Key benchmark indices continued to display divergent trend in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was currently off 4.91 points or 0.02% at 28,015.96. The 50-unit CNX Nifty was currently up 6.70 points or 0.08% at 8,459.75. The market breadth indicating the overall health of the market was positive. The Sensex was currently trading above the psychological 28,000 level, having alternately moved above and below that mark in intraday trade so far. A rally took the Sensex past the psychological 28,000 level yesterday, 1 July 2015.
Shares of agri sector related companies rose after the government today, 2 July 2015, approved a Rs 50000-crore irrigation scheme for five years called Pradhan Mantri Krishi Sinchayee Yojana (PMKSY). Capital goods shares edged higher.
Meanwhile, Reserve Bank of India Governor Raghuram Rajan reportedly said today, 2 July 2015, that India's economy is in the process of a steady recovery and that the government needs to work on reforms to accelerate growth further.
Foreign portfolio investors bought shares worth a net Rs 75.03 crore yesterday, 1 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 52.12 crore yesterday, 1 July 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged higher. Asian stocks were in green. But, Chinese shares slumped. US stocks finished higher yesterday, 1 July 2015, as investors looked beyond the latest developments in Greece and focused on economic data.
At 14:16 IST, the S&P BSE Sensex was down 4.91 points or 0.02% at 28,015.96. The index rose 95.09 points at the day's high of 28,115.96 at the onset of trading session, its highest level since 20 April 2015. The index fell 59.79 points at the day's low of 27,961.08 in morning trade.
The CNX Nifty was up 6.70 points or 0.08% at 8,459.75. The index hit a high of 8,479.25 in intraday trade. The index hit a low of 8,437.20 in intraday trade.
The BSE Mid-Cap index was up 81.43 points or 0.75% at 10,900.74. The BSE Small-Cap index was up 83.15 points or 0.74% at 11,318.83. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,467 shares rose and 1,107 shares fell. A total of 118 shares were unchanged.
Shares of agri sector related companies rose after the government today, 2 July 2015, approved a Rs 50,000-crore irrigation scheme for five years called Pradhan Mantri Krishi Sinchayee Yojana (PMKSY). Tractor major Mahindra & Mahindra (M&M) was up 1.87% to Rs 1,314.35.
Among other agri sector related stocks, Advanta (up 4.65%), Jain Irrigation (up 3.24%), Shakti Pumps (up 2.58%), Monsanto India (up 1.73%), Aries Agro (up 1.05%) and Kaveri Seed Company (up 0.25%) edged higher.
Capital goods shares edged higher. BEML (up 5.10%), Crompton Greaves (up 2.62%), Siemens (up 2.21%), Thermax (up 2.09%), Jindal Saw (up 1.80%), ALSTOM India (up 1.67%), Lakshmi Machine Works (up 1.26%), ABB India (up 0.82%), Bharat Electronics (up 0.80%), AIA Engineering (up 0.75%), Havells India (up 0.38%), SKF India (up 0.08%) and Alstom T&D India (up 0.07%), edged higher. Pipavav Defence and Offshore Engineering Company (down 0.17%), Larsen & Toubro (down 0.4%), Punj Lloyd (down 0.61%), Bharat Heavy Electricals (down 0.68%) and Suzlon Energy (down 1.08%), edged lower.
Meanwhile, Reserve Bank of India Governor Raghuram Rajan reportedly said today, 2 July 2015, that India's economy is in the process of a steady recovery and that the government needs to work on reforms to accelerate growth further. Rajan was addressing reporters after the central bank's board meeting in Chennai. Turning to the ongoing Greece situation, Rajan said India's direct exposure to the country was "very, very" limited. He said he hoped foreign investors would be attracted to India nonetheless given growth prospects and given foreign exchange buffers were healthy. Still, Rajan noted that the central bank needed to be careful about relying on foreign investors to finance government or corporate bonds markets, though he was committed to a steady expansion of overseas money in the country's debt.
Meanwhile, the government today, 2 July 2015, announced that the Cabinet Committee on Economic Affairs (CCEA) has approved a Rs 50,000-crore irrigation scheme for five years called Pradhan Mantri Krishi Sinchayee Yojana (PMKSY). The allocation for the current financial year is Rs 5300 crore. The major objective of the PMKSY is to achieve convergence of investments in irrigation at the field level, expand cultivable area under assured irrigation (Har Khet ko pani), improve on-farm water use efficiency to reduce wastage of water, enhance the adoption of precision-irrigation and other water saving technologies (More crop per drop), enhance recharge of aquifers and introduce sustainable water conservation practices by exploring the feasibility of reusing treated municipal based water for peri-urban agriculture and attract greater private investment in precision irrigation system. It is expected that PMKSY will provide convergence to existing schemes of water management, thus bringing efficiency to the use of water, according to a government statement.
The Cabinet Committee on Economic Affairs (CCEA) has also given its approval to a Central Sector Scheme for Promotion of National Agricultural Market through Agri-Tech Infrastructure Fund (ATIF). An amount of Rs 200 crore has been earmarked for the scheme from 2015-16 to 2017-18. The target is to cover 585 selected regulated markets across the country with the common e-platform to provide farmers and traders with access to opportunities for purchase/sale of agri-commodities at optimal prices in a transparent manner across the country. Besides, private markets will also be allowed access to the e-platform thereby enhancing its outreach.
Meanwhile, the Union Cabinet today, 2 July 2015, gave its approval for India's first integrated National Policy for Skill Development and Entrepreneurship 2015. The policy acknowledges the need for an effective roadmap for promotion of entrepreneurship as the key to a successful skills strategy, according to a government statement. In the entrepreneurship domain, the policy seeks to educate and equip potential entrepreneurs, both within and outside the formal education system. It also seeks to connect entrepreneurs to mentors, incubators and credit markets, foster innovation and entrepreneurial culture, improve ease of doing business and promote a focus on social entrepreneurship.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update issued yesterday, 1 July 2015, that the Southwest Monsoon was active over Sub-Himalayan West Bengal & Sikkim and Uttarakhand during the past 24 hours until 8:30 IST.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 13% above the Long Period Average (LPA) until 1 July 2015. Region wise, the southwest monsoon was 28% above the LPA in Northwest India, 20% above the LPA in Central India, 15% above the LPA in South Peninsula and 1% below the LPA in East & Northeast India until 1 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.
In overseas marker, European stocks edged higher today, 2 July 2015. Key indices in Germany, France and UK were up 0.11% to 0.33%. In Italy, the FTSE MIB index was currently down 0.16%. In Spain, the IBEX 35 index was currently up 0.21%.
Sweden's central bank Riksbank today, 2 July 2015, cut its main repurchase, or repo, rate to minus 0.35% from minus 0.25%, saying the Swedish krona has become stronger than the central bank had forecast. In the euro area, economic activity is strengthening, but the events in Greece over the past few days have substantially increased the uncertainty, the bank said in its announcement, citing risks to the upturn in inflation in Sweden. The Riksbank added that the repo rate is expected to remain at minus 0.35% for just over a year, noting it leaves open the possibility of cutting that rate further. The Riksbank also said it will increase its bond-buying program by 45 billion Swedish krona ($5.32 billion) from September until the end of the year.
Greek Prime Minister Alexis Tsipras yesterday, 1 July 2015, pitched a compromise to extend Greece's bailout. Still, Tsipras continued to call on Greeks to vote "no" in Sunday's referendum on creditors' previous demands, according to media reports. Opinion polls suggest the vote will be close.
Greece defaulted on a payment to the International Monetary Fund on 30 June 2015 as the rescue program that has sustained it for five years expired and its creditors rejected a last-ditch effort to buy more time. Greece has shut down 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. On 28 June 2015, the European Central Bank froze emergency loans to Greek banks at their current level of around euro 89 billion, a move that left Greek authorities with little choice but to keep the country's banks closed.
Greece will hold a referendum 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 and push the country into what could be the darkest chapter of its six-year debt crisis.
Asian markets edged higher today, 2 July 2015. Key benchmark indices in Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan were up by 0.03% to 1.16%.
China's Shanghai Composite was down 3.48%. China's securities regulator has relaxed rules on margin trading -- borrowed funds that fuelled a spectacular stock market rally -- after measures including an interest rate cut failed to stop equities falling. Margin investors only need to deposit a small proportion of the value of their trade, generating bigger profits for a given amount of money put down -- but also bigger losses. Authorities tightened rules on the practice in June in an attempt to curb enhanced market risks, but the move was among the triggers for the recent heavy falls in Chinese shares.
US stocks finished higher yesterday, 1 July 2015, as investors looked beyond the latest developments in Greece and focused on economic data.
US private employers hired the most workers in six months in June and factory activity picked up, providing fresh evidence the economy was gathering solid momentum after contracting at the start of the year. The brightening growth outlook in the US was also bolstered by other data yesterday showing auto sales remained strong in June 2015 and construction spending rose in May 2015 to its highest level in just over 6-1/2 years.
The US government is scheduled to announce the monthly nonfarm payrolls data for June 2015 later in the global day today, 2 July 2015. The release of the monthly payroll report has been brought forward from the usual reporting day of Friday because of the Independence Day holiday. A stronger-than-expected nonfarm payrolls report could bring forward investor expectations for a Federal Reserve interest rate rise.
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