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Market drifts higher as crude oil prices decline further

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Capital Market
Last Updated : Jul 29 2015 | 6:48 PM IST

IT stocks led gains for key benchmark indices. The market sentiment improved as crude oil prices extended recent losses. Brent crude oil futures edged lower on persistent worries about a global supply glut. The decline in crude oil prices augurs well for India. Key benchmark indices remained in positive zone throughout the trading session. The market breadth indicating the overall health of the market was positive. The barometer index, the S&P BSE Sensex, was provisionally up 105.67 points or 0.38% to 27564.90. In overseas stock markets, Chinese stocks ended higher with sharp gains in the last half-hour of trading.

Metal shares edged higher. Vedanta rose after announcing Q1 June 2015 results.

Indian stocks may remain volatile tomorrow, 30 July 2015, as traders roll over positions in the futures & options (F&O) segment from the near month July 2015 series to August 2015 series. The near month July 2015 derivatives contracts expire tomorrow, 30 July 2015.

Foreign portfolio investors sold shares worth a net Rs 1375.66 crore yesterday, 28 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 665.05 crore yesterday, 28 July 2015, as per provisional data released by the stock exchanges.

In overseas markets, European stocks edged higher, with investors assessing a fresh crop of earnings reports. Asian stocks ended on a mixed note. US stocks edged higher yesterday, 28 July 2015, as investors were encouraged by strong results from UPS, Ford and other big companies.

As per provisional closing, the S&P BSE Sensex was up 105.67 points or 0.38% to 27564.90. The index jumped 150.06 points at the day's high of 27,609.29 in afternoon trade. The index gained 10.86 points at the day's low of 27,470.09 in early trade.

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The CNX Nifty rose 38.05 points or 0.46% at 8,375.05, as per provisional closing. The index hit a high of 8,381.50 in intraday trade. The index hit a low of 8,338.45 in intraday trade.

The BSE Mid-Cap index rose 97.42 points or 0.89% at 11,071.42. The BSE Small-Cap index rose 96.09 points or 0.83% at 11,619.02. Both these indices outperformed the Sensex.

The market breadth indicating the overall health of the market was positive. On BSE, 1,659 shares rose and 1,179 shares fell. A total of 110 shares were unchanged.

The total turnover on BSE amounted to Rs 3317.70 crore, lower than turnover of Rs 3323 crore registered during the previous trading session.

Metal shares edged higher. Hindustan Zinc (up 1.73%), NMDC (up 1.05%), National Aluminum Company (up 0.98%), Steel Authority of India (up 0.95%), Hindalco Industries (up 0.66%), Tata Steel (up 0.38%) and Hindustan Copper (up 0.09%), edged higher. JSW Steel (down 0.06%), Jindal Steel & Power (down 0.07%) and Bhushan Steel (down 0.69%), edged lower.

Vedanta rose 0.97% to Rs 129.70. The company's consolidated profit after tax (PAT) before exceptional items fell 35% to Rs 866 crore on 1% decline in net sales/income from operations to Rs 16952 crore in Q1 June 2015 over Q1 June 2014. The result was announced at the fag end of the trading session today, 29 July 2015.

The company's earnings before interest, taxation, depreciation and amortization (EBITDA) dropped 29% to Rs 4039 crore in Q1 June 2015 over Q1 June 2014 due to a steep fall in crude oil prices and aluminium premia. EBITDA was also impacted by one-time expense related to Renewable Purchase Obligations (RPO) provision of Rs 414 crore for the previous years (FY 2013 to FY 2015) for the Aluminium, Zinc India and Copper - India businesses, Vedanta said in a statement. Vedanta further said that there will be recurring cost of approximately Rs 36 crore per quarter across the company's Aluminium, Zinc India and Copper - India businesses due to RPO.

Renewable Purchase Obligation was introduced in 2010 by the various State Electricity Regulation Commissions, making it mandatory for distribution companies, open access consumers and captive power producers to meet at least 5% of their total annual consumption of energy through renewable energy sources.

During the quarter, the company's board approved merger of its subsidiary Cairn India with Vedanta. The transaction is expected to be completed by Q4 March 2016, Vedanta said.

Meanwhile, in the global commodities markets, Brent crude oil futures edged lower amid concerns over global oil supply glut. Brent for September settlement was currently off 48 cents at $52.82 a barrel. The contract had fallen 17 cents or 0.32% to settle at $53.30 a barrel during the previous trading session.

India imports about 80% of its crude requirements and a decline in crude eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure.

Meanwhile, India's weather office, the India Meteorological Department (IMD), said in its daily monsoon update issued yesterday, 28 July 2015, that the Southwest Monsoon was vigorous over West Rajasthan and Gujarat state and was active over Gangetic West Bengal, Odisha, Jharkhand, East Rajasthan and West Madhya Pradesh during past 24 hours until 8:30 IST.

For the country as a whole, cumulative rainfall during this year's monsoon season was 3% below the Long Period Average (LPA) until 28 July 2015. Region wise, the rainfall was 17% below the LPA in South Peninsula, 8% below the LPA in East & Northeast India, 2% below the LPA in Central India and 12% above the LPA in Northwest India until 28 July 2015.

The quantum of and the spatial distribution of rainfall this month holds key; July accounts for about 33% of precipitation during the June-September monsoon season and is critical for crops. 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 today, 29 July 2015, with investors assessing a fresh crop of earnings reports. Key indices in Germany, UK and France were up 0.36% to 0.58%.

Asian shares depicted a mixed trend today, 29 July 2015. Key benchmark indices in South Korea, Japan and Taiwan were off 0.07% to 0.22%. Key benchmark indices in Singapore and Indonesia were up 0.09% to 0.14%.

Japan's retail sales rose 0.9% year-on-year, far outpacing a 0.5% increase seen, and a third straight increase spurred by higher nominal wages and tourists flocking to the country on a weaker yen.

Chinese stocks edged higher with sharp gains in the last half-hour of trading. In mainland China, the Shanghai Composite jumped 3.44%. In Hong Kong, the Hang Seng index rose 0.47%. China's securities watchdog has decided to investigate whether a coordinated dumping of shares sparked the selloff in Chinese stocks on Monday, 27 July 2015. The Shanghai Composite Index had plunged 8.5% on Monday, 27 July 2015, marking its biggest one day drop in more than eight years.

US stocks advanced yesterday, 28 July 2015, as investors were encouraged by strong results from UPS, Ford and other big companies. It was a reversal of five straight days of losses for US stock indexes.

Meanwhile, the latest data showed that US consumer confidence deteriorated this month. The Conference Board, a market research group, said its index of consumer confidence fell to 90.9 this month from a downwardly revised 99.8 in June. Meanwhile, the Case-Shiller home-price index for May showed that home prices rose 1.1% but after seasonal adjustments, the reading showed a decline of 0.2%.

A two-day policy meeting of the Federal Reserve Open Market Committee (FOMC) concludes today, 29 July 2015. The US central bank is widely expected to keep interest rates at a record low at the meeting, but expectations are rising that a rate hike could come later this year. Investors are looking ahead to the latest Fed statement to see if policymakers would give any indication on the timing of an initial rate hike.

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First Published: Jul 29 2015 | 3:39 PM IST

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