Key benchmark indices extended gains in afternoon trade. The barometer index, the S&P BSE Sensex, was currently up 45.08 points or 0.16% at 27,616.46. The market breadth indicating the overall health of the market was positive. Meanwhile, in the global commodities markets, Brent crude oil futures edged lower on persistent worries about a global supply glut. The decline in crude oil prices augurs well for India. In overseas stock markets, Chinese stocks edged lower in volatile trade.
Cement stocks were mixed. Ambuja Cements dropped after the company reported weak Q2 earnings. Maruti Suzuki India edged higher after the company reported strong Q1 earnings. Thermax edged lower amid volatility after the company reported strong Q1 earnings. Union Bank of India shrugged off weak Q1 numbers.
Earlier during the session, key benchmark indices witnessed high intraday volatility. The Sensex had bounced back after hitting its lowest level in more than four weeks in morning trade. The 50-unit CNX Nifty had bounced back after hitting 2-1/2-week low in morning trade.
Indian stocks may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month July 2015 series to August 2015 series. The near month July 2015 derivatives contracts expire on Thursday, 30 July 2015.
Foreign portfolio investors sold shares worth a net Rs 859.94 crore yesterday, 27 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 238.66 crore yesterday, 27 July 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged higher today, 28 July 2015. Asian stocks were mixed. US stocks fell yesterday, 27 July 2015, after the steepest decline in Chinese stocks in eight years raised concerns that cooling growth in the world's No. 2 economy could hurt China's trading partners.
At 13:15 IST, the S&P BSE Sensex was up 45.08 points or 0.16% at 27,616.46. The index jumped 115.27 points at the day's high of 27,676.65 in morning trade. The index fell 55.63 points at the day's low of 27,505.75 in morning trade, its lowest level since 29 June 2015.
The Nifty was up 19.50 points or 0.23% at 8,380.50. The index hit a high of 8,397.40 in intraday trade. The index hit a low of 8,344.85 in intraday trade, its lowest level since 10 July 2015.
The BSE Mid-Cap index was up 38.19 points or 0.35% at 11,032.21. The BSE Small-Cap index was up 46.22 points or 0.4% at 11,589.33. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,396 shares rose and 1,081 shares fell. A total of 120 shares were unchanged.
Maruti Suzuki India (MSIL) edged higher after the company reported strong Q1 earnings. The stock was up 0.56% at Rs 4,199.70. The stock hit a high of Rs 4,243.90 and a low of Rs 4,152.50 so far during the day. MSIL's net profit rose 56.5% to Rs 1192.90 crore on 18.1% growth in net sales (net of excise) to Rs 13078.30 crore in Q1 June 2015 over Q1 June 2014. The result was announced during market hours today, 28 July 2015.
During the quarter, higher volumes, cost reduction efforts, lower sales promotional expenses, and favourable foreign exchange helped improve the performance, MSIL said in a statement.
Cement stocks were mixed. UltraTech Cement (up 0.7%) and Shree Cement (up 0.99%) edged higher. ACC (down 0.16%) edged lower.
Grasim Industries was up 1.41% at Rs 3,723.85. Grasim has exposure to cement sector through its holding in UltraTech Cement.
Ambuja Cements dropped after the company reported weak Q2 earnings. The stock was off 0.41% at Rs 233.35. The stock hit a high of Rs 237.25 and a low of Rs 227.60 so far during the day. Ambuja Cements' net profit fell 44.7% to Rs 226 crore on 7.9% decline in net sales to Rs 2493 crore in Q2 June 2015 over Q2 June 2014. The result was announced after market hours yesterday, 27 July 2015.
Ambuja Cements attributed the decline in bottom line during the quarter to lower operating EBITDA (earnings before interest, taxation, depreciation and amortization) and due to additional depreciation charge of Rs 22 crore on implementation of Schedule II of the Companies Act, 2013.
The company's operating EBITDA dropped 34.7% to Rs 384 crore in Q2 June 2015 over Q2 June 2014.
Ambuja Cements said that Q2 June 2015 witnessed muted cement demand. Sales volume increased marginally by 1.6% to 5.88 million tonnes in Q2 June 2015 over Q2 June 2014. However, due to decrease in selling price by approximately 10%, overall net sales value was lower by 7.9% in Q2 June 2015 over Q2 June 2014. Lower cost of input materials coupled with improved operational efficiencies has helped in reduction of overall costs, the company said. Nevertheless, these could not fully mitigate the impact of lower sales realisation, the company added.
With regard to future business outlook, Ambuja Cements said that mixed macro-economic indicators are pointing towards sluggish growth in cement demand in short term. With the onset of monsoon throughout the country, cement demand is expected to remain subdued in the next quarter, Ambuja Cements said. The long term outlook for cement demand remains positive due to Government's initiatives towards housing, concrete roads, smart cities and emphasis on infrastructure developments, the company said. Ambuja Cements said it would continue to focus on improving its performance.
Ambuja Cements' board of directors at its meeting held yesterday, 27 July 2015, approved the amalgamation of Dirk India, a 100% subsidiary of Ambuja Cements with the company, subject to necessary approvals.
Thermax edged lower amid volatility after the company reported strong Q1 earnings. The stock was off 0.66% at Rs 1,056.50. The stock hit a high of Rs 1,091 and a low of Rs 1,045 so far during the day. Thermax's net profit rose 49% to Rs 62 crore on 19% growth in operating revenue to Rs 1001 crore in Q1 June 2015 over Q1 June 2014. The result was announced during market hours today, 28 July 2015.
The company's order balance on 30 June 2015 stood at Rs 4275 crore, down 18% from Rs 5206 crore on 30 June 2014. Even as subdued market conditions continued, it improved order booking in Q1 June 2015 at Rs 877 crore, higher by 32% compared to Rs 662 crore in Q1 June 2014, Thermax said in a statement.
At a consolidated level, order booking for the Group stood at Rs 1020 crore on 30 June 2015, up from Rs 797 crore on 30 June 2014. It had an order balance of Rs 5537 crore on 30 June 2015, compared to Rs 5948 crore on 30 June 2014.
Union Bank of India shrugged off weak Q1 numbers. The stock was up 2.82% at Rs 158.50. The stock hit a high of Rs 160.80 and a low of Rs 151.35 so far during the day. Union Bank of India's net profit fell 21.88% to Rs 518.78 crore on 5.79% growth in total income to Rs 9043.17 crore in Q1 June 2015 over Q1 June 2014. The result was announced during market hours today, 28 July 2015.
The bank's provisions and contingencies rose 63.53% to Rs 642.41 crore in Q1 June 2015 over Q1 June 2014.
Union Bank of India's ratio of gross non-performing assets (NPAs) to gross advances stood at 5.53% as on 30 June 2015 compared with 4.96% as on 31 March 2015 and 4.27% as on 30 June 2014. The ratio of net NPAs to net advances stood at 3.08% as on 30 June 2015 as against 2.71% as on 31 March 2015 and 2.46% as on 30 June 2014.
Meanwhile, in the global commodities markets, Brent crude oil futures edged lower on persistent worries about a global supply glut. Brent for September settlement was currently off 63 cents at $52.84 a barrel. The contract had fallen $1.15 a barrel or 2.11% to settle at $53.47 a barrel during the previous trading session.
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.
Meanwhile, India's weather office, the India Meteorological Department (IMD), said in its daily monsoon update issued yesterday, 27 July 2015, that the Southwest Monsoon was vigorous over Rajasthan and Gujarat state and was active over Gangetic West Bengal, Odisha and West Madhya Pradesh during the past 24 hours until 8:30 IST.
For the country as a whole, cumulative rainfall during this year's monsoon season was 4% below the Long Period Average (LPA) until 27 July 2015. Region wise, the rainfall was 15% below the LPA in South Peninsula, 7% below the LPA in East & Northeast India, 5% below the LPA in Central India and 11% above the LPA in Northwest India until 27 July 2015.
The quantum of and the spatial distribution of rainfall this month holds key; July accounts for about 33% of precipitation during the June-September monsoon season and is critical for 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 edged higher today, 28 July 2015. Key indices in Germany, France and UK were up 0.38% to 0.52%. Chinese shares edged lower in volatile trade today, 28 July 2015. In mainland China, the Shanghai Composite was currently off 1.68%. In Hong Kong, the Hang Seng index was up 1.22%. China's central bank People's Bank of China today, 28 July 2015, announced that it would inject 50 billion yuan ($8.05 billion) into money markets in its biggest liquidity boost since 7 July 2015. The central bank also said in a statement before the stock market opened that it would use "various monetary tools" to maintain "appropriate levels of liquidity", a signal that the further monetary easing could be in store. The Shanghai Composite Index fell 8.5% yesterday, 27 July 2015, marking its biggest one day drop in more than eight years.
In other Asian markets, key benchmark indices in South Korea and Taiwan were up 0.01% to 0.3%. Key benchmark indices in Japan, Singapore and Indonesia and were off 0.1% to 1.1%.
US stocks fell yesterday, 27 July 2015, after the steepest decline in Chinese stocks in eight years raised concerns that cooling growth in the world's No. 2 economy could hurt China's trading partners. Market reaction to better-than-expected durable-goods orders also was negative, as investors continued to view each data-point as a factor in the Federal Reserve's decision about the timing and pace of interest rate hikes.
Meanwhile, a two-day policy meeting of the Federal Reserve Open Market Committee (FOMC) begins today, 28 July 2015. The US central bank is widely expected to keep interest rates at a record low at the meeting, but expectations are rising that a rate hike could come later this year.
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