Shares of private sector banks, telecom companies and auto firms led losses as key equity benchmark indices edged lower on weakness in global stocks. Nevertheless, the benchmark indices staged a recovery from lower level after a sharp intraday slide. The barometer index, the S&P BSE Sensex, was provisionally off 284.45 points or 1.03% to 27,323.37. The market breadth indicating the overall health of the market was weak. In overseas markets, Asian stocks tumbled as weak Chinese manufacturing data added to growing concerns over China's economic slowdown.
Earlier, the Sensex hit its lowest level in more than nine weeks and the 50-unit CNX Nifty hit 7-1/2-week low in early trade as Asian stocks tumbled after weak Chinese manufacturing data.
Key indices edged lower for the second straight trading session today, 21 August 2015.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 1007.26 crore yesterday, 20 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 567.87 crore yesterday, 20 August 2015, as per provisional data.
In overseas markets, European stocks edged lower as weak Chinese manufacturing data triggered sell-off in Asian stocks. Chinese stocks led losses for Asian markets after a flash purchasing managers' index showed Chinese manufacturing activity shrank for a sixth straight month in August. US stocks suffered their worst selloff in 2015 yesterday, 20 August 2015, as markets were buffeted by worries about a slowdown in global growth.
As per provisional figures, the S&P BSE Sensex was down 284.45 points or 1.03% to 27,323.37. The index fell 476.38 points at the day's low of 27,131.44 in early trade, its lowest level since 18 June 2015. The index fell 165 points at the day's high of 27,442.82 at the onset of the trading session.
The CNX Nifty was down 72.80 points or 0.87% at 8,299.95, as per provisional figures. The index hit a low of 8,225.05 in intraday trade, its lowest level since 29 June 2015. The index hit a high of 8,322.20 in intraday trade.
The BSE Mid-Cap index was down 101.23 points or 0.89% at 11,216.65. The BSE Small-Cap index was down 70.37 points or 0.6% at 11,610.44. The decline in both these indices was lower than Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was weak. On BSE, 1,795 shares declined and 1,013 shares rose. A total of 97 shares were unchanged.
The total turnover on BSE amounted to Rs 3451 crore, higher than turnover of Rs 3354.59 crore registered during the previous trading session.
Realty stocks edged lower. Godrej Properties (down 6.58%), Oberoi Realty (down 5.16%), DLF (down 5.95%), Sobha (down 2.62%), Prestige Estates Projects (down 2.1%) and Housing Development & Infrastructure (down 1.97%), Unitech (down 0.73%) and Indiabulls Real Estate (down 1.17%) edged lower. D B Realty (up 4.66%) edged higher.
Shares of BPCL edged lower on reports that a foreign brokerage has maintained underperform rating on the stock. The stock declined 0.86%. The foreign brokerage has reportedly pointed out in a research report that weak global crude oil prices may force write-off in value of BPCL's deepwater assets in Brazil and Mozambique. The brokerage also is worried about BPCL's recent market share loss in diesel, possibly to private players. The research report also notes that there is potential of large inventory loss arising from fall in Brent crude price in Q2 September 2015 so far. The brokerage has also reportedly pointed out decline in all key refining product spreads as another near term concern for the stock.
Auto stocks edged lower. Hero MotoCorp (down 3.03%), Bajaj Auto (down 3.9%), Eicher Motors (down 2.79%), Maruti Suzuki India (down 1.33%), TVS Motor Company (down 1.64%), Mahindra & Mahindra (down 1.16%) and Ashok Leyland (down 0.68%) edged lower.
Tata Motors edged lower after the company announced that most of the Jaguar Land Rover vehicles recently shipped to Tianjin in China may have been damaged due to explosions at the Tianjin port. The stock lost 2.81%. Tata Motors' British luxury car unit Jaguar Land Rover (JLR) in a press release issued yesterday, 20 August 2015, announced that at the time of explosions in Tianjin in China, approximately 5,800 vehicles of JLR that had recently been shipped to China were stored at various locations at Tianjin port. JLR believes that many of these vehicles may have been damaged. However, access to facilities near the site of the explosion remains restricted and therefore it is presently unable to quantify the number of units affected due to the explosion, JLR said. JLR said it will continue to monitor the situation and work to minimise the impact on its customers and the business. Tata Motors made the announcement during market hours today, 21 August 2015.
Meanwhile, in the global commodities markets, Brent crude oil futures edged lower after weak Chinese manufacturing data. Brent for October settlement was currently off 32 cents at $46.30 a barrel. The contract had declined 54 cents or 1.14% to settle at $46.62 a barrel during the previous trading session.
India imports about 80% of its crude requirements and a decline in crude prices eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. State-run oil marketing companies have been cutting petrol and diesel prices on the back of falling international prices. Lower diesel prices will reduce transportation costs which in turn will reduce fuel price inflation. Diesel is a key transportation fuel.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 65.89, compared with close of 65.55 during the previous trading session.
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, 20 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 20 August 2015. Region wise, the rainfall was 20% below the LPA in South Peninsula, 10% below the LPA in Central India, 7% below the LPA in East & Northeast India and 1% below the LPA in Northwest India until 20 August 2015.
Separately, the IMD in its weekly report said that as per its extended range forecast till 8 September 2015, above normal rainfall activity is likely over northeast and adjoining east India on many days till beginning of September. Normal rainfall activity likely over south peninsula during the period from 20 to 24 August and 4 to 8 September 2015, the IMD said. Below normal rainfall activity is likely over plains of northwest and central India, the IMD said.
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 markets, European stocks edged lower today, 21 August 2015, as weak Chinese manufacturing data triggered sell-off in Asian stocks. Key indices in France, Germany and UK were off 0.49% to 1.01%.
In Greece, Prime Minister Alexis Tsipras yesterday, 20 August 2015, resigned as the debt-troubled country's prime minister and called for a snap national election to be held within a month. In a televised address, Tsipras said he is seeking a "clear mandate for a strong government". The move is seen as a bid to get popular backing for the new Greek bailout deal, which imposes tough new austerity measures. The Greek government repaid 3.4 billion euros ($3.8 billion) to the European Central Bank using fresh eurozone funds yesterday, 20 August 2015.
Markit flash Eurozone PMI ticked higher in August as growth accelerated in Germany and outside of the big-two nations, latest data showed today, 21 August 2015. Flash Eurozone PMI Composite Index edged higher to 54.1 in August from 53.9 last month.
Markit Economics said today, 21 August 2015, that the latest flash France PMI data signalled that private sector output continued to rise in August. However, the rate of growth was modest and the slowest in four months. This was indicated by the seasonally adjusted Markit Flash France Composite Output Index, which was at 51.3, down slightly from 51.5 in July.
German consumer sentiment is set to weaken in September despite improved clarity about Greece's future, market research group GfK said in its monthly survey released today, 21 August 2015. The forward-looking GfK consumer sentiment index is expected to weaken to 9.9 points in September from 10.1 points in August.
Chinese stocks led losses for Asian markets today, 21 August 2015, after a flash purchasing managers' index showed Chinese manufacturing activity shrank for a sixth straight month in August. In mainland China, the Shanghai Composite was off 4.21%. In Hong Kong, the Hang Seng was off 1.53%.
The Caixin/Markit flash purchasing managers' index today, 21 August 2015, showed Chinese manufacturing activity shrank for a sixth straight month in August, falling to 47.1 from July's final reading of 47.8 and remaining below the threshold of 50 that separates expansion from contraction. August's reading was the lowest since March 2009.
In other Asian markets, key indices in Japan, Taiwan, South Korea, Singapore and Indonesia were off 1.92% to 3.02%.
US stocks suffered their worst selloff in 2015 yesterday, 20 August 2015, as markets were buffeted by worries about a slowdown in global growth. The number of Americans filing new applications for unemployment benefits unexpectedly rose last week. Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 277,000 for the week ended 15 August 2015, the Labor Department said yesterday, 20 August 2015.
US existing home sales climbed in July to their prerecession pace. Existing-home sales rose 2% last month from June to a seasonally adjusted rate of 5.59 million, the National Association of Realtors said yesterday, 20 August 2015.
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