Mining, metal and banking stocks led losses for key benchmark indices, with the barometer index, the S&P BSE Sensex, falling below the psychological 28,000 mark. The Sensex was provisionally off 216.60 points or 0.77% at 27,885.12. The market breadth indicating the overall health of the market was weak. The BSE Small-Cap index was off 135.95 points or 1.13%. The decline in this index was higher than the Sensex's decline in percentage terms. The market sentiment was hit adversely after China's central bank devalued the nation's currency. In overseas markets, Asian and European stocks fell, with investors assessing China's unexpected devaluation of the yuan.
State Bank of India (SBI) dropped in volatile trade after the bank's ratio of net non-performing assets to net advances increased to 2.24% as on 30 June 2015 from 2.12% as on 31 March 2015. Auto components major Bosch rose in volatile trade after declaring good Q1 result. Shares of steel makers fell after China's central bank moved to devalue its tightly controlled currency, stoking fears of Chinese exports becoming cheaper.
Earlier, the Sensex hit 1-1/2-week low and 50-unit CNX Nifty hit its lowest level in almost two-weeks as these two key benchmark indices extended intraday losses in mid-afternoon trade.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 14.43 crore yesterday, 10 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 50.05 crore yesterday, 10 August 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks fell, with investors assessing China's unexpected devaluation of the yuan. Asian stocks edged lower after China's central bank moved to devalue its tightly controlled currency. US stocks surged yesterday, 10 August 2015, buoyed by remarks from one Federal Reserve official suggesting a September interest-rate hike may not be a done deal, as well as from a bounce-back in Chinese equities.
As per provisional figures, the S&P BSE Sensex was down 216.60 points or 0.77% at 27,885.12. The index fell 275.89 points at the day's low of 27,825.83 in mid-afternoon trade, its lowest level since 31 July 2015. The index gained 103.40 points at the day's high of 28,205.12 at the onset of the trading session.
The Nifty was down 58.95 points or 0.69% at 8,466.65, as per provisional figures. The index hit a low of 8,441.30 in intraday trade, its lowest level since 30 July 2015. The index hit a high of 8,556.25 in intraday trade.
The market breadth indicating the overall health of the market was weak. On BSE, 1,875 shares declined and 1,013 shares rose. A total of 94 shares were unchanged.
The BSE Mid-Cap index was down 52.85 points or 0.46% at 11,502.55. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index was down 135.95 points or 1.13% at 11,919.04. The decline in this index was higher than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 3734 crore, higher than turnover of Rs 3104.69 crore registered during the previous trading session.
State Bank of India (SBI) slumped 5.16% to Rs 268.50 after the bank's ratio of net non-performing assets to net advances increased to 2.24% as on 30 June 2015 from 2.12% as on 31 March 2015. The stock was volatile. The stock high of Rs 289.50 and low of Rs 268.25. SBI's net profit rose 10.25% to Rs 3692.43 crore on 9.79% growth in total income to Rs 44730.87 crore in Q1 June 2015 over Q1 June 2014. SBI's provisions and contingencies rose 14.38% to Rs 3999.73 crore in Q1 June 2015 over Q1 June 2014. The provisions and contingencies include provisions for non-performing assets. SBI's provisions for non-performing assets dropped 13.95% to Rs 3358.58 crore in Q1 June 2015 over Q1 June 2014.
The bank's ratio of net non-performing assets (NPA) to net advances stood at 2.24% as on 30 June 2015, higher than 2.12% as on 31 March 2015 and lower than 2.66% as on 30 June 2014.
On absolute basis, gross NPA declined to Rs 56420.77 crore as on 30 June 2015 as against Rs 56725.34 crore as on 31 March 2015 and Rs 60434.24 crore as on 30 June 2014. The ratio of gross NPA to gross advances stood at 4.29% as on 30 June 2015, higher than 4.25% as on 31 March 2015 and lower than 4.9% as on 30 June 2014.
The provision coverage ratio as on 30 June 2015 stood at 69.49%.
Bosch rose 2.16% to Rs 26,564.95. The stock was volatile. The stock hit high of Rs 26,701 and low of Rs 25,401. Bosch reported 12.08% rise in net profit to Rs 343.74 crore on 8.3% growth in total income to Rs 2664.52 crore in Q1 June 2015 over Q1 June 2014. The Q1 result was announced during market hours today, 11 August 2015.
Shares of steel makers fell after China's central bank moved to devalue its tightly controlled currency, stoking fears of Chinese exports becoming cheaper. Steel Authority of India (down 3.73%), JSW Steel (down 2.22%), Jindal Steel & Power (down 0.91%) and Bhushan Steel (down 3.3%) edged lower.
A devalued currency will make Chinese exports becoming cheaper. Dumping of cheaper steel products by China will hurt the Indian steel industry. The devaluation will also impact India's exports to China as a weaker yuan makes resources more expensive to Chinese buyers.
Tata Steel declined 5.42% ahead of its Q1 results today, 11 August 2015.
Shares of other metal stocks also declined. Hindustan Zinc (down 1.43%), Vedanta (down 2.97%) and Hindalco Industries (down 4.45%), dropped.
NMDC declined 1.15% ahead of its Q1 results today, 11 August 2015.
Meanwhile, it remains to be seen whether the government is able to get the goods and services tax (GST) bill passed in Parliament during the monsoon session. The government today, 11 August 2015, reportedly introduced the GST bill in the Rajya Sabha. However, the Rajya Sabha was adjourned for the day shortly after the introduction of the GST bill amid protests by the opposition Congress party. The GST bill must be passed during the monsoon session of parliament if the deadline of 1 April 2016 for the introduction of nationwide GST is to be met. If the GST bill gets passed in the Rajya Sabha during the ongoing monsoon session, the government will have to again go to the Lok Sabha for getting the Lower House's approval for the proposed amendments. The Constitutional Amendment Bill for GST needs the support of two-thirds of the members in both houses. Once both houses of Parliament pass the Constitution Amendment Bill, the bill has to be sent to the states for ratification. At least 50% of the states have to ratify the bill.
GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.
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, 10 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 10 August 2015. Region wise, the rainfall was 22% below the LPA in South Peninsula, 11% below the LPA in East & Northeast India, 8% below the LPA in Central India and 2% above the LPA in Northwest India until 10 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 tomorrow, 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 edged lower today, 11 August 2015, after China devalued its yuan currency. Key benchmark indices in UK, France and Germany were off 0.76% to 1.37%.
Shares rose in Greece after the cash-strapped country reached terms on reforms needed to unlock fresh financial aid. The Athex Composite Share Price Index was up 2.45%.
Chinese stocks edged lower in volatile trade today, 11 August 2015, after China's central bank devalued its tightly controlled currency. In mainland China, the Shanghai Composite lost 0.01%. In Hong Kong, the Hang Seng index lost 0.09%. China's central bank today, 11 August 2015, lowered the value of the yuan by changing the way in which it calculates the yuan's daily midpoint against the US dollar. The latest move from the Chinese central bank resulted in the yuan weakening by 1.9% at 6.2298. The devaluation of the currency comes after trade data at the weekend showed Chinese exports sank 8.3% in July.
Other Asian markets were in red. Key indices in South Korea, Taiwan, Indonesia, Japan and Singapore were off 0.42% to 2.66%.
US stocks surged yesterday, 10 August 2015, buoyed by remarks from one Federal Reserve official suggesting a September interest-rate hike may not be a done deal, as well as from a bounce-back in Chinese equities. Federal Reserve Vice Chairman Stanley Fischer reportedly said in an interview to a television channel yesterday, 10 August 2015, that he doesn't expect the first interest-rate hike by the US central bank in more than nine years to occur until after inflation returns closer to the Fed's target of around 2%. The inflation rate has dipped close to zero in recent months and hasn't been above 2% since April 2012.
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