Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 26.50 points at the opening bell, tracking weakness in Asian markets and overnight losses on the Wall Street.
In overseas stock markets, Asian stocks edged lower today, 26 June 2015. US stocks closed lower yesterday, 25 June 2015, failing to hold initial gains, as lack of resolution between Greece and its creditors weighed on investor sentiment.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 280.21 crore yesterday, 25 June 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 8.45 crore yesterday, 25 June 2015, as per provisional data.
Among corporate news, Bank stocks will be in focus after the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report (FSR) June 2015 published yesterday, 25 June 2015, that while risks to India's banking sector, as reflected by the Banking Stability Indicator and Map, have moderated marginally since September 2014, concerns remain over the continued weakness in asset quality indicated by the rising trend in stressed advances ratio of scheduled commercial banks (SCBs), especially of public sector banks (PSBs). Macro stress tests suggest that current deterioration in the asset quality of SCBs may continue for few more quarters and PSBs may have to bolster their provisions for credit risk from present levels, to meet the 'expected losses' if macroeconomic environment were to deteriorate under assumed stress scenarios. However, capital to risk weighted assets ratio (CRAR) of SCBs, at system level, was observed to remain above the regulatory minimum even under adverse macro-economic conditions assumed in these tests.
The report notes that while the regulatory move towards encouraging greater market access and market discipline will help the development of domestic financial markets, the banking sector, especially the PSBs will be expected to continue to shoulder the needs of the accelerating growth in the economy. In this context, the policy initiatives for improving the governance and management processes at public sector banks become significant.
ICICI Bank after market hours yesterday, 25 June 2015, announced a reduction of 5 basis points (bps) in its base rate to 9.70% per annum (pa) from 9.75% with effect from 26 June 2015. With effect from 1 July 2010, interest rates on new loans and advances, including consumer loans, are determined with reference to the bank's base rate, ICICI Bank said.
The Reserve Bank of India (RBI) said in its half yearly Financial Stability Report (FSR) June 2015 published yesterday, 25 June 2015, that India's relatively stronger macroeconomic fundamentals in terms of growth, inflation, current account and fiscal deficits provide a reasonable degree of resilience to Indian financial system in the event of spill-over effects from global factors. However, with the continued uncertainty over global growth and in the absence of effective international monetary policy coordination, there can be no room for complacency, the report stated. The FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability, as also the resilience of the financial system.
The latest Financial Stability Report notes that there has been significant improvement in India's macroeconomic environment and going forward, economic performance is expected to be better. External vulnerability has reduced and progress has been made with regard to fiscal consolidation. While foreign portfolio flows to India have been strong during the past year, unexpected changes in monetary policy in advanced economies (AEs) may lead to slowdown/reversal of foreign portfolio flows, with implications for segments of financial markets, according to the report. According to the FSR, India is better prepared to deal with the volatility, as compared to previous episodes.
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According to the FSR report, concerns emanating from rapid rise in algorithm trading in recent years highlight the need for caution for India's securities markets, while measures have been taken to address the same. Significant steps have been taken to tighten the regulations dealing with illegal money-raising activities and insider trading, and also to strengthen the risk management systems at depositories.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update issued yesterday, 25 June 2015, that the southwest monsoon has been further advanced into remaining parts of north Arabian Sea, Gujarat state, Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Uttarakhand, Punjab, East Rajasthan, entire Haryana, Chandigarh & Delhi and some parts of West Rajasthan. The southwest monsoon was vigorous over East Rajasthan, Gujarat Region and Saurashtra & Kutch and active over Jharkhand, Uttarakhand, Haryana, Chandigarh & Delhi, Himachal Pradesh, West Madhya Pradesh, Madhya Maharashtra and South interior karnataka during past 24 hours until 8:30 IST, the IMD said.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 24% above the Long Period Average (LPA) until 24 June 2015. Region wise, the southwest monsoon was 52% above the LPA in Central India, 32% above the LPA in South Peninsula, 4% above the LPA in East & Northeast India and 5% below the LPA in Northwest India until 24 June 2015.
In a separate weekly monsoon report, the IMD said that the during the week, rainfall was above normal by 44% over the country as a whole. Rainfall activity was excess over Central India and South Peninsula, the IMD said.
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.
Capital goods stocks and index heavyweights led gains for the key benchmark indices yesterday, 25 June 2015. Gains for the benchmark indices were triggered by expectations of a resolution in the long-running talks over Greece's debt crisis. The S&P BSE Sensex rose 166.30 points or 0.60% to settle at 27,895.97, its highest closing level since 22 May 2015.
In overseas stock markets, Asian stocks edged lower today, 26 June 2015. Key indices in China, Japan, Hong Kong, Singpore and Taiwan were off 0.23% to 2.94%. Key indices in South Korea and Indonesia were up 0.21% to 0.27%.
US stocks closed lower yesterday, 25 June 2015, failing to hold initial gains, as lack of resolution between Greece and its creditors weighed on investor sentiment.
In Europe, Greece and its international creditors remain in deadlock over its debt crisis despite a series of top-level meetings. Prime Minister Alexis Tsipras failed to reach a deal with Greece's lenders, then a meeting of European finance ministers broke up without progress.
Greece needs a deal to unlock new financing ahead of a 1.54 billion euro ($1.75 billion) debt payment due to the International Monetary Fund (IMF) on 30 June 2015. On the same day, Greece's international bailout expires. A default on its international creditors-the IMF and other eurozone governments-could force Greece into a messy exit from the euro.
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