Mining and metal stocks led losses for key benchmark indices. The barometer index, the S&P BSE 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. The Sensex continued to hover below the psychological 28,000 mark. Earlier, the Sensex fell below the psychological 28,000 level in mid-morning trade. The Sensex was currently off 235.76 points or 0.84% at 27,865.96. The broad market depicted weakness. There were more than two losers against every gainer on BSE. The BSE Small-Cap index was off 145.78 points or 1.21%. The decline in this index was higher than the Sensex's decline in percentage terms. In overseas markets, Asian and European stocks fell, with investors assessing China's unexpected devaluation of the yuan.
Telecom stocks declined. Most FMCG stocks dropped.
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.
At 14:21 IST, the S&P BSE Sensex was down 235.76 points or 0.84% at 27,865.96. 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 82.95 points or 0.97% at 8,442.65. 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 quite weak. There were more than two losers against every gainer on BSE. On BSE, 1,914 shares declined and 868 shares rose. A total of 94 shares were unchanged.
The BSE Mid-Cap index was down 84.66 points or 0.73% at 11,470.74. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index was down 145.78 points or 1.21% at 11,909.21. The decline in this index was higher than the Sensex's decline in percentage terms.
Telecom stocks declined. Bharti Airtel (down 1.37%), Tata Teleservices (Maharashtra) (down 0.99%), MTNL (down 1.52%), Idea Cellular (down 0.61%) and Reliance Communications (down 0.21%) declined.
Most FMCG stocks dropped. Tata Global Beverages (down 0.94%), Nestle India (down 0.46%), Marico (down 0.91%), Hindustan Unilever (HUL) (down 1.5%), Dabur India (down 1.33%), Colgate Palmolive India (down 0.41%), GlaxoSmithkline Consumer Healthcare (down 0.61%), declined. Godrej Consumer Products (up 0.34%), Procter & Gamble Hygiene and Health Care (up 0.12%), Jyothy Laboratories (up 8.26%) and Bajaj Corp (up 1.12%) gained.
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 has to 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 0.49% to 0.82%.
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 1.41%.
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 2.44%.
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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