Key benchmark indices traded off intraday low on the back of gains for two index heavyweights HDFC Bank and HDFC. At 14:15 IST, the barometer index, the S&P BSE Sensex, was down 72.19 points or 0.26% at 27,869.92. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty was currently down 13.55 points or 0.16% at 8,551.45. Index heavyweight and IT major Infosys tumbled after the company reduced revenue growth guidance in constant currency terms at the time of announcing its Q1 June 2016 results during trading hours. The Sensex failed to hold the psychologically important 28,000 mark after moving past that mark in early trade.
The Sensex dropped 206.24 points or 0.74% at the day's low of 27,735.87 in early afternoon trade, its lowest level since 12 July 2016. The barometer index rose 106.59 points or 0.38% at the day's high of 28,048.70 in early trade, its highest level since 17 August 2015. The Nifty fell 54.95 points or 0.64% at the day's low of 8,510.05 in early afternoon trade. The index gained 29.80 points or 0.35% at the day's high of 8,594.80 in early trade, its highest level since 10 August 2015.
The market breadth indicating the overall health of the market was negative. On BSE, 1,523 shares fell and 1,035 shares rose. A total of 171 shares were unchanged. The BSE Mid-Cap index was currently up 0.44%, outperforming the Sensex. The BSE Small-Cap index was currently off 0.38%. The fall in this index was higher than the Sensex's decline in percentage terms.
In overseas stock markets, European stocks edged lower weighed by a terror attack carried out by using a heavy truck in the southern French city of Nice that killed at least 80 people late yesterday, 14 July 2016. In the UK, the Bank of England (BOE) left key rates unchanged at 0.5% after a monetary policy review yesterday, 14 July 2016. The Monetary Policy Committee (MPC) voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at 375 billion. BOE said in a statement that the MPC is committed to taking whatever action is needed to support growth and to return inflation to the target over an appropriate horizon. To that end, most members of the committee expect monetary policy to be loosened at the next MPC meeting in August. Committee members made initial assessments of the impact of UK's vote to leave the European Union on demand, supply and the exchange rate. According to the initial assessment, economic activity is likely to weaken in the near term. The precise size and nature of any stimulatory measures will be determined during the August forecast and Inflation Report round.
Asian shares rose after Wall Street struck another record high overnight. Chinese stocks eked out small gains after the release of a slew of economic reports. In mainland China, the Shanghai Composite index closed 0.01% higher. In Hong Kong, the Hang Seng index closed 0.46% higher. China's economy grew 6.7% in the second quarter from a year earlier, steady from the first quarter and slightly better than expected as the government stepped up efforts to stabilise growth in the world's second-largest economy. The National Bureau of Statistics also said today, 15 July 2016, that industrial output rose 6.2% in June from a year earlier, accelerating from 6% growth in May, while fixed-asset investment climbed 9% year on year for the January-June period, compared with an increase of 9.6% in the year's first five months. Retail sales grew 10.6% in June from a year earlier, accelerating from a 10% increase in May. The industrial-production and retail figures were better than expected while the investment figure was below expectation.
US stocks extended their run into the record books as the Dow Jones Industrial Average and the S&P 500 notched record closing highs yesterday, 14 July 2016. Stronger-than-expected results from large financial institutions, including J.P. Morgan Chase, as well as upbeat economic powered the climb.
Bank stocks witnessed a mixed trend. Among private bank stocks, Axis Bank (up 1.53%), IndusInd Bank (up 1.39%) and Yes Bank (up 1.23%) rose. ICICI Bank (down 0.71%) and Kotak Mahindra Bank (down 0.57%) fell.
Index heavyweight HDFC Bank rose 1.81% at Rs 1,222. The stock hit a high of Rs 1,222.90 in intraday trade so far, which is record high for the counter. The stock hit a low of Rs 1,195.25 so far during the day.
Among PSU bank stocks, Vijaya Bank (up 4.8%), Dena Bank (up 1.33%), State Bank of India (SBI) (up 0.63%), Punjab National Bank (up 2.79%), Bank of Baroda (up 1.59%), Canara Bank (up 0.43%), Andhra Bank (up 0.72%), and Union Bank of India (up 0.78%) rose. IDBI Bank (down 0.92%) and Bank of India (down 0.09%) fell.
Capital goods stocks edged lower. Punj Lloyd (down 0.91%), Bharat Electronics (down 0.89%), Crompton Greaves (down 0.98%), Siemens (down 0.06%) and Thermax (down 0.82%) fell. ABB India (up 0.9%) and BEML (up 0.88%) rose.
Engineering and construction major Larsen & Toubro rose 1.68% to Rs 1,590.10 after the company's announcement that it has decided to participate in the offer for sale of equity shares by way of initial public offering (IPO) by L&T Technology Services. The company proposes to sell up to 15% of the equity shares held in L&T Technology Services through the IPO. L&T Technology Services, a wholly-owned subsidiary of L&T, is a pure play global engineering, research and development services company. The announcement was made during market hours today, 15 July 2016.
Bharat Heavy Electricals (Bhel) dropped 0.52%. The company during market hours today, 15 July 2016, announced that it has successfully commissioned another 250 megawatts (MW) thermal unit based on eco-friendly circulating fluidized bed combustion (CFBC) technology, using low quality coal (lignite) as the primary fuel. The lignite based thermal unit has been commissioned at Bhavnagar district of Gujarat.
Adani Ports and Special Economic Zone rose 2.08% after India Ratings & Research has assigned final 'IND AA+' rating with Stable Outlook for the NCDs of Rs 252 crore. Earlier on 28 June 2016, India Ratings & Research had assigned "Provisional IND AA+ rating with a stable outlook for proposed Non-Convertible Debentures (NCDs) of Rs 500 crore to the company. The announcement was made during market hours today, 15 July 2016.
Tata Steel was up 4.05% to Rs 373.75, with the stock extending its recent winning streak. Recent rally in the stock materialized after the company's announcement that it has entered into discussions with strategic players in the steel industry, including Thyssenkrupp AG for a strategic collaboration for its European businesses. The decision had been taken as an alternative to the ongoing process for the divestment of loss making Tata Steel UK, the company said.
Meanwhile, T.V. Narendran, managing director of Tata Steel India and South East Asia was recently quoted by the media as saying that the company has plans for further expansion of its greenfield steel project in Kalinganagar in Odisha. Narendran reportedly said that for next 3 years Tata Steel will focus on ramping up Kalinganagar facility and targets a production capacity of 1 million tonne per annum (MTPA) out of this facility.
IT major and index heavyweight Infosys slumped after the company trimmed revenue growth guidance for the year ending 31 March 2017 (FY 2017) at the time of announcing its Q1 June 2016 results during trading hours. The stock was off 8.25% at Rs 1,078.90. The stock hit high of Rs 1,195 and low of Rs 1,058.30 so far during the day. In constant currency terms, the company has forecast 10.5%-12% growth in revenue for FY 2017. At the time of announcement of Q4 March 2016 and FY 2016 results, the company had forecast 11.5%-13.5% growth in revenue for FY 2017 in constant currency terms.
On a consolidated basis, Infosys' net profit fell 4.5% to Rs 3436 crore on 1.4% growth in revenue to Rs 16782 crore in Q1 June 2016 over Q4 March 2016. The results are as per International Financial Reporting Standards (IFRS). Infosys CEO Vishal Sikka said in a statement that the company witnessed unanticipated headwinds in discretionary spending in consulting services and package implementations as well as slower project ramp-ups in large deals, resulting in a lower than expected growth in Q1 June 2016.
Meanwhile, India Meteorological Department (IMD) said in a weekly report issued after trading hours yesterday, 14 July 2016, that the southwest monsoon has covered the entire country. For the country as a whole, the cumulative rainfall during this year's monsoon was 2% above the long period average (LPA) until 14 July 2016. Rainfall was 22% above LPA in Central India and 8% above LPA in South Peninsula. It was 1% below LPA in Northwest India and 24% below LPA in East & Northeast India until 14 July 2016. The IMD said in its extended range forecast upto 30 July 2016, that it expects above normal rainfall activity likely over Western Himalayan Region & Indo-Gangetic plains till 20 July and over northeastern states till 30 July. The weather office expects near normal rainfall activity over Peninsular India till 30 July. The IMD expects subdued rainfall activity over central and West India from 16 to 30 July.
The IMD has forecast rains to be above normal in July and August 2016 for the country as a whole. The quantum of the rainfall and its spatial and temporal distribution are critical for the country's agriculture. Around 70% of the country's farmlands are rain-fed.
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