Key benchmark indices extended losses and hit fresh intraday low in mid-afternoon trade. At 14:20 IST, the barometer index, the S&P BSE Sensex, was down 117.16 points or 0.43% at 27,161.60. The losses for the Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was currently down 43.50 points or 0.52% at 8,327.20. Data showing deceleration in growth in India's services sector in June 2016 and weakness in global stocks weighed on sentiment on the domestic bourses.
The Sensex lost 151.46 points or 0.55% at the day's low of 27,127.30 in mid-afternoon trade, its lowest level since 1 July 2016. The barometer index rose 69.90 points or 0.25% at the day's high of 27,348.66 at the onset of the trading session. The Nifty lost 50.75 points or 0.6% at the day's low of 8,319.95 in mid-afternoon trade, its lowest level since 1 July 2016. The index rose 10.75 points or 0.12% at the day's high of 8,381.45 at the onset of the trading session.
The market breadth indicating the overall health of the market was negative. On BSE, 1,488 shares fell and 1,169 shares rose. A total of 112 shares were unchanged. The BSE Mid-Cap index was currently down 0.25%. The BSE Small-Cap index was currently down 0.25%. The decline for both these indices was lower than the Sensex's fall in percentage terms.
The outcome of a monthly survey showed that growth in India's services sector decelerated in June 2016 due to a softer expansion in new work. The Nikkei India Services Business Activity Index dropped to 50.3 in June 2016 from 51 in May 2016. Anecdotal evidence suggested that strong competitive pressures restricted new business gains. A faster increase in input costs contrasted with a slowdown in charge inflation. According to respondents, activity growth over the coming year is set to be supported by aggressive marketing campaigns. Some panellists expressed concerns regarding competitive pressures.
In overseas stock markets, Asian and European stocks edged lower as investors became cautious ahead of the release the influential monthly US nonfarm payroll report. The US government will announce nonfarm payroll report for June 2016 on Friday, 8 July 2016. Shares in mainland China bucked the weak trend in Asia after the latest data showed acceleration in growth in China's services sector in June 2016. The Shanghai Composite index ended 0.6% higher. In Hong Kong, the Hang Seng settled 1.46% lower. The Caixin China services purchasing managers' index (PMI) rose to an 11-month high of 52.7 in June 2016 from 51.2 in May 2016. Readings above 50 indicate an expansion on a monthly basis, while readings below signal contraction.
Capital goods stocks were mixed. Havells India (down 0.63%), ABB India (down 0.68%), Thermax (down 0.78%), and Siemens (down 0.58%) declined. Bharat Heavy Electricals (Bhel) (up 1.3%), Bharat Electronics (up 0.23%), and BEML (up 1.23%) gained.
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L&T declined 0.2%. The company announced that the company through its joint venture companies L&T-MHPS Boilers Private Limited (LMB) and L&T-MHPS Turbine Generators Private Limited (LMTG) has secured export orders worth $71.3 million from Mitsubishi Hitachi Power Systems Limited (MHPS). LMB contract includes supply of pressure parts for 2,000 megawatts (MW) power plant in Indonesia and contains furnace header, panel, coils and piping. LMB is currently executing nine export orders for the supply of pulverisers and pressure parts for various MHPS projects in Japan and Indonesia. LMTG contract includes supply of turbines for the 2,000 MW plant. The order takes LMTG's tally of export orders to 22 units out of which 11 are presently being executed, thus increasing its global footprint of subcritical to ultra supercritical steam turbines and components to the Americas, Middle East and the Far East. The announcement was made during market hours today, 5 July 2016.
The BSE Capital Goods index had outperformed the market over the past one month till 4 July 2016, rising 7.08% compared with 1.62% rise in the Sensex. The index had also outperformed the market in past one quarter, gaining 18.05% as against Sensex's 7.4% rise.
Shares of most power generation and power distribution companies declined. Torrent Power (down 1.42%), NHPC (down 1.36%), Tata Power Company (down 0.87%), NTPC (down 1.09%), Adani Power (down 0.17%), and Power Grid Corporation of India (down 0.67%) declined. GVK Power & Infrastructure (up 6.47%), Reliance Infrastructure (up 2.8%) and Reliance Power (up 2.29%) gained.
The BSE Power index had outperformed the market over the past one month till 4 July 2016, rising 7.49% compared with 1.62% rise in the Sensex. The index had also outperformed the market in past one quarter, gaining 11.87% as against Sensex's 7.4% rise.
ICICI Bank declined 0.5%. The bank said that an enabling approval of the shareholders is being sought at Annual General Meeting scheduled to be held on 11 July 2016. for granting consent to the bank to borrow by way of issue of non-convertible debentures including but not limited to bonds and non-convertible debentures on a private placement basis for an amount of upto Rs 25000 crore.
Hindustan Construction Company (HCC) jumped 10.05% after the company as a lead partner in the joint venture with MMS of Russia was awarded Rs 2523 crore contract by the Mumbai Metro Rail Corporation. The announcement was made during market hours today, 5 July 2016. The contract is for construction of 4,072 meter corridor of the underground metro line including four underground stations at Chatrapati Shivaji Terminus, Kalbadevi, Girgaon and Grant Road and twin bored tunnels of total length of 3,115 meters. The project is to be completed in 55 months, HCC said. This is part of the Line 3 of the Mumbai Metro from Colaba to SEEPZ, the company said. When completed, the 33.5 kilometre long line with 26 underground and one at-grade station will be the first underground metro line in Mumbai. Commenting on the metro rail contract, Arun Karambelkar, President & CEO- E&C, HCC said that the company is a pioneer in underground construction and that the management is confident of completing the work in an efficient and speedier manner.
Elantas Beck India rose 2.92% after the company said that its board of directors granted in-principle approval for the sale of the company's 6,239 square metre property at Pune to Pune-based Sukhwani Associates. The approval is subject to the terms and conditions to be agreed vide memorandum of understanding to be executed between the company and Sukhwani Associates. The board will meet again on 27 July 2016 for its final approval in the proposal.
Meanwhile, Prime Minister Narendra Modi today, 5 July 2016, carried out a major expansion of his Council of Ministers, inducting 19 new faces, including several dalit and OBC leaders from poll-bound states like Uttar Pradesh. Environment minister Prakash Javadekar has been promoted to Cabinet rank. Five ministers in Modi's council were reportedly dropped to make way for the new entrants since constitutionally the council can have only 82 ministers. According to reports, the five ministers dropped from the Cabinet are Minister of State (MoS) for Chemicals and Fertilizers Nihal Chand Meghwal, MoS HRD Ram Shankar Katheria, MoS Water Resources Sanwar Lal Jat, MoS Tribal Affairs Manuskhbhai D. Vasva and MoS Agriculture M.K. Kundariya.
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