Index heavyweights HDFC, ITC, L&T and Reliance Industries (RIL) led losses for key benchmark indices on the last trading session of the week today, 26 June 2015. Key indices dropped as uncertainty surrounding a possible default and exit by debt-laden Greece from the eurozone pulled European stocks lower. The barometer index, the S&P BSE Sensex, fell 84.13 points or 0.3% to settle at 27,811.84. The losses for the Sensex were higher in percentage terms than those for the 50-unit CNX Nifty. The Nifty dropped 16.90 points or 0.2% to settle at 8,381.10. The market breadth indicating the overall health of the market was negative.
Bank stocks edged lower after the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report (FSR) June 2015 published yesterday, 25 June 2015, that while risks to India's banking sector, as reflected by the Banking Stability Indicator and Map, have moderated marginally since September 2014, concerns remain over the continued weakness in asset quality indicated by the rising trend in stressed advances ratio of scheduled commercial banks (SCBs), especially of public sector banks (PSBs).
IT stocks edged higher after business consulting firm Accenture yesterday, 25 June 2015, raised its full-year revenue as well as earnings per share (EPS) forecast at the time of announcing its Q3 May 2015 results after trading hours in India yesterday, 25 June 2015. GAIL (India) dropped after a foreign brokerage reportedly maintained underperform rating on the stock.
Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan has reportedly expressed concern that the world may be slipping into the kind of problems of the depression of the 1930s and an international consensus was needed to be built over time. Speaking at a London Business School (LBS) conference yesterday, 25 June 2015, Rajan reportedly said that the situation is different in India where RBI still needs to bring down lending rates to spur investments.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 328.20 crore from the secondary equity market yesterday, 25 June 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) sold shares worth a net Rs 8.45 crore yesterday, 25 June 2015, as per provisional data released by the stock exchanges.
In overseas stock markets, European stocks dropped after days of talks failed to yield a breakthrough in the Greece debt crisis. Earlier during the global day, stocks tumbled in mainland China amid disappointment the government hasn't taken stronger steps to stimulate a slowing economy and worries that startup stocks are still too expensive. US stocks edged lower yesterday, 25 June 2015, as lack of resolution between Greece and its creditors weighed on investor sentiment.
The S&P BSE Sensex fell 84.13 points or 0.3% to settle at 27,811.84, its lowest closing level since 24 June 2015. The index fell 220.81 points at the day's low of 27,675.16 in afternoon trade. The index gained 25.89 points at the day's high of 27,921.86 in early trade.
The CNX Nifty dropped 16.90 points or 0.2% to settle at 8,381.10, its lowest closing level since 24 June 2015. The index hit a low of 8,339.70 in intraday trade. The index hit a high of 8,408.55 in intraday trade.
The BSE Mid-Cap index dropped 3.64 points or 0.03% to settle at 10,686.11. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index rose 15.19 points or 0.14% to settle at 11,124.49, outperforming the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,489 shares fell and 1,185 shares rose. A total of 121 shares were unchanged.
The total turnover on BSE amounted to Rs 3040 crore, higher than turnover of Rs 2555.87 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Bankex index (down 0.74%), BSE Capital Goods index (down 1.11%), BSE Metal index (down 0.91%), BSE Oil & Gas index (down 0.84%) and BSE Power index (down 0.6%) underperformed the Sensex. The S&P BSE FMCG index (down 0.26%), BSE Healthcare index (up 0.19%), BSE IT index (up 1.36%), BSE Auto index (up 0.42%), BSE Consumer Durables index (up 1.6%), BSE Realty index (up 0.94%) and BSE Teck index (up 0.73%) outperformed the Sensex.
Index heavyweight and housing finance major HDFC fell 1.57% at Rs 1,288.30. The stock hit a high of Rs 1309 and a low of Rs 1,276.90 in intraday trade.
Another index heavyweight and cigarette major ITC dropped 1.31% at Rs 308.50. The stock hit a high of Rs 313 and a low of Rs 307.35 in intraday trade.
L&T fell 1.49% at Rs 1,779.95. The The stock hit a high of Rs 1,804.85 and a low of Rs 1,775.25 in intraday trade.
Index heavyweight Reliance Industries (RIL) dropped 0.51% at Rs 999.55. The stock hit a high of Rs 1,013.80 and a low of Rs 995.50 in intraday trade.
Bank stocks edged lower after the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report (FSR) June 2015 published yesterday, 25 June 2015, that while risks to India's banking sector, as reflected by the Banking Stability Indicator and Map, have moderated marginally since September 2014, concerns remain over the continued weakness in asset quality indicated by the rising trend in stressed advances ratio of scheduled commercial banks (SCBs), especially of public sector banks (PSBs).
Among public sector banks, Oriental Bank of Commerce (down 4.33%), Bank of India (down 3.2%), Indian Overseas Bank (down 2.19%), Punjab National Bank (down 1.56%), IDBI Bank (down 1.19%), Union Bank of India (down 0.97%), United Bank of India (down 0.41%), Corporation Bank (down 0.68%) and Bank of Baroda (down 0.34%) edged lower. State Bank of India (up 0.02%) and Central Bank of India (up 1.01%) edged higher.
Among private sector banks, Kotak Mahindra Bank (down 1.56%), ICICI Bank (down 1.35%), Yes Bank (down 0.93%), Axis Bank (down 0.79%) and HDFC Bank (down 0.23%) edged lower.
The RBI said in its FSR that macro stress tests suggest that current deterioration in the asset quality of SCBs may continue for few more quarters and PSBs may have to bolster their provisions for credit risk from present levels, to meet the 'expected losses' if macroeconomic environment were to deteriorate under assumed stress scenarios. However, capital to risk weighted assets ratio (CRAR) of SCBs, at system level, was observed to remain above the regulatory minimum even under adverse macro-economic conditions assumed in these tests.
The report notes that while the regulatory move towards encouraging greater market access and market discipline will help the development of domestic financial markets, the banking sector, especially the PSBs will be expected to continue to shoulder the needs of the accelerating growth in the economy. In this context, the policy initiatives for improving the governance and management processes at public sector banks become significant.
ICICI Bank fell 1.35% at Rs 311.25. The stock hit a high of Rs 315.40 and a low of Rs 307.60 in intraday trade. ICICI Bank after market hours yesterday, 25 June 2015, announced a reduction of 5 basis points (bps) in its base rate to 9.70% per annum (pa) from 9.75% with effect from 26 June 2015. With effect from 1 July 2010, interest rates on new loans and advances, including consumer loans, are determined with reference to the bank's base rate, ICICI Bank said.
IndusInd Bank rose 0.2% at Rs 866.50. The stock hit a high of Rs 880 and a low of Rs 851.10 in intraday trade. IndusInd Bank after market hours yesterday, 25 June 2015, announced that the Finance Committee of the bank yesterday, 25 June 2015, inter-alia passed the resolution authorising the opening of the QIP yesterday, 25 June 2015. The floor price for the QIP has been fixed at Rs 821.54 per share. IndusInd Bank said that the bank may offer a discount of up to 5% on the floor price.
IT stocks edged higher after business consulting firm Accenture yesterday, 25 June 2015, raised its full-year revenue as well as earnings per share (EPS) forecast at the time of announcing its Q3 May 2015 results after trading hours in India yesterday, 25 June 2015. HCL Technologies (up 3.28%), Infosys (up 1.51%), Wipro (up 0.9%), MindTree (up 0.78%), CMC (up 1.32%) and TCS (up 1.66%) edged higher. Oracle Financial Services Software (down 0.33%) and Tech Mahindra (down 1.53%) edged lower.
Accenture reported net revenue of $7.8 billion for Q3 May 2015, an increase of 0.4% in US dollar terms and 10% in local currency over the same period last year. Net profit for the quarter was $850 million, compared with $882 million for the third quarter last year. Excluding the after-tax impact of the pension settlement charge, net profit for the third quarter of fiscal 2015 was $889 million.
Accenture expects net revenue to be in the range of $7.45 billion to $7.70 billion for Q4 August 2015. This range assumes a foreign-exchange impact of negative 10% compared with the fourth quarter of fiscal 2014. For fiscal 2015 (year ended 31 August 2015), the company now expects net revenue growth in local currency to be in the range of 9% to 10%, compared with 8% to 10% previously. Accenture's business outlook for the full 2015 fiscal year now assumes a foreign-exchange impact of negative 7.5% compared with fiscal 2014. The previous foreign-exchange assumption was negative 8%.
Accenture now expects diluted GAAP EPS to be in the range of $4.67 to $4.72 for the full 2015 fiscal year, including the pension settlement charge, compared with $4.61 to $4.71 previously. Excluding the pension settlement charge of $0.06 per share in the third quarter, the company now expects adjusted EPS to be in the range of $4.73 to $4.78, compared with $4.66 to $4.76 previously.
GAIL (India) dropped after a foreign brokerage reportedly maintained underperform rating on the stock. The stock fell 3.19% at Rs 399.35. The stock hit a high of Rs 408.75 and a low of Rs 398.55 in intraday trade. The foreign brokerage reportedly said that LNG prices will remain weak and GAIL (India)'s long-term earnings outlook looks weak.
The Sensex has lost 16.60 points or 0.05% in this month so far (till 26 June 2015). The Sensex has risen 312.42 points or 1.13% in this calendar year so far (till 26 June 2015). From a 52-week low of 24,892 on 14 July 2014, the Sensex has risen 2,919.84 points or 11.73%. The Sensex is off 2,212.90 points or 7.37% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan has reportedly expressed concern that the world may be slipping into the kind of problems of the depression of the 1930s and an international consensus was needed to be built over time. Speaking at a London Business School (LBS) conference yesterday, 25 June 2015, Rajan reportedly said that it is time to start debating what should the global rules of the game on what is allowed in terms of central bank action. Rajan said that the situation is different in India where RBI still needs to bring down lending rates to spur investments.
Meanwhile, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report (FSR) June 2015 published yesterday, 25 June 2015, that India's relatively stronger macroeconomic fundamentals in terms of growth, inflation, current account and fiscal deficits provide a reasonable degree of resilience to Indian financial system in the event of spill-over effects from global factors. However, with the continued uncertainty over global growth and in the absence of effective international monetary policy coordination, there can be no room for complacency, the report stated. The FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability, as also the resilience of the financial system.
The latest Financial Stability Report notes that there has been significant improvement in India's macroeconomic environment and going forward, economic performance is expected to be better. External vulnerability has reduced and progress has been made with regard to fiscal consolidation. While foreign portfolio flows to India have been strong during the past year, unexpected changes in monetary policy in advanced economies (AEs) may lead to slowdown/reversal of foreign portfolio flows, with implications for segments of financial markets, according to the report. According to the FSR, India is better prepared to deal with the volatility, as compared to previous episodes.
According to the FSR report, concerns emanating from rapid rise in algorithm trading in recent years highlight the need for caution for India's securities markets, while measures have been taken to address the same. Significant steps have been taken to tighten the regulations dealing with illegal money-raising activities and insider trading, and also to strengthen the risk management systems at depositories.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update issued yesterday, 25 June 2015, that the southwest monsoon has been further advanced into remaining parts of north Arabian Sea, Gujarat state, Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Uttarakhand, Punjab, East Rajasthan, entire Haryana, Chandigarh & Delhi and some parts of West Rajasthan. The southwest monsoon was vigorous over East Rajasthan, Gujarat Region and Saurashtra & Kutch and active over Jharkhand, Uttarakhand, Haryana, Chandigarh & Delhi, Himachal Pradesh, West Madhya Pradesh, Madhya Maharashtra and South interior karnataka during past 24 hours until 8:30 IST, the IMD said.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 24% above the Long Period Average (LPA) until 24 June 2015. Region wise, the southwest monsoon was 52% above the LPA in Central India, 32% above the LPA in South Peninsula, 4% above the LPA in East & Northeast India and 5% below the LPA in Northwest India until 24 June 2015.
The IMD expects considerable decease in rainfall activity over Northwest India, central India and parts of Peninsular India during next 15 days. The IMD expects rainfall activity to increase and expects rains to be above normal over Odisha, Jharkhand, Gangetic West Bengal, Chhattisgarh, north Andhra Pradesh until 30 June 2015. The IMD expects near-normal rainfall over parts of east and northeast India during first ten days of July.
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.
Meanwhile, the Ministry of Water Resources today, 26 June 2015, announced that the water storage available in 91 important reservoirs of the country as on 25 June 2015 was 43.26 BCM which is 27% of total storage capacity of these reservoirs. This storage is 111% of the storage of corresponding period of last year and 146% of storage of average of last ten years. The present storage position during current year is better than the storage position of last year and is also better than the storage of average of last ten years.
States having better storage than last year for corresponding period are Himachal Pradesh, Punjab, Odisha, Tripura, Uttar Pradesh, Karnataka, Kerala and Tamil Nadu. States having lesser storage than last year for corresponding period are Rajasthan, Jharkhand, West Bengal, Gujarat, Madhya Pradesh, Chhattisgarh, Andhra Pradesh and Telangana. States having equal storage than last year for corresponding period are Maharashtra and Uttarakhand.
In overseas stock markets, European stocks edged lower today, 26 June 2015, after days of talks failed to yield a breakthrough in the Greece debt crisis. Key indices in France, Germany and UK were off 0.13% to 0.87%.
High-level talks between Greek and European officials this week have failed to break a long-standing stalemate over an economic reform plan for Greece. Greece and its international creditors again failed to reach an agreement at a meeting yesterday, 25 June 2015. European Union (EU) leaders have reportedly given Athens last chance to strike a deal on Saturday, 27 June 2015. German Chancellor Angela Merkel, whose country is Greece's biggest creditor, reportedly said yesterday, 25 June 2015, that the next meeting of Eurogroup ministers on Saturday, 27 June 2015, would be of decisive importance for a Greek solution since time was running out.
Debt-laden Greece has been given a Monday deadline to reach an economic-reform agreement with its creditors ahead of key repayment due next week, according to media reports.
Greece needs a deal to unlock new financing ahead of a 1.54 billion euro ($1.75 billion) debt payment due to the International Monetary Fund (IMF) on 30 June 2015. On the same day, Greece's international bailout expires. A default on its international creditors-the IMF and other eurozone governments-could force Greece into a messy exit from the euro.
French consumer confidence remained the same in June, according to data today, 26 June 2015, from statistics agency Insee. Consumer confidence in the eurozone's second largest economy was stable at 94 in June compared with 94 in May, after having progressed eight points between October 2014 and April 2015, Insee said.
Asian stocks edged lower today, 26 June 2015, as dwindling hopes of a Greek deal weighed on sentiment. Key indices in Japan, Singapore and Taiwan were off 0.15% to 0.66%. Key indices in South Korea and Indonesia were up 0.06% to 0.25%.
Stocks fell sharply in mainland China amid disappointment the government hasn't taken stronger steps to stimulate a slowing economy and worries that startup stocks are still too expensive. The Shanghai Composite lost 7.38%. In Hong Kong, the Hang Seng index lost 1.78%.
China's central bank yesterday, 25 June 2015, injected cash in to the financial system for the first time in 10 weeks. On Wednesday, 24 June 2015, the State Council said it would remove a loan-to-deposit cap for banks, which has long limited the amount banks can lend.
US stocks closed lower yesterday, 25 June 2015, failing to hold initial gains, as lack of resolution between Greece and its creditors weighed on investor sentiment.
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