greece is scheduled to repay a total of euro 1.6 billion ($1.76 billion) to the International Monetary Fund (IMF) over the period between June 5-19.
Manufacturing activity in the eurozone grew more rapidly during May, driven by pickups in Spain and Italy, according to surveys of purchasing managers. Data firm Markit, which surveys more than 3,000 manufacturers across the eurozone, said on Monday that its purchasing managers index rose to 52.2 in May from 52.0 in April. Markit had previously estimated the PMI rose to 52.3. A reading below 50.0 indicates activity is declining, while a reading above that level indicates an increase.
Manufacturing activity in the UK expanded at a slower rate than expected in May, fuelling concerns over the country's economic outlook, industry data showed on Monday. In a report, market research group Markit said that its UK manufacturing PMI inched up to a seasonally adjusted 52 last month from a reading of 51.8 in April. On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Stocks in mainland China surged after China's official purchasing managers index showed modest gains in May 2015.The Shanghai Composite index rose 4.71%. In Hong Kong, the Hang Seng index rose 0.63%. In other Asian markets, key indices in Taiwan, South Korea and Indonesia were off 0.44% to 0.78%. In Japan, the Nikkei 225 average rose 0.03%.
China's official manufacturing purchasing managers index rose to 50.2 in May from 50.1 a month ago, the China Federation of Logistics and Purchasing, which issues the data with the National Bureau of Statistics, said in a statement. The subindex measuring new orders climbed to 50.6 from 50.2 in April, while the production subindex improved to 52.9 from 52.6, the statement said.
China's official nonmanufacturing PMI, also released on Monday, fell to 53.2 from 53.4 in April.
Separately, the final HSBC China Manufacturing Purchasing Managers Index for showed a reading of 49.2 for May 2015, beating a preliminary reading of 49.1 and rising from 48.9 in April.
Japanese capital investment rose 5.8% from the previous quarter in the January-March period, the finance ministry said Monday, as Prime Minister Shinzo Abe pushes businesses to do their part in revitalizing the economy. Capital investment was up 7.3% compared with where it stood a year earlier, the finance ministry said, the fastest on-year growth in four quarters.
US stocks edged lower during the previous trading session on Friday, 29 May 2015, after a string of weak economic reports. The government reported on Friday that the economy contracted 0.7% in the first quarter. That was worse than its initial estimate of growth of 0.2%.
Also weighing on stocks was a decline in the Chicago Business Barometer, commonly known as the Chicago PMI, a survey of Chicago-area purchasing managers that provides insight into companies' business plans. The Chicago PMI shrank to 46.2 this month from 52.3 in the prior one. By moving below the 50-point threshold, the indicator signals that the economy shrank for the region.
Separately Friday, a reading on consumer sentiment showed US consumer optimism in May was higher than expected but still down sharply from the end-of-April reading. The University of Michigan final May sentiment index came in at 90.7, up from the unexpectedly weak preliminary reading of 88.6. Both May numbers are down sharply from the end-April reading of 95.9. The index reached an 11-year high of 98.1 in January.
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