Banking stocks and index heavyweight HDFC led gains for key benchmark indices on the last trading session of the week today, 3 July 2015. The barometer index, the S&P BSE Sensex, regained the psychological 28,000 level. A small decline had pushed the Sensex below the psychological 28,000 level yesterday, 2 July 2015. The Sensex and the 50-unit CNX Nifty, both, attained their highest closing level in 11 weeks. The market breadth indicating the overall health of the market was positive. The Sensex rose 146.99 points or 0.53% to 28,092.79. Metal shares declined.
Key equity benchmark indices in India edged higher today, 3 July 2015, as a slightly weaker-than-expected US job report for June 2015 affirmed the belief that the Federal Reserve would be patient in raising interest rates. The prospect that the US central bank could soon start increasing borrowing costs following a string of encouraging economic data had been reducing the allure of higher-yielding emerging market assets over the past few weeks. Higher interest rates in the United States will boost returns on US debt and bank deposits, drawing money back from riskier markets.
Key benchmark indices hovered in positive zone for almost the entire trading session today, 3 July 2015. The overall movement for the benchmark indices was within a relatively narrow range during the trading session.
Meanwhile, the outcome of a monthly survey showed that the reduction in India's services activity accelerated last month.
Foreign portfolio investors (FPIs) bought shares worth Rs 574.12 crore from the secondary equity market yesterday, 2 July 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) sold shares worth a net Rs 219.02 crore yesterday, 2 July 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged lower as the outcome of Greece's bailout terms looks uncertain and economic data from the US overnight failed to buoy sentiment. Earlier during the global day, stocks fell sharply in mainland China. US stocks edged lower yesterday, 2 July 2015, as investors grappled with heightened uncertainty tied to Greece ahead of a referendum on Sunday, 5 July 2015, to vote on the country's status as a eurozone member.
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The S&P BSE Sensex rose 146.99 points or 0.53% to 28,092.79, its highest closing level since 17 April 2015. The index jumped 189.63 points at the day's high of 28,135.43 in morning trade. The index fell 48.35 points at the day's low of 27,897.45 at the onset of trading session.
The Nifty rose 40 points or 0.47% at 8,484.90, its highest closing level since 17 April 2015. The index hit a high of 8,497.75 in intraday trade. The index hit a low of 8,424.15 in intraday trade.
The BSE Mid-Cap index fell 1.84 points or 0.02% at 10,870. The BSE Small-Cap index rose 3.59 points or 0.03% at 11,303.58. Both theses indices underperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,526 shares rose and 1,454 shares fell. A total of 166 shares were unchanged.
The total turnover on BSE amounted to Rs 2354 crore, lower than turnover of Rs 2710.70 crore registered during the previous trading session.
Among sectoral indices on BSE, the S&P BSE Capital Goods index (up 0.57%) and the S&P BSE Bankex (up 0.76%) outperformed the Sensex. The S&P BSE Metal index (down 1.48%), the S&P BSE Realty index (down 0.54%), the S&P BSE Auto index (down 0.39%), the S&P BSE Oil & Gas index (down 0.27%), the S&P BSE Power index (up 0.11%), the S&P BSE Teck index (up 0.12%), the S&P BSE IT index (up 0.28%), the S&P BSE Consumer Durables index (up 0.33%), the S&P BSE Healthcare index (up 0.41%) and the S&P BSE FMCG index (up 0.46%) underperformed the Sensex.
Index heavyweight and housing finance major HDFC edged higher. The stock rose 2.53% at Rs 1,316.05. The stock hit a high of Rs 1,323.95 and a low of Rs 1,280 in intraday trade.
Most PSU banks stocks edged higher. Union Bank of India (up 5.03%), Central Bank of India (up 2.06%), Bank of India (up 1.20%), Vijaya Bank (up 1.10%), Syndicate Bank (up 0.95%), United Bank of India (up 0.83%), Canara Bank (up 0.77%), Bank of Baroda (up 0.67%), State Bank of India (up 0.54%), Punjab National Bank (up 0.49%), Allahabad Bank (up 0.40%) and IDBI Bank (up 0.08%), edged higher. Indian Bank (down 0.04%), Dena Bank (down 0.11%), UCO Bank (down 0.19%), Corporation Bank (down 0.2%), Andhra Bank (down 0.72%), Punjab and Sind Bank (down 0.94%) and Bank of Maharashtra (down 1.81%), edged lower.
Private sector banks edged higher. IndusInd Bank (up 2.65%), HDFC Bank (up 1.61%), Axis Bank (up 0.61%), ICICI Bank (up 0.45%), City Union Bank (up 0.29%) and Yes Bank (up 0.27%), edged higher. Kotak Mahindra Bank was down 0.57%.
Metal shares edged lower. Steel Authority of India (down 2.17%), JSW Steel (down 2.04%), Vedanta (down 2.01%), Bhushan Steel (down 1.74%), Hindustan Zinc (down 1.46%), Tata Steel (down 1.12%), Hindalco Industries (down 0.49%), Hindustan Copper (down 0.47%) and NMDC (down 0.04%), edged lower.
Jindal Steel & Power fell 5% to Rs 84.60. The company during trading hours today, 3 July 2015, announced that its crude steel production rose 38% to 11.04 lakh tonnes in Q1 June 2015 over Q1 June 2014.
Larsen & Toubro (L&T) rose 0.60% to Rs 1,807.75. The company announced during trading hours today, 3 July 2015, that L&T Heavy Engineering has successfully flagged off India's first Nuclear 700 MWe Steam Generator for Kakrapar nuclear power plant in Gujarat. The indigenously-designed Pressurised Heavy Water Reactor (PHWR) is for the Unit 3 Kakrapar power station of Nuclear Power Corporation of India (NPCIL). The first steam generator reached Kakrapar nuclear power plant on 16 June 2015. The second steam generator is scheduled to be dispatched on 4 July 2015.
A nuclear steam generator is one of the most critical safety Class 1 equipment in a nuclear island.
Infosys rose 0.18% to Rs 989.95. The company announced during trading hours today, 3 July 2015, that the company has been selected as a strategic partner by Allied Irish Banks, plc (AIB), a financial services group operating predominantly in the Republic of Ireland and the UK. Leveraging the momentum of this partnership, Infosys will also make significant investments in the Republic of Ireland. As a strategic partner to AIB, Infosys will provide application development and management, and transformation and innovation services. Infosys will also set up a 200-seat facility in Dublin to house the staff who will be transferring from AIB as well as any additional staff who will be appointed locally following recent agreements that Infosys has signed in the region.
This exciting partnership with AIB is a springboard for Infosys to expand its services into a new market. Infosys intends to set aside $10 million from its global Innovation Fund for Ireland-based start-ups. Earlier this year, lnfosys announced the US$500m Innovation Fund earmarked for investments in the growth of disruptive new technologies. infosys is keen to continue sharing its expertise to assist start-ups that are developing and enabling these technologies, the company said in a statement.
MTNL hit an upper circuit limit of 20% at Rs 19.90. With reference to the news captioned, "MTNL shares surge after report of delisting", MTNL clarified during trading hours today, 3 July 2015, that no such proposal has been under consideration of the board/management of MTNL. MTNL issued the clarification after media reports suggested that the government may delist MTNL ahead of its merger with Bharat Sanchar Nigam (BSNL). The Department of Telecom (DoT) had set a deadline of 31 July 2015 for concluding the merger of state-owned telecom companies MTNL and BSNL in order to increase their competitiveness, reports added.
The Sensex has risen 311.96 points or 1.12% in this month so far (till 3 July 2015). The Sensex has risen 593.37 points or 2.16% in this calendar year so far (till 3 July 2015). From a 52-week low of 24,892 on 14 July 2014, the Sensex has risen 3,200.79 points or 12.86%. The Sensex is off 1,931.95 points or 6.43% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, the outcome of a monthly survey today, 3 July 2015, showed that the reduction in India's services activity accelerated last month. The seasonally adjusted Nikkei Services Business Activity Index declined to 47.7 in June 2015 from 49.6 in May 2015. The index hit its lowest level since March 2014. The service sector activity fell in five of the six monitored categories, the exception being Hotels & Restaurants. Underlying the drop in services activity was a further contraction in new business. June's reduction in new work was the quickest since December 2013, with panellists commenting on competitive pressures and extreme heat. On the flip side, confidence among Indian service providers remained strong in June, with panellists on balance expecting activity to increase over the coming 12 months.
The pass on of rising services costs was reflected in a further increase in output prices during June. However, charges were raised at a slight rate that was below the series long-run trend. Input prices faced by Indian services firms rose at a softer pace in June, with inflation well below the series average. Slower increases in cost burdens were noted across the six monitored service categories. Pollyanna De Lima, economist at Markit said that the latest data suggests that the Reserve Bank of India's commitment to support economic growth may result in further rate cuts at its August meeting which could probably the last rate cut in calendar year 2015.
Meanwhile, the Reserve Bank of India (RBI) Governor Dr. Raghuram G. Rajan yesterday, 2 July 2015, said that the Indian economy was recovering and there were signs of capital investments picking up. Rajan said that the government was trying to put stalled projects back on track. He said that the monsoon, thus far, was above normal. Exports were relatively weak and the weakness was on account of global factors. The RBI governor said that the RBI will continue to do spade work for sustainable growth in the coming year. The RBI governor was speaking to the media after the conclusion of a meeting of the Central Board of Reserve Bank of India in Chennai.
Rajan said in response to a query from the media that Greece was an evolving situation. Direct exposure to Greece for India was limited as indicated by a few reports done by the Reserve Bank of India, he said. There might be initial burst of volatility in financial markets if there are untoward developments in Greece, after which discerning investors will be able to distinguish the India's story which is of growth and stability, the RBI governor said. Rajan also said that India's macro policies were good and that India had enough buffers, including foreign exchange reserves to protect against any possible eventuality.
Meanwhile, the India Meteorological Department (IMD) said in its weekly monsoon report issued yesterday, 2 July 2015, that the rainfall was below normal by 14% over the country as a whole during the period from 25 June 2015 to 1 July 2015. Region wise, the rainfall was 45% below the Long Period Average (LPA) in Central India, 27% below the LPA in South Peninsula, 17% below the LPA in East & Northeast India and 79% above the LPA in Northwest India during that period.
The IMD expects rainfall to be above normal over northwest, central and over some parts of east India during the period from 6 to 10 July 2015. Rainfall activity may remain above normal over west India during 11-15 July 2015 and over northern plains during 16-20 July 2015, as per IMD's Extended Range Forecast. The IMD has forecast below normal rainfall activity over interior Peninsular India.
Separately, the IMD said in its daily monsoon update issued yesterday, 2 July 2015, that the Southwest Monsoon was normal over Andaman & Nicobar Islands, Arunachal Pradesh, Jharkhand, Bihar, Uttarakhand, Rajasthan, East Madhya Pradesh, Marathawada, Vidarbha, Chhattisgarh, Telangana and North Interior Karnataka during past 24 hours until 8:30 IST.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 10% above the Long Period Average (LPA) until 2 July 2015. Region wise, the southwest monsoon was 23% above the LPA in Northwest India, 15% above the LPA in Central India, 12% above the LPA in South Peninsula and 3% below the LPA in East & Northeast India until 2 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.
Meanwhile, the Ministry of Water Resources today, 3 July 2015, announced in its weekly report that water storage available in 91 important reservoirs of the country as on July 2 2015 was 48.07 BCM which is 31% of total storage capacity of these reservoirs. This storage is 129% of the storage of corresponding period of last year and 145% 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.
States having better storage than last year for corresponding period are Himachal Pradesh, Punjab, Odisha, Tripura, Gujarat, Maharashtra, Uttar Pradesh, Uttarakhand, Karnataka, Kerala and Tamil Nadu. States having lesser storage than last year for corresponding period are Rajasthan, Jharkhand, West Bengal, Madhya Pradesh, Chhattisgarh, Andhra Pradesh and Telangana.
In overseas markets, European stocks edged lower today, 3 July 2015, as the outcome of Greece's bailout terms looks uncertain and economic data from the US overnight failed to buoy sentiment. Key indices in Germany, UK and France were off 0.05% to 0.37%. In Spain, the IBEX 35 index was currently up 0.33%. In Italy, the FTSE MIB index was currently up 0.23%.
Greece will hold a referendum on Sunday, 5 July 2015, on whether to accept the reform proposals put forward by its international lenders to unlock more aid. A "no" vote by Greeks could force the country out of the eurozone. A "yes" vote could cause the Syriza party led coalition government to collapse. Opinion polls have showed the outcome of the referendum was too close to call.
Greek Prime Minister Alexis Tsipras yesterday, 2 July 2015, urged a "no" vote, saying a rejection will bolster chances of quickly securing a better deal. Greece's Finance Minister Yanis Varoufakis reportedly said yesterday, 2 July 2015, that he will resign if Greece votes "yes" in a referendum on Sunday, 5 July 2015.
Greece and its lenders failed to reach an agreement over bailout funds, resulting in a missed payment to the International Monetary Fund (IMF) on Tuesday, 30 June 2015. The closure of Greece's banking system entered 5th day today, 2 July 2015. After the collapse of the bailout talks, Greece had ordered the shut down of its banking system for six days from 29 June 2015 to avoid a run on the country's banks and the nation's central bank moved to impose controls to prevent money from flooding out of the country.
Eurozone business activity hit a four-year high in June, and was slightly more brisk than previously estimated, pointing to sturdy economic growth in the second quarter and beyond. Markit today, 3 July 2015, raised its composite purchasing managers index for the eurozone--a measure of activity in manufacturing and services-- to 54.2 in June from a preliminary estimate of 54.1. A reading below 50 indicates activity is declining, while a reading above that level indicates it is increasing.
There was a notable pickup in eurozone service sector activity in June, as business quickened in Germany, France and Italy. Markit's services PMI for the eurozone rose to 54.4 in June from 53.8 in May, in line with a flash estimate.
Asian stocks ended on a mixed note today, 3 July 2015. Key benchmark indices in Hong Kong, South Korea and Taiwan fell 0.14% to 0.83%. Key benchmark indices in Japan, Indonesia and Singapore rose 0.08% to 0.77%.
Stocks fell sharply in mainland China, even as Beijing moves swiftly to try to plug losses, after three weeks of declines left markets sharply lower than highs reached in June. The Shanghai Composite lost 5.77%. The China Securities Regulatory Commission yesterday, 2 July 2015, announced that it would launch an investigation into suspected manipulation of shares and futures. Meanwhile, a group of the first 28 companies to be listed on the more speculative Shenzhen Enterprise Board issued a joint statement today, 3 July 2015, vowing they would use any possible means, including stock buybacks and other share purchases, to support their stock prices and protect the stability of that market.
The HSBC China Services Purchasing Managers' Index fell to 51.8 in June from 53.5 in May, HSBC Holdings PLC said Friday, suggesting activity outside the nation's factories remains under pressure. China's service sector activity growth also eased to a five-month low in June, HSBC and Markit said in the statement. The HSBC China Services PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives at more than 400 private service-sector companies. China's official nonmanufacturing PMI, a competing a gauge, rose to 53.8 in June from 53.2 in May, according to the China Federation of Logistics and Purchasing.
US stocks edged lower yesterday, 2 July 2015, as investors grappled with heightened uncertainty tied to Greece ahead of a referendum on Sunday, 5 July 2015, to vote on the country's status as a eurozone member. The US stock market is closed today, 3 July 2015, for the Independence Day holiday.
Investors digested reports on the health of the labor market with monthly jobs report and weekly unemployment claims coming in softer than expected. Government data for June showed the economy added 223,000 new jobs. However, May and April numbers were cut. The unemployment rated ticked down to 5.3%, mostly due to more people leaving the labor force. Separately, weekly jobless claims climbed 10,000 to 281,000.
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