Key benchmark indices hovered in a narrow range in positive terrain in mid-morning trade. The barometer index, the S&P BSE Sensex was currently up 131.34 points or 0.48% at 27,643.60. The market breadth indicating the overall health of the market was positive. The macro economic data announced after market hours yesterday, 12 August 2015, showing industrial production registered year-on-year growth of 3.8% in June 2015 and inflation based on the consumer price index (CPI) eased sharply last month to 3.78% from 5.4% in June 2015, have raised hopes that the Reserve Bank of India (RBI) may cut rates to strengthen economic growth. Firmness in Asian stocks also boosted sentiment.
Shares of steel makers fell for the third straight day after Chinese central bank's decision to devalue its tightly controlled currency. Tata Steel, Vedanta, Hindalco Industries, Hindustan Zinc and NMDC hit 52-week low. National Aluminium Company tumbled after announcing weak Q1 results.
In overseas markets, Asian stocks edged higher taking heart from a late recovery of US stocks overnight and from efforts by China's central bank to slow the sharp descent of the yuan. US stocks rebounded after a late recovery yesterday, 12 August 2015 after a early slide triggered by China weakening its currency again, spooking investors worried about a slowdown in the world's second-largest economy and its effects on global growth.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 1,855.02 crore yesterday, 12 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1223.80 crore yesterday, 12 August 2015, as per provisional data.
At 11:27 IST, the S&P BSE Sensex was up 131.34 points or 0.48% at 27,643.60. The index gained 278.84 points at the day's high of 27,791.10 in early trade. The index rose 102.14 points at the day's low of 27,614.40 in mid-morning trade.
The CNX Nifty was up 37.10 points or 0.44% at 8,386.55. The index hit a high of 8,429.50 in intraday trade. The index hit a low of 8,339.75 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,323 shares gained and 1,067 shares fell. A total of 88 shares were unchanged.
The BSE Mid-Cap index was up 93.50 points or 0.83% at 11,309.84, outperforming the Sensex. The BSE Small-Cap index was up 52.35 points or 0.45% at 11,717.08, underperforming the Sensex.
Shares of steel makers fell for the third straight day after Chinese central bank's decision to devalue its tightly controlled currency. Steel Authority of India (down 4.73%), JSW Steel (down 1.09%), and Jindal Steel & Power (down 5.84%) edged lower.
Tata Steel was down 3.93% to Rs 239.95, after hitting 52-week low of Rs 237.50 in intraday trade.
A devalued currency will make Chinese exports becoming cheaper. Dumping of cheaper steel products by China will hurt the Indian steel industry. The devaluation will also impact India's exports to China as a weaker yuan makes resources more expensive to Chinese buyers.
Shares of other metal and mining stocks also declined. Hindustan Zinc dropped 3.54% Rs 141.50, after hitting 52-week low of Rs 140.40 in intraday trade. .
Vedanta dropped 2.5% at Rs 111.05, after hitting 52-week low of Rs 110.25 in intraday trade.
Hindalco Industries lost 2.29% to Rs 93.70 after hitting 52-week low of Rs 92.90 in intraday trade.
NMDC lost 3.55% to Rs 96.25 after hitting 52-week low of Rs 95.90 in intraday trade. Adani Ports and Special Economic Zone will replace NMDC as a constituent from the 50-unit CNX Nifty index with effect from 28 September 2015. Adani Ports and Special Economic Zone gained 4.12%.
National Aluminium Company tumbled after announcing weak Q1 results. The stock slumped 7.64%. The net profit fell 39.68% to Rs 163.44 crore on 13.27% fall in total income to Rs 1622.03 crore in Q1 June 2015 over Q1 June 2014. The result was announced after market hours yesterday, 12 August 2015.
Coal India rose 0.59%. The company's consolidated net profit fell 6.66% to Rs 3764.35 crore on 4.93% fall in total income to Rs 20965.20 crore in Q1 June 2015 over Q1 June 2014. The result was announced after market hours yesterday, 12 August 2015.
Among macro economic data, industrial production registered year-on-year growth of 3.8% in June 2015, according to the data released by the Ministry of Statistics & Programme Implementation after trading hours yesterday, 12 August 2015. The cumulative growth in industrial production for the period April-June 2015 over the corresponding period of the previous year stands at 3.2%. The IIP growth for May 2015 was scaled down to 2.5% in the first revision compared with 2.7% reported provisionally. Meanwhile, the growth in March 2015 that was scaled up at first revision to 2.5% from 2.1% reported provisionally, has been retained nearly unchanged at 2.5% in final revision.
An improvement in the pace of growth of industrial production was driven entirely by more than doubling of growth in the output of manufacturing sector to 4.6% in June 2015 from 2% in May 2015. On the other hand, the mining sector output declined 0.3% after four months of consistent growth. The electricity generation growth eased to 1.3% in June 2015 from 6% in May 2015.
As per the use-based classification, the basic goods output increased 5.1% in June 2015 over a year ago. However, the output of capital goods declined 3.6%, while the intermediate goods output growth slowed down to 0.8%.The output of consumer goods increased at 32-month high pace of 6.6% in June 2015. Within consumer goods, the production of consumer durables zoomed 16%, while that of consumer non-durables also improved 1.3% in June 2015.
Due to a large base effect, inflation based on the consumer price index (CPI) eased sharply last month. CPI inflation eased to 3.78% in July 2015 from 5.4% in June 2015, according to the data released by the Ministry of Statistics & Programme Implementation after trading hours yesterday, 12 August 2015. Consumer Food Price Index (CFPI) eased to 2.15% in July 2015 from 5.48% in June 2015, the latest data showed.
The government will release data on inflation based on the wholesale price index (WPI) for July 2015 at around 12:00 noon tomorrow, 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.
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, 12 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 12 August 2015. Region wise, the rainfall was 20% below the LPA in South Peninsula, 12% below the LPA in East & Northeast India, 8% below the LPA in Central India and 2% above the LPA in Northwest India until 12 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.
Asian stocks edged higher today, 13 August 2015 taking heart from a late recovery of US stocks overnight and from efforts by China's central bank to slow the sharp descent of the yuan. Key indices in Hong Kong, South Korea, Indonesia, Taiwan, Japan and Singapore were up 0.25% to 2%. China's Shanghai Composite fell 0.62%.
China's central bank said today, 13 August 2015, that there is no basis for further depreciation in the yuan currency given strong economic fundamentals, in a bid to reassure jittery global financial markets after it devalued the currency earlier in the week. The People's Bank of China (PBOC) said that the country's strong economic environment, sustained trade surplus, sound fiscal position and deep foreign exchange reserves provide "strong support" to the exchange rate. China's yuan fell recent days after the PBOC shocked markets by pushing its official guidance rate down 2% on Tuesday, 11 August 2015 the sharpest adjustment in the history of China's foreign exchange market.
Japanese data released today, 13 August 2015, showed Japan's core machinery orders fell a greater-than-expected 7.9% in June, down for the first time in four months.
US stocks settled higher after a late recovery yesterday, 12 August 2015 from a early slide triggered by China weakening its currency again, spooking investors about a slowdown in the world's second-largest economy and its effects on global growth.
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