Market remains weak

Weakness continued on the bourses in afternoon trade as key benchmark indices hovered close to their intraday lows. The barometer index, the S&P BSE Sensex was currently off 127.85 points or 0.45% at 28,335.46. The market breadth indicating the overall health of the market was positive.

Capital goods stocks dropped. Shares of power generation and power distribution companies edged lower. NTPC edged higher after the company said that the Unit-I, II, III and IV of 200 megawatts each of Koldam Hydro Electric Power Project is declared on commercial operation with effect from 18 July 2015.

In overseas stock markets, European stocks gained today, 20 July 2015. Asian stocks edged lower today, 20 July 2015. US stocks closed mixed on Friday, 17 July 2015, but posted solid gains for the week, as strong earnings boosted the Nasdaq to another record high.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 605.56 crore during the previous trading session on Friday, 17 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 175.15 crore during the previous trading session on Friday, 17 July 2015, as per provisional data.

At 13:17 IST, the S&P BSE Sensex was down 127.85 points or 0.45% at 28,335.46. The index fell 143.48 points at the day's low of 28,319.83 in early afternoon trade, its lowest level since 16 July 2015. The index gained 85.82 points at the day's high of 28,549.13 in early trade.

The CNX Nifty was down 43.35 points or 0.5% at 8,566.50. The index hit a low of 8,559 in intraday trade, its lowest level since 16 July 2015. The index hit a high of 8,623.90 in intraday trade.

The BSE Mid-Cap index was up 13.75 points or 0.12% at 11,233.93. The BSE Small-Cap index was up 14.59 points or 0.12% at 11,730.96. Both these indices outperformed the Sensex.

The market breadth indicating the overall health of the market was positive. On BSE, 1,372 shares gained and 1,200 shares fell. A total of 119 shares were unchanged.

Shares of power generation and power distribution companies edged lower. Torrent Power (down 0.9%), NHPC (down 0.01%), Tata Power Company (down 2.44%), Adani Power (down 3.49%), Power Grid Corporation of India (down 0.43%), and Reliance Power (down 0.76%) declined. Reliance Infrastructure rose 0.8%.

NTPC edged higher after the company on Saturday, 18 July 2015, said that the Unit-I, II, III and IV of 200 megawatts (MW) each of Koldam Hydro Electric Power Project is declared on commercial operation with effect from 18 July 2015. The stock was up 0.22% at Rs 135.45.

Capital goods stocks dropped. Bharat Heavy Electricals (Bhel) (down 2.65%), ABB India (down 1.26%), L&T (down 1.02%), Crompton Greaves (down 0.15%) and Siemens (down 0.59%) declined.

Punjab National Bank (PNB) dropped on reports that a foreign brokerage has reiterated its 'underweight' stance on the stock. The stock declined 2.66%. The brokerage reportedly said that elevated credit costs of PNB will likely keep re-rating at bay and reverting back to historical high profitability would be very difficult. The brokerage further added that given the weakness in PNB's balance sheet, one should expect further cuts.

Meanwhile, India's weather office, the India Meteorological Department (IMD), said in its daily monsoon update issued yesterday, 19 July 2015, that the Southwest Monsoon was vigorous over Nagaland, Manipur, Mizoram & Tripura and West Madhya Pradesh and active over Haryana, Chandigarh & Delhi, South Interior Karnataka and Kerala during 24 hours ending until 8:30 IST.

For the country as a whole, cumulative rainfall during this year's monsoon season was 8% below the Long Period Average (LPA) until 19 July 2015. Region wise, the southwest monsoon was 10% above the LPA in Northwest India, 6% below the LPA in East & Northeast India, 13% below the LPA in South Peninsula and 16% below the LPA in Central India until 19 July 2015.

The quantum of and the spatial distribution of rainfall this month holds key, with July being a crucial month for the sowing of Kharif 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.

Meanwhile, the weekly data released by the Ministry of Agriculture after trading hours on Friday, 17 July 2015, showed a pick up in the sowing of Kharif crops. The total sown area for Kharif crops as on 17 July 2015 stood at 563.35 lakh hectares compared with 346.34 lakh hectares at this time last year. July is the crucial month for the sowing of Kharif crops.

Meanwhile, the Ministry of Water Resources announced in its weekly report issued after trading hours on Friday, 17 July 2015, that the water storage available in 91 important reservoirs of the country was 51.22 BCM as on 16 July 2015, which is 33% of total storage capacity of these reservoirs. This storage is 133% of the storage of corresponding period of last year and 112% of storage of average of last ten years. The present storage position during current year is better than the storage position of last year and is also better than the storage of average of last ten years.

Meanwhile, the three-week monsoon session of Parliament will begin tomorrow, 21 July 2015, as per reports. The government is looking forward to push through key bills and get approval for the recently-promulgated ordinances in the monsoon session of the Parliament.

In overseas stock markets, European stocks gained today, 20 July 2015. Key indices in Germany, France and UK rose 0.14% to 0.35%.

Lower energy prices pulled down German factory-gate prices in June, data from the federal statistics office showed today, 20 July 2015. Producer prices slipped 0.1% from May and were down 1.4% from June 2014.

Banks in Greece opened today, 20 July 2015, for the first time in three weeks, media reports said. Capital controls remain in place, and customers are now restricted to withdrawals of 420 euros ($456) a week, rather than the 60 a day previously imposed. Other restrictions, such as on sending money overseas, are still in force. Greek banks have been shuttered since June 29, after the European Central Bank capped emergency liquidity assistance to the institutions. Greece faces a 4.2 billion debt payment to the ECB today, 20 July 2015, which Athens is expected to repay using an EU bridge loan of 7.16 billion approved last week.

Asian stocks edged lower today, 20 July 2015. Key indices in Hong Kong, Taiwan and South Korea were off 0.01% to 0.78%. Key indices in China and Singapore were up 0.37% to 0.73%. Stock markets in Japan and Indonesia were shut for public holidays.

US stocks closed mixed on Friday, 17 July 2015, but posted solid gains for the week, as strong earnings boosted the Nasdaq to another record high.

Federal Reserve Vice Chair Stanley Fischer reportedly said on Friday, 17 July 2015, that there should be no further limits put on the US central bank's emergency lending powers. Fischer reportedly said the Fed could work with the post-financial crisis restrictions on the types of companies it could lend to. But he said the process had gone as far as it should, reports added.

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