A bout of volatility was witnessed as key benchmark indices pared gains after a sudden slide in afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty pared gains after both these indices hit their highest level in more than a week. The market breadth indicating the overall health of the market was strong. The Sensex was currently up 73.63 points or 0.26% at 28,188.19. Meanwhile, further reduction in diesel prices announced by state-run oil marketing companies on Friday, 31 July 2015, will reduce fuel price inflation. In the global commodities market, Brent crude oil prices edged lower on worries of oversupply as OPEC pumped at record levels in July, while weak China data stoked concerns about slower growth at the world's second largest oil consumer. Decline in global crude oil prices augur well for India.
Metal shares were in demand. Most capital goods shares edged higher. L&T edged lower in volatile trade after the company reported a sharp fall in net profit in Q1 June 2015 due to base effect.
Meanwhile, the outcome of a monthly survey today, 3 August 2015, showed that manufacturing business conditions across India improved further in July 2015.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 277.77 crore during the previous trading session on Friday, 31 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1021.34 crore on Friday, 31 July 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged lower in early trade as investors track steep losses in the Greek stock exchange and digest weak manufacturing data from China. Asian stocks edged lower amid signs of a deepening slowdown in China's economy, the world's second-largest economy. Energy stocks led decline in US market during the previous trading session on Friday, 31 July 2015, after two energy giants Exxon Mobil and Chevron reported decline in their earnings.
At 13:16 IST, the S&P BSE Sensex was up 73.63 points or 0.26% at 28,188.19. The index jumped 126.25 points at the day's high of 28,240.81 in afternoon trade, its highest level since 24 July 2015. The index fell 43.19 points at the day's low of 28,071.37 in early trade.
The CNX Nifty was up 2.30 points or 0.03% at 8,535.15. The index hit a high of 8,563.95 in intraday trade, its highest level since 24 July 2015. The index hit a low of 8,508.10 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,735 shares gained and 965 shares fell. A total of 106 shares were unchanged.
The BSE Mid-Cap index was up 65.45 points or 0.58% at 11,338.47. The BSE Small-Cap index was up 116.70 points or 0.99% at 11,947.50. Both these indices outperformed the Sensex.
Metal shares were in demand. National Aluminum Company (up 1.13%), Tata Steel (up 0.93%), Hindustan Zinc (up 0.83%), Hindalco Industries (up 0.81%), Steel Authority of India (up 0.53%), Bhushan Steel (up 0.51%), Hindustan Copper (up 0.41%), NMDC (up 0.39%) and JSW Steel (up 0.17%), edged higher. Vedanta (down 0.46%) and Jindal Steel & Power (down 1.52%) edged lower.
Most capital goods shares edged higher. AIA Engineering (up 5.25%), Jindal Saw (up 2.09%), Praj Industries (up 2.05%), BEML (up 2%), Bharat Electronics (up 1.79%), SKF India (up 1.54%), Thermax (up 1.43%), Siemens (up 0.73%), Crompton Greaves (up 0.63%), Lakshmi Machine Works (up 0.43%), Pipavav Defence and Offshore Engineering Company (up 0.33%) and Bharat Heavy Electricals (up 0.30%), edged higher. ABB India (down 0.5%), Havells India (down 0.66%), ALSTOM India (down 0.69%) and Alstom T&D India (down 1.15%) edged lower.
L&T was down 1.13% at Rs 1,769.30. The stock hit a high of Rs 1,773.40 and a low of Rs 1,710.20 so far during the day. L&T's consolidated net profit fell 37.3% to Rs 606.19 crore on 6.53% increase in total income to Rs 20509.53 crore in Q1 June 2015 over Q1 June 2014. The Q1 result was announced after market hours on Friday, 31 July 2015. L&T said that its net profit for the corresponding quarter of the previous year included divestment gains of Rs 1383 crore.
L&T's gross revenue rose 7% to Rs 20460 crore in Q1 June 2015 over Q1 June 2014. International revenue during the quarter at Rs 6609 crore constituted 32% of the total revenue. The company successfully won new orders worth Rs 26376 crore at the group level during the quarter ended 30 June 2015. International orders during the quarter at Rs 8110 crore constituted 31% of the total order inflow. Major orders during the quarter were secured by infrastructure and hydrocarbon segments. The consolidated order book of the group stood at Rs 2.38 lakh crore as on 30 June 2015, higher by 22% on a year-on-year basis. International order book constituted 26% of the total order book.
L&T said in a statement that the business environment stays challenging in the short term while the prospects in urban infra, transportation infra, power transmission, water, renewable energy and defence manufacturing remain promising in the medium term. The management is hopeful of the company benefitting from the growth opportunities as they emerge. The domestic infrastructure sector awaits the translation of various policy and budgetary initiatives into a definitive capital expenditure programme. While visibility of outlay by public sector/government undertakings has improved, private sector investment in the industrial sector is constrained by weak demand, low commodity prices and under utilisation of the existing capacities, L&T said.
Separately, L&T after trading hours on Friday, 31 July 2015, announced that the company intends to participate in the offer for sale of equity shares of its subsidiary L&T Infotech. L&T proposes to sell up to 15% of the equity shares held in L&T Infotech through the offer for sale. L&T Infotech is a global IT services and solutions provider.
Suzlon Energy surged 14.61% to Rs 25.10 after the company reported consolidated net profit of Rs 1047.41 crore in Q1 June 2015 compared with net loss of Rs 750.74 crore in Q1 June 2014. Total income dropped 43.57% to Rs 2643.08 crore in Q1 June 2015 over Q1 June 2014. The Q1 result was announced after market hours on Friday, 31 July 2015.
Punj Lloyd jumped 7.41% to Rs 29 after the company said it won a Rs 477 crore Ennore LNG tankage order from Mitsubishi Heavy Industries, Japan. The announcement was made during trading hours today, 3 August 2015.
Meanwhile, further reduction in diesel prices announced by state-run oil marketing companies on Friday, 31 July 2015, will reduce fuel price inflation. Diesel is a key transportation fuel. Indian Oil Corporation (IOCL) after trading hours on Friday, 31 July 2015, announced reduction in petrol and diesel prices with effect from 1 August 2015. The retail selling price of diesel was reduced by Rs 3.60 per litre at Delhi (including state levies) with corresponding price revision in other states. With the latest revision, the price of diesel in Delhi has become Rs 46.12 per litre. The retail selling price of petrol was reduced by Rs 2.43 per litre at Delhi (including state levies) with corresponding price revision in other states. With the latest revision, the price of petrol in Delhi has become Rs 64.47 per litre.
Meanwhile, in the global commodities markets, Brent crude oil futures edged lower on worries of oversupply as the Organization of the Petroleum Exporting Countries (OPEC) pumped at record levels in July, while weak Chinese data stoked concerns about slower growth at the world's second largest oil consumer. Brent for September settlement was currently off 59 cents at $51.62 a barrel. The contract had fallen $1.1 a barrel or 2.06% to settle at $52.21 a barrel during the previous trading session.
India imports about 80% of its crude requirements and a decline in crude eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure.
Meanwhile, the outcome of a monthly survey today, 3 August 2015, showed that manufacturing business conditions across India improved further in July 2015. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) printed a six-month high of 52.7 in July 2015, up from 51.3 in June 2015. Underpinning the rise in production levels was a sharper increase in new business inflows. Growth of new orders gathered pace across the three broad areas of the manufacturing economy. Anecdotal evidence highlighted stronger demand from both domestic and foreign clients. Reflecting the rebound in new orders, Indian manufacturers raised their buying levels in July. The rate of expansion was marked and faster than in June.
Despite the uptick in growth, Indian manufacturers continued to cut workforce numbers in July. Nonetheless, the rate of job shedding was only marginal as around 96% of panellists reported no change in employment from the levels recorded in the prior month. Purchase prices for Indian manufacturers rose further in July. Despite quickening since June, the rate of inflation was only marginal and well below the series long-run trend. Selling prices were unchanged on average, with companies highlighting efforts to secure new business.
Meanwhile, the outcome of Reserve Bank of India's (RBI)'s third bi-monthly monetary policy review is due at 11:00 IST tomorrow, 4 August 2015. The RBI had cut its benchmark lending rate viz. the repo rate by 25 basis points to 7.25% after a monetary policy review on 2 June 2015.
Meanwhile, India's weather office, the India Meteorological Department (IMD), said in a daily report issued yesterday, 2 August 2015, said that the Southwest Monsoon was vigorous over Jharkhand and was active over Gangetic West Bengal during past 24 hours until 8:30 IST. For the country as a whole, cumulative rainfall during this year's monsoon season was 6% below the Long Period Average (LPA) until 2 August 2015. Region wise, the rainfall was 21% below the LPA in South Peninsula, 7% below the LPA in East & Northeast India, 6% below the LPA in Central India and 9% above the LPA in Northwest India until 2 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.
In overseas markets, European stocks edged lower in early trade today, 3 August 2015, as investors track steep losses in the Greek stock exchange and digest weak manufacturing data from China. Key benchmark indices in UK, France and Germany were off 0.04% to 0.10%.
In Greece, the Athex Composite reopened with 23% loss at 615.12. Trading on the Greece stock market resumed today, 3 August 2015, after a five-week shutdown. Trading on the Greece stock market was suspended on 29 June 2015 after Greek Prime Minister Alexis Tsipras called a referendum on the country's bailout terms.
Asian stocks edged lower today, 3 August 2015, amid signs of a deepening slowdown in China's economy, the world's second-largest economy. Key benchmark indices in Indonesia, Singapore, Taiwan, Japan and South Korea fell by 0.02% to 1.63%.
Weak manufacturing data dragged Chinese stocks. In mainland China, the Shanghai Composite dropped 1.11%. In Hong Kong, the Hang Seng index fell 1.31%.
A gauge of China's factory activity slipped in July, pointing to further sluggishness in the key manufacturing sector of the world's second-largest economy. China's official manufacturing purchasing managers index slipped to 50 in July from 50.2 in June, the National Bureau of Statistics said Saturday, 1 August 2015. A reading of 50 is right at the cutoff point between expansion and contraction compared with the previous month.
The official gauge was still better than a competing measure compiled by research house Markit and Chinese media firm Caixin. Their preliminary PMI estimate was below the 50 level at 48.2--the lowest reading in 15 months.
Energy stocks led decline in US market during the previous trading session on Friday, 31 July 2015, after two energy giants Exxon Mobil and Chevron reported decline in their earnings. Investors also were debating whether data showing weak wage growth could prompt the Federal Reserve to think twice about raising interest rates in September. The wages and benefits that companies, governments and nonprofit institutions pay their employees rose a record-low 0.2% in the second quarter, according to the employment cost index released by the Labor Department. Separately, Chicago PMI rose in July to the highest level since January, suggesting a pickup in business during the summer.
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