Index heavyweights Reliance Industries, L&T and HDFC Bank led recovery for key benchmark indices in mid-afternoon trade. The intraday recovery for key benchmark indices in mid-afternoon trade materialised as European stocks rose after Greece's Prime Minister Alexis Tsipras told the European Parliament today, 8 July 2015, that Greece will submit a detailed reform proposal to its international creditors in the next few days. The Sensex remained below the psychological 28,000 mark. Earlier, the Sensex had regained the psychological 28,000 mark in morning trade after falling below that level at the onset of the trading session. The Sensex fell below the psychological 28,000 mark at the onset of the trading session as the index opened with a downward gap. The Sensex was currently off 392.49 points or 1.39% at 27,779.20.
The broad market depicted weakness. There were more two losers against every gainer on BSE. The BSE Small-Cap index was off 1.03%.
In overseas markets, stocks fell sharply in China after the country's securities regulator warned investors were in the grip of "panic sentiment". Japanese stocks fell sharply as jitters over Chinese market volatility, combined with concerns over Greece's debt heightened risk-off sentiment. Trading in US index futures indicated a weak opening of US stocks later in the global day.
Shares of state-run oil marketing companies (PSU OMCs) rose as crude oil prices fell.
Earlier, the Sensex, and the 50-unit CNX Nifty, both hit their lowest level in more than a week in early afternoon trade as these two key benchmark indices extended intraday losses.
At 14:22 IST, the S&P BSE Sensex was down 392.49 points or 1.39% at 27,779.20. The index lost 535.91 points at the day's low of 27,635.78 in early afternoon trade, its lowest level since 30 June 2015. The index fell 140.24 points at the day's high of 28,031.45 in opening trade.
The 50-unit CNX Nifty was down 127.70 points or 1.5% at 8,383.10. The index hit a low of 8,341.40 in intraday trade, its lowest level since 30 June 2015. The index hit a high of 8,457.50 in intraday trade.
The market breadth indicating the overall health of the market was quite weak. There were two losers against every gainer on BSE. 1,744 shares declined and 872 shares rose. A total of 111 shares were unchanged.
The BSE Mid-Cap index was off 109.53 points or 0.99% at 10,910.46. The BSE Small-Cap index was off 118.58 points or 1.03% at 11,379.74. The decline in both these indices was lower than the Sensex's decline in percentage terms.
FMCG major Hindustan Unilever (HUL) gained 1.23% to Rs 935. The stock hit high of Rs 944 and low of Rs 918.95 so far during the day.
Software major TCS were off 0.92%. The company unveils its Q1 June 2015 results tomorrow, 9 July 2015.
Index heavyweight Reliance Industries (RIL) declined 0.29% to Rs 1,000.50. The stock hit high of Rs 1,008.20 and low of Rs 992.10 so far during the day. Shares of Network 18 Media & Investments (NW18) slumped 3.76% to Rs 58.80.
RIL had announced after market hours on Monday, 6 July 2015, that it is proposing to sell 3.25 crore shares of NW18, (representing 3.1% of the equity capital of NW18) to bring down the aggregate shareholding of the promoter and promoter group to 75% and increase the public shareholding to 25% as mandated by Clause 40A of the listing agreement pursuant to Securities Contract (Regulation) Rules, 1957.
The OFS is taking place today, 8 July 2015, exclusively through Shinano Retail's broker through a sale on the separate window provided by the BSE and NSE for this purpose. The OFS opened at 9:15 IST and will close at 15:30 IST today, 8 July 2015.
The offer for sale (OFS) of shares in Network 18 Media & Investments (NW18) by Shinano Retail, a promoter group company of NW18 received bids for 47.12 lakh shares or 14.54% of offer size of 3.24 crore shares, data on NSE as at 14:15 IST showed.
Network 18 Media & Investments (NW18) after trading hours yesterday, 7 July 2015, fixed the floor price for the proposed OFS of its shares by Shinano Retail at Rs 53.40 per share.
Shares of state-run oil marketing companies (PSU OMCs) rose after crude oil prices declined. HPCL (up 0.16%) and Indian Oil Corporation (up 0.97%) edged higher. BPCL shed 0.48%.
In global commodities markets, Brent crude oil futures edged lower. Brent for August settlement was currently off 52 cents at $56.33 a barrel. The contract had gained 31 cents a barrel or 0.54% to settle at $56.85 a barrel during the previous trading session.
Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. 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. The government has already freed pricing of petrol and diesel.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 63.5275, compared with its close of 63.46 during the previous trading session.
Meanwhile, India's weather office, the India Meteorological Department (IMD), said in its daily monsoon update issued yesterday, 7 July 2015, that the Southwest Monsoon was active over Gangetic West Bengal, Jharkhand, Bihar, West Uttar Pradesh, Uttarakhand and Haryana, Chandigarh & Delhi and was normal over Nagaland, Manipur, Mizoram & Tripura, East Uttar Pradesh, Himachal Pradesh, West Rajasthan and Chhattisgarh during the past 24 hours until 8:30 IST.
For the country as a whole, cumulative rainfall during this year's monsoon season was 2% below the Long Period Average (LPA) until 7 July 2015. Region wise, the southwest monsoon was 12% above the LPA in Northwest India, 5% below the LPA in Central India and 4% below the LPA each in South Peninsula and East & Northeast India until 7 July 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 higher today, 8 July 2015, after Greece's Prime Minister Alexis Tsipras told the European Parliament today, 8 July 2015, that Greece will submit a detailed reform proposal to its international creditors in the next few days. Key indices in UK, France and Germany were up 0.22% to 0.66%. In Spain, the IBEX 35 index was up 0.56%. In Italy, the FTSE MIB index was up 1.18%
Investors continue to monitor developments on Greece's debt crisis. Greece will submit a detailed reform proposal in the next few days, in a bid to unlock further bailout aid, the country's Prime Minister Alexis Tsipras reportedly told the European Parliament today, 8 July 2015. Referring to his country's resounding "no" in Sunday's referendum, Tsipras stressed the vote wasn't a signal for Greece to break with Europe, but to return to the negotiating table with a stronger mandate.
Following the emergency euro zone summit in Brussels yesterday, 7 July 2015, European leaders gave debt-stricken Greece a final deadline of Sunday to reach a new bailout deal and avoid Greece's exit from the euro zone. Representatives of the 19-country euro zone said all 28 European Union leaders would meet on Sunday, 12 July 2015, to decide Greece's fate. The talks were organized after Greeks voted in a referendum on Sunday, 5 July 2015, against a bailout that carried stringent austerity measures.
European Central Bank Governing Council member Christian Noyer reportedly said today, 8 July 2015, that there will be no more emergency lending to Greek banks if the country's government fails to secure a bailout deal with lenders. Speaking on French radio station Europe 1, Noyer warned that there must be an agreement by 12 July 2015 otherwise it "will be too late and the consequences will be grave", media reports said.
Without some new cash in the coming weeks, Greece won't be able to make a euro 3.5 billion ($3.8 billion) bond payment to the European Central Bank (ECB) which is payable on 20 July 2015. Such a nonpayment could push the ECB to cut emergency lending to Greek banks--a move that would send the country's financial system into meltdown and force the government to print its own money to recapitalize them. Greek banks have been shut for more than a week, after the ECB put a limit on the emergency loans they had been drawing to buffer growing deposit outflows. Cash withdrawals from ATMs have been limited to euro 60 a day and depositors are unable to transfer money abroad.
Some short-term funding and the prospect of a longer-term bailout deal from the rest of the eurozone could allow Greece--and the ECB--to let banks reopen and normal economic activity in the country to resume.
Greece's last bailout expired last Tuesday and Greece missed a euro 1.6 billion payment to the IMF.
In Asia, Chinese stocks tumbled today, 8 July 2015, after the country's securities regulator warned investors were in the grip of "panic sentiment". In mainland China, the Shanghai Composite index lost 5.9%. In Hong Kong, the Hang Seng index lost 5.84%.
The heavy losses came despite a rare pledge early today, 8 July 2015, by the People's Bank of China that it would closely monitor stock movements and continue to use various means to support the state-backed margin-finance entity China Securities Finance Corp. (CSF) in order to protect market stability.
A spokesman of the China Securities Regulatory Commission, Deng Ge, described the current market mood as "panic sentiment", according to news reports.
China has put an arsenal of measures to work in recent days to stem the selloff that has wiped out roughly $2.4 trillion in value from China's equities. The China Securities Regulatory Commission today, 8 July 20015, announced that the China Securities Finance Corp., a commission unit that provides financing for margin trading, will increase purchases of small-cap stocks. The move follows an earlier pledge by the company to buy blue-chip shares to stabilize the market. China's central bank also said it would help ensure the China Securities Finance Corp. has ample liquidity to stabilize the market. The state-backed company may tap the interbank market, issue bonds, use mortgage financing and borrow from relending facilities, the People's Bank of China said in a statement.
Over the weekend, Beijing suspended initial public offerings and made it easier for investors to borrow to buy stocks.
The sharp slide in Chinese stocks weighed on other Asian markets. Key benchmark indices in Singapore, Taiwan, Japan, Indonesia and South Korea were off 0.73% to 3.14%.
Trading in US index futures indicated that the Dow could fall 205 points at the opening bell today, 8 July 2015. US stocks ended with modest gains yesterday, 7 July 2015, as speculation grew that Greece's crisis would be contained.
In economic data, the US trade deficit rose 2.9% in May, mostly because the US exported fewer aircraft and other manufactured goods. Another data released by the US Department of Labor yesterday, 7 July 2015, showed that job openings at US workplaces rose to a record high of 5.36 million in May (data go back to the end of 2000) from 5.33 million in April.
Meanwhile, investors are now looking ahead to the minutes from the Federal Reserve's June meeting, which are set to be released today, 8 July 2015. The International Monetary Fund yesterday, 7 July 2015, warned of the risks of raising rates too early in the US and called for the Fed to delay a raise until 2016.
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