Shares of private banks led rally as key benchmark indices surged after Greece's parliament approved tough austerity measures needed for the country to receive financial aid and potentially avoid its exit from the eurozone. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their highest level in more than twelve weeks as these two key benchmark indices extended their intraday gains in late trade. The market breadth indicating the overall health of the market was positive.
The Sensex was provisionally up 257.29 points or 0.92% at 28,455.58. The gains for Nifty were higher in percentage terms than those for the Sensex. The Nifty was provisionally up 84.25 points or 0.99% at 8,608.05. Key indices remained in positive terrain throughout the trading session. The BSE Mid-Cap index was up 1.35%, outperforming the Sensex. In overseas markets, European stocks surged after Greece's parliament approved tough austerity measures needed for the country to receive financial aid.
Shares of private sector banks were in demand after the Union Cabinet approved clubbing of different categories of foreign investment in companies with a composite cap. Shares of public sector banks also edged higher.
Key indices edged higher for the second day in a row today, 16 July 2015.
Meanwhile, the Union Cabinet today, 16 July 2015, gave its approval to review the existing foreign direct investment (FDI) policy on various sectors provided in the Consolidated FDI Policy Circular 2014, as amended by the Consolidated FDI Policy Circular 2015, by introducing composite caps for simplification of FDI policy to attract foreign investments.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 407.69 crore yesterday, 15 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 50.38 crore yesterday, 15 July 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks surged after Greece's parliament approved tough austerity measures needed for the country to receive financial aid. Earlier during the global day, Asian stocks edged higher after Greece's parliament approved austerity measures to secure a bailout for the country and potentially avoid its exit from the eurozone. US stocks closed slightly lower yesterday, 15 July 2015, snapping a four-session winning streak, as investors monitored developments in Greece.
As per provisional figures, the S&P BSE Sensex was up 257.29 points or 0.92% at 28,455.58. The index jumped 280.14 points at the day's high of 28,478.43 at the fag end of the trading session, its highest level since 20 April 2015. The index rose 47.52 points at the day's low of 28,245.81 in early trade.
The CNX Nifty was up 84.25 points or 0.99% at 8,608.05, as per provisional figures. The index hit a high of 8,616.10 in intraday trade, its highest level since 20 April 2015. The index hit a low of 8,542.90 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,553 shares gained and 1,261 shares fell. A total of 136 shares were unchanged.
The BSE Mid-Cap index was up 149.27 points or 1.35% at 11,200.93, outperforming the Sensex. The BSE Small-Cap index was up 86.74 points or 0.75% at 11,665.43, underperforming the Sensex.
The total turnover on BSE amounted to Rs 2754 crore, slightly higher than turnover of Rs 2750.14 crore registered during the previous trading session.
Shares of private sector banks were in demand after the Union Cabinet approved clubbing of different categories of foreign investment in companies with a composite cap. Finance Minister Arun Jaitley said at a press conference after a meeting of the Union Cabinet and the Cabinet Committee on Economic Affairs (CCEA) that foreign direct investment, foreign portfolio investment and investments by non-resident Indians would be "clubbed together under a composite cap". Axis Bank (up 4.11%), ICICI Bank (up 0.75%), IndusInd Bank (up 0.71%) and Yes Bank (up 2.92%) gained.
HDFC Bank rose 1.99% to Rs 1,118.55 on reports that a prominent domestic brokerage has maintained its buy call on the stock. The stock hit a high of Rs 1,118.85 intraday trade, which is a record high for the counter. The brokerage reportedly said that HDFC Bank is best placed in the current environment. It further added that HDFC Bank has most granular balance sheet amongst the Indian lenders and digitalization initiatives are gaining traction.
Kotak Mahindra Bank jumped 4.2%. The government yesterday, 15 July 2015, deferred a decision on a proposal to raise the aggregate foreign investment ceiling in Kotak Mahindra Bank to 55%. The bank had sought approval from the Foreign Investment Promotion Board (FIPB) for increasing the aggregate foreign investment ceiling in the bank to 55% pursuant to a merger of ING Vysya Bank with Kotak Mahindra Bank.
South Indian Bank slumped after reporting weak Q1 results. The stock fell 5.7%. The bank's net profit declined 48.44% to Rs 65.29 crore on 1% growth in total income to Rs 1480.51 crore in Q1 June 2015 over Q1 June 2014. The Q1 result was announced after market hours yesterday, 15 July 2015. South Indian Bank's provisions and contingencies dropped 15.97% to Rs 79.51 crore in Q1 June 2015 over Q1 June 2014.
The bank's ratio of gross non-performing assets (NPAs) to gross advances stood at 1.85% as on 30 June 2015 as against 1.71% as on 31 March 2015 and 1.5% as on 30 June 2014. The ratio of net NPA to net advances stood at 1.21% as on 30 June 2015 as against 0.96% as on 31 March 2015 and 0.91% as on 30 June 2014.
Shares of public sector banks edged higher. UCO Bank (up 0.46%), Syndicate Bank (up 1.31%), Punjab National Bank (up 0.24%), Allahabad Bank (up 0.83%), State Bank of India (SBI) (up 1.27%), Union Bank of India (up 1.69%), Canara Bank (up 0.95%), and Bank of India (up 0.67%) edged higher. Corporation Bank (down 0.39%) and Bank of Baroda (down 0.26%) declined.
Meanwhile, the Union Cabinet today, 16 July 2015, gave its approval to review the existing foreign direct investment (FDI) policy on various sectors provided in the Consolidated FDI Policy Circular 2014, as amended by the Consolidated FDI Policy Circular 2015, by introducing composite caps for simplification of FDI policy to attract foreign investments. Finance Minister Arun Jaitley said at a press conference after a meeting of the Union Cabinet and the Cabinet Committee on Economic Affairs (CCEA) that the government has approved clubbing of different categories of foreign investment in companies into a composite cap. He added that foreign direct investment, foreign portfolio investment and investments by non-resident Indians would be "clubbed together under a composite cap".
Among other decisions, the Union Cabinet today, 16 July 2015, gave its approval for redevelopment of about 400 'A-1' and 'A' category railway stations. These stations are to be developed by leveraging real estate development of land and air space in and around the stations. The 'A-1' and 'A' category railway stations are generally located in metros, major cities, pilgrimage centres and important tourist destinations across the country, according to a government statement.
Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) today, 16 July 2015, approved the creation of an intra state transmission system in Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra and Rajasthan at an estimated cost of Rs 8548.68 crore with Government of India contribution from National Clean Energy Fund (NCEF) of Rs 3419.47 crore. These states are rich in renewable resource potential and large capacity renewable power projects are planned there. Creation of an intra state transmission system will facilitate evacuation of renewable power from generation stations to load centres, according to a government statement.
Meanwhile, in the global commodities markets, Brent crude oil prices edged higher in volatile trade after weekly data showed that US crude inventories dropped last week and refinery demand was high. Brent for August settlement was currently up 91 cents at $57.96 a barrel. The contract had dropped $1.46 a barrel or 2.49% to settle at $57.05 a barrel during the previous trading session. The August Brent contract is set to expire today, 16 July 2015. Brent for September settlement was currently up 70 cents at $57.82 a barrel.
India imports about 80% of its crude requirements and a decline in crude eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure. 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.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 63.485, compared with its close of 63.4225 during the previous trading session.
Meanwhile, state-run oil marketing companies yesterday, 15 July 2015, announced a reduction in petrol and diesel prices. Indian Oil Corporation said that the company has decided to reduce the basic retail selling price of petrol by Rs 2 per litre (excluding state levies) with effect from the midnight of 15 July/16 July 2015. IOCL also announced reduction in basic retail selling price of diesel by Rs 2 per litre (excluding state levies).
Meanwhile, the data released by the Ministry of Commerce & Industry after trading hours yesterday, 15 July 2015, showed that India's merchandise exports fell 15.82% to $22.29 billion in June 2015 over June 2014. Imports fell 13.4% to $33.11 billion in June 2015 over June 2014. Oil imports fell 34.97% to $8.67 billion in June 2015 over June 2014. Non-oil imports fell 1.85% to $24.44 billion in June 2015 over June 2014. The trade deficit declined to $10.82 billion in June 2015 from $11.76 billion in June 2014.
Meanwhile, India's weather office, the India Meteorological Department (IMD), said in its daily monsoon update issued yesterday, 15 July 2015, that the Southwest Monsoon was vigorous over Arunachal Pradesh and Rayalaseema and was active over Assam & Meghalaya, Sub-Himalayan West Bengal & Sikkim, Bihar and Coastal Andhra Pradesh during 24 hours ending until 8:30 IST.
For the country as a whole, cumulative rainfall during this year's monsoon season was 6% below the Long Period Average (LPA) until 15 July 2015. Region wise, the southwest monsoon was 15% above the LPA in Northwest India, 6% below the LPA in East & Northeast India, 12% below the LPA in South Peninsula and 13% below the LPA in Central India until 15 July 2015.
The quantum of and the spatial distribution of rainfall this month holds key, with July being a crucial month for the sowing of Kharif crops. 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 surged today, 16 July 2015, after Greece's parliament today, 16 July 2015, approved austerity measures to secure a bailout for the country and potentially avoid its exit from the eurozone. Key indices in France, UK and Germany were up 0.45% to 1.49%. In Spain, the IBEX 35 index was up 1.41%. In Italy, the FTSE MIB index was up 1.3%.
The Greek parliament today, 16 July 2015, passed a sweeping bundle of austerity measures, a prerequisite for 86 billion euros ($95 billion) in loans for the next three years from the eurozone and International Monetary Fund. The austerity measures call for steep spending cuts, market reforms and tax increases. Early this week, eurozone leaders agreed on a three-year bailout for the debt-laden country.
Greece's financial institutions have been on life support for weeks. Depositor withdrawals have been limited to euro 60 a day during a bank holiday that has been in place since 29 June 2015.
With Greek parliamentary approval now given, the debt plan now moves to a parliamentary vote in a handful of individual eurozone countries, including hard-liners Germany and Finland, for legislative approval.
Meanwhile, the European Central Bank (ECB) is widely expected to keep interest rates unchanged after a monetary policy meeting today, 16 July 2015.
Asian stocks rose today, 16 July 2015, after Greece's parliament approved austerity measures to secure a bailout for the country and potentially avoid its exit from the eurozone. Key benchmark indices in China, Hong Kong, Singapore, Japan, and South Korea rose 0.43% to 0.72%. Taiwan's Taiwan Weighted Average fell 0.13%.
The Asian Development Bank (ADB) has reportedly cut its 2015 and 2016 growth forecasts for China and the rest of Asia, largely as a result of the slower than expected growth in the region's largest economy and in developed economies elsewhere. Developing Asia is now expected to grow 6.1% and 6.2% this year and in 2016 against the ADB's March forecast of 6.3% for both years, the bank said in its 2015 outlook supplement released today, 16 July 2015.
US stocks closed slightly lower yesterday, 15 July 2015, snapping a four-session winning streak, as investors monitored developments in Greece. In macro data in the US, the producer-price index, which measures the prices at which companies sell goods and services, rose 0.4% in June, the Labor Department said yesterday, 15 July 2015. Core prices rose 0.3%. US industrial production rose 0.3% in June from May.
In her semiannual testimony to Congress yesterday, 15 July 2015, Federal Reserve Chairwoman Janet Yellen repeated her view that the Fed will likely hike interest rates this year if the US economy expands as expected, and cited improvement in the labor market. Yellen will speak before the Senate Banking Committee today, 16 July 2015.
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