Weakness continued for key benchmark indices in morning trade. Benchmark indices witnessed high intraday volatility. The barometer index, the S&P BSE Sensex, remained below the psychological 28,000 mark after falling below that mark at the onset of the trading session as the index opened with a downward gap. In overseas markets, Chinese stocks fell sharply. Stocks were in across Asia and trading in US index futures indicated a weak opening of US stocks later in the global day. The Sensex was currently off 178.60 points or 0.63% at 27,993.09. The market breadth indicating the overall health of the market was negative.
Worries about China's faltering demand amid China's stock slide weighed on metal and mining stocks.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 23.54 crore yesterday, 7 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 94.71 crore yesterday, 7 July 2015, as per provisional data released by the stock exchanges.
In overseas markets, Asian stocks fell amid worries about the sell-off in the Chinese stock markets and the Greek debt crisis. US stocks ended with modest gains yesterday, 7 July 2015, as speculation grew that Greece's crisis would be contained.
At 10:18 IST, the S&P BSE Sensex was down 178.60 points or 0.63% at 27,993.09. The index lost 295.11 points at the day's low of 27,876.58 in early trade, its lowest level since 6 July 2015. The index fell 140.24 points at the day's high of 28,031.45 in opening trade.
The 50-unit CNX Nifty was down 60.70 points or 0.71% at 8,450.10. The index hit a low of 8,417.50 in intraday trade, its lowest level since 6 July 2015. The index hit a high of 8,457.25 in intraday trade.
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The market breadth indicating the overall health of the market was negative. On BSE, 1,043 shares declined and 848 shares rose. A total of 75 shares were unchanged.
The BSE Mid-Cap index was off 21.25 points or 0.19% at 10,998.74. The fall in the index was lower than Sensex's decline in percentage terms. The BSE Small-Cap index was up 8.42 points or 0.07% at 11,506.74, outperforming the Sensex.
The total turnover on BSE amounted to Rs 1368 crore by 10:15 IST compared with turnover of Rs 375 crore by 09:30 IST.
Worries about China's faltering demand amid China's stock slide weighed on metal and mining stocks. China is the world's largest consumer of steel, copper and aluminum. Vedanta (down 4.29%), JSW Steel (down 1.21%), Tata Steel (down 2.76%), Steel Authority of India (Sail) (down 2.29%), National Aluminium Company (down 1.01%), Hindustan Zinc (down 2.02%), Jindal Steel & Power (down 0.73%), NMDC (down 1.43%), Hindustan Copper (down 2.06%) edged lower.
Shares of Hindalco Industries were off 3.64%. With respect to news article titled, "PIL on Hindalco: I-T Dept filed report, estimates that Hindalco dealing with unaccounted cash worth Rs 200 crore - Hindalco paid Rs 7 crore in kickbacks to environment ministry", Hindalco Industries clarified after market hours yesterday, 7 July 2015, that there was nothing new in the allegations and the matter is already under investigation. The company reiterated that neither the diary nor the cash recovered belongs to the company. The Central Bureau of Investigation (CBI) had raided Hindalco's offices in four cities as part of its investigations into alleged illegalities in the allocation of two coal blocks in Odisha.
Meanwhile, India's weather office, the India Meteorological Department (IMD), said in its daily monsoon update issued yesterday, 7 July 2015, that the Southwest Monsoon was active over Gangetic West Bengal, Jharkhand, Bihar, West Uttar Pradesh, Uttarakhand and Haryana, Chandigarh & Delhi and was normal over Nagaland, Manipur, Mizoram & Tripura, East Uttar Pradesh, Himachal Pradesh, West Rajasthan and Chhattisgarh during the past 24 hours until 8:30 IST.
For the country as a whole, cumulative rainfall during this year's monsoon season was 2% below the Long Period Average (LPA) until 7 July 2015. Region wise, the southwest monsoon was 12% above the LPA in Northwest India, 5% below the LPA in Central India and 4% below the LPA each in South Peninsula and East & Northeast India until 7 July 2015.
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.
Asian stocks edged lower today, 8 July 2015, amid worries about the sell-off in the Chinese stock markets and the ongoing Greek debt crisis. Key benchmark indices in Singapore, Taiwan, Japan, Indonesia and South Korea fell by 0.26% to 3.19%.
Stocks in mainland China dropped sharply amid concern that the rout in mainland stocks may spread to the wider economy. The Shanghai Composite index lost 3.88%. Hong Kong's Hang Seng index dropped 4.2%. The heavy losses came despite a rare pledge early today, 8 July 2015, by the People's Bank of China that it would closely monitor stock movements and continue to use various means to support the state-backed margin-finance entity China Securities Finance Corp. (CSF) in order to protect market stability.
Earlier, China had suspended initial public offerings and brokerages pledged to buy shares in weekend measures aimed at halting the market rout. China's main stock benchmarks have lost more than a third of their value since hitting mid-June highs.
Trading in US index futures indicated that the Dow could fall 115 points at the opening bell today, 8 July 2015. US stocks ended with modest gains yesterday, 7 July 2015, as speculation grew that Greece's crisis would be contained. In economic data, the US trade deficit rose 2.9% in May, mostly because the US exported fewer aircraft and other manufactured goods. Another data released by the US Department of Labor yesterday, 7 July 2015, showed that job openings at US workplaces rose to a record high of 5.36 million in May (data go back to the end of 2000) from 5.33 million in April.
Meanwhile, investors are now looking ahead to the minutes from the Federal Reserve's June meeting, which are set to be released today, 8 July 2015. The International Monetary Fund yesterday, 7 July 2015, warned of the risks of raising rates too early in the US and called for the Fed to delay a raise until 2016.
In Europe, following the emergency euro zone summit in Brussels yesterday, 7 July 2015, European leaders gave debt-stricken Greece a final deadline of Sunday to reach a new bailout deal and avoid Greece's exit from the euro zone. Representatives of the 19-country euro zone said all 28 European Union leaders would meet on Sunday, 12 July 2015, to decide Greece's fate. The talks were organized after Greeks voted in a referendum on Sunday, 5 July 2015, against a bailout that carried stringent austerity measures.
Meanwhile, Greek Prime Minister Alexis Tsipras yesterday, 7 July 2015, said he wanted a "socially just and economically viable agreement". The process will be fast, he said.
Without some new cash in the coming weeks, Greece won't be able to make a euro 3.5 billion ($3.8 billion) bond payment to the European Central Bank (ECB) which is payable on 20 July 2015. Such a nonpayment could push the ECB to cut emergency lending to Greek banks--a move that would send the country's financial system into meltdown and force the government to print its own money to recapitalize them. Greek banks have been shut for more than a week, after the ECB put a limit on the emergency loans they had been drawing to buffer growing deposit outflows. Cash withdrawals from ATMs have been limited to euro 60 a day and depositors are unable to transfer money abroad.
Some short-term funding and the prospect of a longer-term bailout deal from the rest of the eurozone could allow Greece--and the ECB--to let banks reopen and normal economic activity in the country to resume.
Greece's last bailout expired last Tuesday and Greece missed a euro 1.6 billion payment to the IMF.
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