Trading for the week ended on a subdued note as key benchmark indices edged lower as investors awaited US jobs data to get a clearer picture of the health of the world's biggest economy. The barometer index, the S&P BSE Sensex, shed 62.21 points or 0.23% at 27,139.28, as per the provisional closing data. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty lost 10.75 points or 0.13% at 8,327.15, as per the provisional closing data.
The Sensex lost 167.35 points or 0.61% at the day's low of 27,034.14 in morning trade, its lowest level since 30 June 2016. The barometer index rose 93.33 points or 0.34% at the day's high of 27,294.82 in early trade, its highest level since 5 July 2016. The Nifty lost 50.35 points or 0.6% at the day's low of 8,287.55 in morning trade, its lowest level since 30 June 2016. The index rose 15.40 points or 0.18% at the day's high of 8,353.30 in early trade.
In overseas stock markets, European stocks edged higher in volatile trade with financial shares advancing after a tough week for the sector, with the gains coming ahead of closely watched figures on the US labor market due later in the global day. Asian stocks edged lower as investors awaited US jobs data to get a clearer picture of the health of the world's biggest economy. US stocks closed mostly lower yesterday, 7 July 2016, tracking sinking oil prices, but the market pared losses late in the session as investors sought bargains ahead of the closely watched jobs report. As per data released by Automatic Data Processing Inc., US private-sector employment picked up a bit in June. Meanwhile, initial jobless claims fell last week to a nearly three-month low. The US government will announce nonfarm payroll report for June 2016 later in the global day today, 8 July 2016.
Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 1,539 shares fell and 1,165 shares rose. A total of 156 shares were unchanged. The BSE Mid-Cap index provisionally rose 0.11%, outperforming the Sensex. The BSE Small-Cap index provisionally fell 0.17%. The decline in this index was lower than the Sensex's fall in percentage terms.
The total turnover on BSE amounted to Rs 3118 crore, higher than turnover of Rs 2878.18 crore registered during the previous trading session.
GAIL (India) (down 2.57%), Bharti Airtel (down 2.26%) and Adani Ports & Special Economic Zone (down 1.62%) were among the major losers from the Sensex pack.
Most capital goods stocks dropped. BEML (down 1.15%), Havells India (down 0.08%), L&T (down 1.03%), Crompton Greaves (down 3.21%), Siemens (down 0.41%) and Bharat Electronics (down 1.22%) declined. ABB (India) (up 3.22%) and Thermax (up 0.8%) gained.
Bharat Heavy Electricals fell 1.64% at Rs 137.75, with the stock declining on profit booking after recent strong gains. The Bharat Heavy Electricals (Bhel) stocks had witnessed a sharp surge recently. The stock jumped 18.43% in eight trading sessions to settle at Rs 140.05 yesterday, 7 July 2016, from its close of Rs 118.25 on 24 June 2016. Meanwhile, a foreign brokerage reportedly maintained 'underperform' rating on Bharat Heavy Electricals (Bhel) with a target price of Rs 100. The target price remains substantially lower than the stock's ruling market price. The foreign brokerage has reportedly cut its EPS estimates on Bhel by 3% to 10% for FY 17-18.
The BSE Capital Goods index had outperformed the market over the past one month till 7 July 2016, rising 4.81% compared with 0.71% rise in the Sensex. The index had also outperformed the market in past one quarter, gaining 20.81% as against Sensex's 10.19% rise.
Cadila Healthcare rose 4.92% after the company's announcement that its Moraiya manufacturing facility in Gujarat has received an Establishment Inspection Report from the US drug regulator. The announcement was made during trading hours today, 8 July 2016. Cadila Healthcare said in a statement that the receipt of Establishment Inspection Report (EIR) from the United States Food and Drug Administration (USFDA) only indicates closure of the inspection points (483s) raised based on the inspection of the plant carried out between 28 August 2014 and 5 September 2014. What is "closed" is the initial review that resulted in the warning letter issuance. Though this is a positive step towards the resolution of the warning letter issued by the USFDA, it does not in itself indicate resolution of the warning letter. The company is in constant follow up with the USFDA for resolution of the warning letter.
Meanwhile, India Meteorological Department (IMD) said in its latest update yesterday, 7 July 2016 that in the week from 30 June to 6 July 2016, rainfall was above long period average (LPA) by 35% over the country as a whole. For the country as a whole, cumulative rainfall during this year's monsoon until 6 July has been 1% above LPA, thus making a further recovery of 13% from the week ended 29 June, the IMD said. The IMD said in its extended forecast upto 25 July that it expects above normal rainfall activity over central India till 15 July. The weather office expects normal to above normal rainfall over northern parts of the country and northeastern states between 16 to 25 July. The IMD expects a subdued rainfall activity over south Peninsular India.
The IMD has forecast rains to be above normal in July and August 2016. The quantum of the rainfall and its spatial and temporal distribution are critical for the country's agriculture. Around 70% of the country's farmlands are rain-fed.
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