Amid a sharp slide in global stocks, key equity benchmark indices in India extended losses in mid-afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit two-week low. The Sensex was currently off 269.55 points or 0.97% at 27,586.87. The broad market depicted weakness. There were more than two losers against every gainer on BSE. The BSE Mid-Cap index was off 2.1%. The BSE Small-Cap index was down 1.76%. The decline in both these indices was higher than the Sensex's drop in percentage terms.
Stocks fell across the globe as concerns over China's growth outlook persisted after the country's central bank further guided its currency lower today, 12 August 2015, a day after it roiled global markets with its decision to devalue the yuan by nearly 2% by shifting to a more market-driven rate. For Asia, a weaker yuan is expected to pressure other central banks in the region to devalue their currencies to keep their economies competitive against China's.
Closer home, India's rupee fell sharply against the dollar as China's move to devalue the yuan sparked fears of a global currency war. The partially convertible rupee was currently hovering at 64.8375 against the dollar, compared with its close of 64.2075 during the previous trading session.
In the stock market, banking stocks declined. Telecom stocks witnessed a mixed trend.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 736.81 crore yesterday, 11 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 130.74 crore yesterday, 11 August 2015, as per provisional data.
At 14:17 IST, the S&P BSE Sensex was down 269.55 points or 0.97% at 27,586.87. The index slumped 302.95 points at the day's low of 27,563.05 in mid-afternoon trade, its lowest level since 29 July 2015. The index gained 17.24 points at the day's high of 27,883.33 in early trade.
The CNX Nifty was down 94.15 points or 1.11% at 8,368.20. The index hit a low of 8,364.85 in intraday trade, its lowest level since 29 July 2015. The index hit a high of 8,446.95 in intraday trade.
The market breadth indicating the overall health of the market was quite weak. There were more than two losers against every gainer on BSE. 2,017 shares declined and 706 shares rose. A total of 117 shares were unchanged.
The BSE Mid-Cap index was down 241.42 points or 2.1% at 11,261.13. The BSE Small-Cap index was down 209.72 points or 1.76% at 11,709.32. The decline in both these indices was higher than the Sensex's drop in percentage terms.
Telecom stocks were mixed. Bharti Airtel (down 1.89%), Reliance Communications (down 2.77%) and MTNL (down 2.58%) declined. Tata Teleservices (Maharashtra) (up 0.43%) and Idea Cellular (up 0.53%) gained.
Bank stocks declined. Among public sector banks, Syndicate Bank (down 2.79%), Punjab National Bank (down 1.63%), Corporation Bank (down 1.46%), Allahabad Bank (down 2.06%), Bank of India (down 2.05%), State Bank of India (SBI) (down 3.21%), Union Bank of India (down 2.6%), Canara Bank (down 4.28%), and United Bank of India (down 2.32%) edged lower. Bank of Baroda (up 0.65%) and UCO Bank (up 0.29%) gained.
Among private sector banks, Axis Bank (down 1.87%), HDFC Bank (down 1.28%), ICICI Bank (down 2.95%), Kotak Mahindra Bank (down 1.81%), Federal Bank (down 2%), Yes Bank (down 1.68%), edged lower.
IndusInd Bank fell 0.89%. The private sector bank during market hours today, 12 August 2015, announced that the bank will use the capital raised through a recently completed preferential issue to promoters and qualified institutional placement to support the bank's growth and also to augment the Capital Adequacy Ratio. IndusInd Bank raised Rs 752.74 crore from preferential issue of shares to promoters on 6 August 2015. The bank had last month raised Rs 4327.98 crore from qualified institutional placement (QIP).
Meanwhile, investors continue to watch the progress of the monsoon rains which will have a bearing on food prices and rural income. India's weather office, the India Meteorological Department (IMD), said in a daily report issued yesterday, 11 August 2015, that for the country as a whole, cumulative rainfall during this year's monsoon season was 9% below the Long Period Average (LPA) until 11 August 2015. Region wise, the rainfall was 21% below the LPA in South Peninsula, 11% below the LPA in East & Northeast India, 9% below the LPA in Central India and 2% above the LPA in Northwest India until 11 August 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.
Among key macro economic announcements this week, the government is scheduled to unveil the consumer price index (CPI) data for the month of July 2015 and industrial production data for June 2015 at 17:30 IST today, 12 July 2015. The CPI inflation accelerated to 5.4% in June 2015 from 5.01% in May 2015. Industrial production rose 2.7% in May 2015, compared with a revised growth of 3.4% in April 2015.
The government will release data on inflation based on the wholesale price index (WPI) for July 2015 at around 12:00 noon on Friday, 14 August 2015. The WPI inflation continued to be in negative zone for the eighth straight month in June 2015. The WPI inflation stood at negative 2.4% in June 2015, unchanged from the level in May 2015.
In overseas markets, European stocks moved sharply lower today, 12 August 2015, as concerns over China's growth outlook persisted after the country's central bank allowed the tightly controlled yuan to slide even further. Key benchmark indices in UK, France and Germany were off 1.33% to 2.31%.
Asian stocks edged lower today, 12 August 2015, after China's central bank further guided its currency lower today, 12 August 2015, a day after it roiled global markets with its decision to devalue the yuan by nearly 2% in a surprise decision announced yesterday, 11 August 2015. Key indices in South Korea, Taiwan, Indonesia, Japan and Singapore were off 0.56% to 3.49%. A weaker yuan is expected to pressure other central banks in Asia to devalue their currencies to keep their economies competitive against China's.
In mainland China, the Shanghai Composite was off 1.06%. In Hong Kong, the Hang Seng index lost 2.38%.
Growth in Chinese industrial production slowed in July, according to official data released today, 12 August 2015, in a sign of additional economic sluggishness in the world's second-largest economy. Value-added industrial output in China rose 6% in July from a year earlier, slowing from a 6.8% year-over-year increase in June, data from the National Bureau of Statistics showed. Retail sales in China increased 10.5% in July from a year earlier, slowing from a 10.6% year-over-year increase in June.
Trading in US index futures indicated that the Dow could slide 166 points at the opening bell today, 12 August 2015. US stocks closed sharply lower yesterday, 11 August 2015, in the wake of a surprise devaluation of the yuan by Chinathe world's second-largest economy.
Meanwhile, Moody's Investors Service reportedly cut Brazil's credit rating to near-junk status yesterday, 11 August 2015, but said the country's investment grade status was safe for now.
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