Key benchmark indices continued to hover in negative terrain in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was currently trading below the psychological 26,000 mark. Earlier, the Sensex had regained the psychological 26,000 level after falling below that level in early trade. The Sensex was currently off 110.95 points or 0.43% at 25,921.43. The 50-unit CNX Nifty was currently off 30.35 points or 0.39% at 7,850.35. The market breadth indicating the overall health of the market was positive.
In overseas markets, Chinese stocks fell even after the nation's central bank announced fresh measures after trading hours yesterday, 25 August 2015, to ease monetary policy to battle the country's deepening economic slowdown. European stocks edged lower as market enthusiasm over stimulus measures enacted by China faded. Trading in US index futures pointed to a recovery in US stocks at the opening bell.
Metal shares were mixed. Bank stocks also witnessed mixed trend.
Foreign portfolio investors (FPIs) pressed substantial sales of Indian stocks yesterday, 25 August 2015. FPIs sold shares worth a net Rs 2080.01 crore yesterday, 25 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1963.09 crore yesterday, 25 August 2015, as per provisional data released by the stock exchanges.
Indian stocks may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month August 2015 series to September 2015 series. The near month August 2015 derivatives contracts are set to expire tomorrow, 27 August 2015.
At 14:15 IST, the S&P BSE Sensex was down 110.95 points or 0.43% at 25,921.43. The index fell 344.69 points at the day's low of 25,687.69 in early trade. The index rose 124.23 points at the day's high of 26,156.61 in morning trade.
The CNX Nifty was down 30.35 points or 0.39% at 7,850.35. The index hit a low of 7,785.60 in intraday trade. The index hit a high of 7,930.05 in intraday trade.
The BSE Mid-Cap index was up 13.03 points or 0.12% at 10,573.35. The BSE Small-Cap index was up 75.43 points or 0.71% at 10,770.10. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,350 shares rose and 1,185 shares fell. A total of 93 shares were unchanged.
Bank stocks also witnessed mixed trend. Among PSU banks, Bank of Baroda (down 2.16%), Syndicate Bank (down 2.03%), Union Bank of India (down 1.71%), Canara Bank (down 1.48%), Punjab National Bank (down 0.93%), Punjab and Sind Bank (down 0.9%), Andhra Bank (down 0.69%), UCO Bank (down 0.56%), Bank of India (down 0.21%) and Corporation Bank (down 0.11%), edged lower. Allahabad Bank (up 0.12%), United Bank of India (up 0.47%), Central Bank of India (up 0.95%), Vijaya Bank (up 0.98%), IDBI Bank (up 1.16%), Bank of Maharashtra (up 1.18%), Indian Bank (up 2.42%) and Dena Bank (up 4.80%), edged higher.
State Bank of India was off 2.05%. The bank announced after market hours yesterday, 25 August 2015, that the Central Board of the bank has cleared a proposal of preferential allotment of equity shares to Government of India, the principal shareholder of the bank. The size of the preferential issue is Rs 5393 crore.
Shares of private sector banks also witnessed a mixed trend. IndusInd Bank (down 2.71%), Federal Bank (down 2.64%), ICICI Bank (down 0.95%), Axis Bank(down 0.84%) and Kotak Mahindra Bank (down 0.64%), edged lower. HDFC Bank (up 0.08%), Yes Bank (up 0.99%) and City Union Bank (up 3.32%), edged higher.
Metal shares were mixed. Hindustan Copper (up 1.86%), Bhushan Steel (up 1.47%), Hindustan Zinc (up 0.91%), National Aluminium Company (up 0.68%), Hindalco Industries (up 0.31%) and JSW Steel (up 0.29%), edged higher. Vedanta (down 0.12%), Tata Steel (down 0.82%), NMDC (down 0.86%), Jindal Steel & Power (down 1.52%) and Steel Authority of India (down 1.86%), edged lower.
Meanwhile, according to a summary of the electronic consultation that the Reserve Bank of India (RBI) held with the Technical Advisory Committee on Monetary Policy in the run up to the monetary policy review on 4 August 2015, four out of seven external members of the committee recommended a cut in the repo rate at the 4 August policy review. Three of them suggested a reduction in repo rate by 25 basis points and one member suggested a 50 basis points reduction. Three members recommended a status quo in the repo rate, with one of them suggesting a reduction in the statutory liquidity ratio (SLR) by 50 basis points. The RBI kept the repo rate unchanged at the 4 August policy review.
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, 25 August 2015, that for the country as a whole, cumulative rainfall during this year's monsoon season was 11% below the Long Period Average (LPA) until 25 August 2015. Region wise, the rainfall was 20% below the LPA in South Peninsula, 14% below the LPA in Central India, 6% below the LPA in East & Northeast India and 5% below the LPA in Northwest India until 25 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.
In overseas markets, European stocks edged lower today, 26 August 2015, as market enthusiasm over stimulus measures enacted by China faded. Key benchmark indices in Germany, UK and France were off 1% to 1.30%.
Chinese stocks fell in choppy trade today, 26 August 2015, even after the nation's central bank announced fresh measures after trading hours yesterday, 25 August 2015, to ease monetary policy to battle the country's deepening economic slowdown. In mainland China, the Shanghai Composite lost 1.27%. In Hong Kong, the Hang Seng index was off 1.52%. China's central bank, People's Bank of China (PBOC), today, 26 August 2015, announced that it will inject 140 billion yuan ($21.80 billion) into the financial system through a short-term liquidity adjustment (SLO) operation. The SLO loans come with a 2.3% interest rate. Short-term liquidity operations were launched by the PBOC in 2013 to reduce fluctuations in liquidity and stabilize interbank funding costs. The decision comes a day after the Chinese central bank cut its benchmark interest rates and lowered the reserve-requirement ratio for banks in the wake of recent stock-market turmoil in the country.
The Shanghai Composite Index fell 7.6% yesterday, 25 August 2015, following an 8.5% plunge on Monday, 24 August 2015. China's surprise move to devalue its currency by almost 2% two weeks ago has magnified worries that its economic slowdown is worse than official data shows.
In other Asian markets, Key benchmark indices in Taiwan, Indonesia, Japan and South Korea were up by 0.52% to 3.2%. In Singapore, the Straits Times was off 0.07%.
Trading in US index futures indicated that the Dow could surge 225 points at the opening bell today, 26 August 2015. In a dramatic reversal to a morning rally, US stocks relinquished all of their opening gains to finish with losses yesterday, 25 August 2015, as selling accelerated during the last one hour or so of the trading session. The latest economic data showed that new-home sales bounced back in July, while a separate report showed consumer confidence rising more than projected in August. The Conference Board, a private research group, said that its index of consumer confidence rose to 101.5 in August, bouncing back after a steep decline in July.
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