Oil and auto stocks led rally for key benchmark indices. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty recorded gains of more than 1% each based on provisional closing data. The market breadth indicating the overall health of the market was strong. The Sensex was provisionally up 307.71 points or 1.09% at 28,489.85. The BSE Mid-Cap index was up 1.3%, outperforming the Sensex. Meanwhile, the Rajya Sabha Select Committee on the Goods and Services Tax (GST) bill presented its report in the Rajya Sabha today, 22 July 2015.
Index heavyweight Reliance Industries (RIL) surged to 52-week high. Shares of TV broadcasting firm Zee Entertainment Enterprises jumped. Bank stocks edged higher on renewed buying.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 226.88 crore yesterday, 21 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 146.32 crore yesterday, 21 July 2015, as per provisional data released by the stock exchanges.
Earlier, key indices bounced back after an initial slide triggered by weakness in Asian stocks. The Sensex and the 50-unit CNX Nifty, both, hit one-week low in early trade.
In overseas stock markets, European stocks edged lower as sentiment across equity markets worldwide was soured by a round of disappointing corporate earnings. Asian stocks edged lower amid disappointing results from technology and industrial heavyweights in the US. US stocks edged lower yesterday, 21 July 2015, after disappointing quarterly reports from IMB and United Technologies Corp.
As per provisional closing, the S&P BSE Sensex was up 307.71 points or 1.09% at 28,489.85. The index jumped 364.28 points at the day's high of 28,546.42 in late trade, its highest level since 20 July 2015. The index lost 111.23 points at the day's low of 28,070.91 in early trade, its lowest level since 15 July 2015.
The CNX Nifty was up 104.05 points or 1.22% at 8,633.50. The index hit a high of 8,643.90 in intraday trade. The index hit a low of 8,498.65 in intraday trade, its lowest level since 15 July 2015.
The BSE Mid-Cap index was up 143.97 points or 1.3% at 11,234.56, outperforming the Sensex. The BSE Small-Cap index was up 99.34 points or 0.86% at 11,676.16, underperforming the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,768 shares gained and 1,027 shares fell. A total of 132 shares were unchanged.
Shares of upstream oil exploration & production (E&P) firms gained. ONGC (up 1.24%) edged higher. Oil India (down 0.07%) edged lower.
Index heavyweight Reliance Industries (RIL) advanced 4.42% at Rs 1,052. The stock hit a 52-week high of Rs 1,053.50 in intraday trade today, 22 July 2015. RIL is scheduled to announce its Q1 June 2015 results on Friday, 24 July 2015
Cairn India rose 2.61% at Rs 167. The stock hit a high of Rs 167.45 and a low of Rs 156.80. Cairn India's consolidated net profit fell 23.59% to Rs 834.98 crore on 36.18% decline in total income to Rs 3190.66 crore in Q1 June 2015 over Q1 June 2014. The result was announced after market hours yesterday, 21 July 2015. Cairn India's average price realisation dropped 42% to $56 per barrel in Q1 June 2015 over Q1 June 2014 mainly due to 43% decline in oil prices to $56.30 per barrel in Q1 June 2015 over Q1 June 2014.
Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter was Rs 1302 crore with healthy EBITDA margin of 50%. EBITDA for the quarter is higher by 79% compared to Q4 March 2015 which saw an exploration cost write-off of Rs 552 crore. EBITDA margins were boosted by lower operating costs which for Rajasthan waterflood case have reduced by 10% from the previous fiscal year average of $5.8 to $5.2/boe in Q1 June 2015 as a result of reduction in well and facility maintenance costs and MG&A. Along with field opex, corporate MGA too has been brought down by 14% as a result of manpower optimisation and decrease in overheads on account of various cost optimisation initiatives currently underway.
Total cashflow from operations for the quarter was Rs 1268 crore. This quarter saw a net capex spend of $104 million. The company closed the quarter with a healthy cash and cash equivalent position of Rs 16467 crore; of which 72% is invested in rupee funds and the rest in dollar funds.
In its outlook for the year ending 31 March 2016 (FY 2016), the company said it continues to remain committed to creating long term shareholder value. Despite low oil prices and substantial cut in capital expenditure (capex), the company will at a minimum maintain Rajasthan production in current year at the year ending 31 March 2015 (FY 2015) levels. Planned capital investment is for a net capex of $500 million; 45% in Core MBA fields, 40% in Growth projects of Barmer Hill, Satellite Fields & Gas and 15% in exploration. The company retains the flexibility to invest balance $1.4 billion as oil prices improve and costs bottom out and also aims to have healthy cash flows post capex so as to retain the ability to pay dividends.
GAIL (India) rose 1.4%. With respect to news article titled "GAIL plans to buy US shale gas asset for $1.5 billion to meet future Indian demand", GAIL (India) during market hours today, 22 July 2015, clarified that at present there is no concrete discussion or proposal for buying any US Shale gas asset.
Shares of public sector oil marketing companies (PSU OMCs) edged higher. Indian Oil Corporation (up 2.08%), BPCL (up 2.01%) and HPCL (up 3.55%) edged higher.
Shares of TV broadcasting firm Zee Entertainment Enterprises jumped. The stock surged 5.24% to Rs 406.95. The stock hit a 52-week high of Rs 407.20 in intraday trade today, 22 July 2015.
Meanwhile, the Rajya Sabha Select Committee on the Goods and Services Tax (GST) bill presented its report in the Rajya Sabha today, 22 July 2015. The GST Bill has been passed by the Lok Sabha and was referred to the Select Committee by Rajya Sabha, where the ruling NDA government does not enjoy majority, for scrutiny. The government aims to roll out GST from 1 April 2016.
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, India's weather office, the India Meteorological Department (IMD), said in its daily monsoon update issued yesterday, 21 July 2015, that the Southwest Monsoon was active over Andaman & Nicobar Islands, West Madhya Pradesh and Konkan & Goa during past 24 hours ending until 8:30 IST.
For the country as a whole, cumulative rainfall during this year's monsoon season was 7% below the Long Period Average (LPA) until 21 July 2015. Region wise, the rainfall was 14% below the LPA in Central India, 12% below the LPA in South Peninsula, 6% below the LPA in East & Northeast India and 8% above the LPA in Northwest India until 21 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 stock markets, European stocks edged lower today, 22 July 2015, taking their cue from a downbeat session in the US as disappointing earnings from technology companies undermined sentiment. Key indices in Germany, UK and France were off 0.39% to 1.19%.
In UK, the minutes of the Bank of England's (BOE) Monetary Policy Committee's July policy meeting published today, 22 July 2015, showed all nine members of the rate-setting panel voted to keep the BOE's benchmark rate at a record low of 0.5%. All nine also voted to leave the BOE's bond portfolio at 375 billion pounds ($583.51 billion).
In Greece, the country's parliament is set to vote today, 22 July 2015, on a second set of austerity measures demanded by the country's lenders. Formal negotiations on a third bailout program for Greece can only start once the measures have legislative approval. Meanwhile, trading in Greek stocks remains closed. Standard & Poor's yesterday, 21 July 2015, upgraded Greece's sovereign credit rating by two notches and revised its outlook to stable from negative, citing euro zone countries' initial agreement to start negotiations with Athens on a third bailout.
Asian stocks edged lower today, 22 July 2015, amid disappointing results from technology and industrial heavyweights in the US. Key benchmark indices in Singapore, Taiwan, Hong Kong, Japan and South Korea fell by 0.36% to 1.19%. Key benchmark indices in China and Indonesia rose 0.21% to 0.76%.
Chinese business sentiment fell sharply in July, suggesting that recent dramatic falls in company share prices had severely dented optimism. The MNI China Business Indicator fell 8.8% to 48.8 in July, below the 50 score which marks optimism. The reading matches the April level, which was the lowest since January 2009. The index had jumped 7.6% in June to 53.5. MNI, a part of Deutsche Bse Group, surveys 200 companies listed on the Shanghai and Shenzhen stock exchanges.
Trading in US index futures indicated a weak opening of US stocks later in the global day today, 22 July 2015, after Apple Inc.'s forecast disappointed investors. Trading in US index futures indicated that the Dow could slide 77 points at the opening bell. US stocks dropped yesterday, 21 July 2015 on weak earnings from bellwethers International Business Machines Corp. (IBM) and United Technologies Corp.
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