Key benchmark indices extended gains in mid-afternoon trade, with the 50-unit CNX Nifty hitting two-week high and the barometer index, the S&P BSE Sensex, hitting its highest level in almost two weeks. The Sensex was currently up 125.34 points or 0.44% at 28,348.42. The market breadth indicating the overall health of the market was negative. Meanwhile, retirement fund manager Employees Provident Fund Organisation (EPFO) will reportedly start investing in the stock market through the exchange-traded funds (ETFs) route starting today, 6 August 2015. In overseas markets, European stocks edged higher in choppy trade. Asian stocks edged lower as jitters about China's economy and upcoming US jobs data kept buying appetite in check.
Metal and mining stocks were mixed. Bank stocks rose. Shares of state-run Punjab National Bank edged higher in volatile trade after the bank announced a reduction in interest rates on domestic term deposits, NRE term deposits and PNB Tax Saver Fixed deposits from 10 August 2015.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 447.90 crore yesterday, 5 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 189.11 crore yesterday, 5 August 2015, as per provisional data.
In overseas markets, European stocks edged higher in choppy trade. Asian stocks edged lower as jitters about China's economy and upcoming US jobs data kept buying appetite in check. US stocks closed mostly higher yesterday, 5 August 2015, in a choppy day of trading as investors digested conflicting economic data.
At 14:21 IST, the S&P BSE Sensex was up 125.34 points or 0.44% at 28,348.42. The index jumped 125.96 points at the day's high of 28,349.04 in mid-afternoon trade, its highest level since 24 July 2015. The index fell 59.39 points at the day's low of 28,163.69 in early afternoon trade.
The 50-unit CNX Nifty was up 23.10 points or 0.27% at 8,591.05. The index hit a high of 8,599.65 in intraday trade, its highest level since 23 July 2014. The index hit a low of 8,551.50 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,444 shares declined and 1,370 shares rose. A total of 111 shares were unchanged.
The BSE Mid-Cap index was up 30.87 points or 0.27% at 11,575.33. The BSE Small-Cap index was up 24.88 points or 0.21% at 12,160.89. Both these indices underperformed the Sensex.
Metal and mining stocks were mixed. JSW Steel (up 1.92%), Vedanta (up 0.16%), Steel Authority of India (Sail) (up 2.4%), National Aluminium Company (up 1.81%), Hindalco Industries (up 0.88%), NMDC (up 0.93%) edged higher. Hindustan Copper (down 0.84%), Hindustan Zinc (down 0.16%) and Jindal Steel & Power (down 0.32%) fell.
Tata Steel dropped fell 0.15% to Rs 261.85. The stock hit high of Rs 265.45 and low of Rs 256.50 so far during the day. Tata Steel after market hours yesterday, 5 August 2015, said in its update of recent developments that while stoppage of despatches from the company's Noamundi iron ore mine in Jharkhand owing to differences with Jharkhand state government will financially impact the company till the matter is resolved, the company has taken all measures to ensure that operations of its Jamshedpur steel plant are unaffected by the actions of the state government and the company remains committed to its customers and other stakeholders.
Tata Steel's captive iron ore mining leases in Odisha have been extended till 2030 in accordance with the provisions of the MMDR Amendment Act, 2015. However, the Government of Jharkhand has not yet allowed the execution of the supplementary lease deed for extension of the Noamundi iron ore mine in spite of several representations made by Tata Steel on the subject to the state government, the company said. The MMDR Amendment Act 2015 stipulates the extension of the captive mining leases up to 31 March 2030 from the date of expiry of the period of last renewal, Tata Steel said. Applying its own interpretation of the legislative and judicial pronouncements, Government of Jharkhand has stipulated certain onerous terms and conditions for allowing extension of the mining lease of Noamundi, which are not in conformity with MMDR Amendment Act 2015, Tata Steel said.
As the company did not accept the position taken by the Government of Jharkhand before and after promulgation of the MMDR Amendment Act 2015, the Department of Mines, Government of Jharkhand, has stopped the issuance of challans (forwarding notes) for despatch of iron ore from the company's Noamundi iron mine in Jharkhand to its steel plant at Jamshedpur. This has resulted in stoppage of despatches of iron ore from Noamundi to Jamshedpur steel plant. Tata Steel said it has decided to seek legal recourse to resolve this impasse.
With regard to developments in its European long products business, Tata Steel confirmed the negotiations about the potential sale of its European long products business and associated distribution facilities to Klesch Group have been discontinued. The company had been in talks with Klesch following the signing of a Memorandum of Understanding in October 2014, Tata Steel said. As of 2 August 2015, the long products business, with the associated distribution facilities, became a 100% subsidiary of Tata Steel UK, it added. With the hive down of the long products into a wholly owned subsidiary, the new structure will enable the company to evaluate and execute strategic options in the future, Tata Steel said.
On the issue of pension schemes in Tata Steel Europe, Tata Steel said that following the trade union recommendation to the members for the modification option changes to the British Steel Pension Scheme and the trade union members vote in support of this, Tata Steel UK, a subsidiary of Tata Steel confirms that the formal consultation with employees on the changes has been completed and that the trustee body and the company have made the amendments to the scheme to enable the benefit changes to be adopted.
On the issue of Stichting Pensioenfonds Hoogovens, Netherlands, Tata Steel said that on 7 July 2015, the execution agreement for the company's main pension scheme in the Netherlands, Stichting Pensioenfonds Hoogovens (SPH), was signed by Tata Steel's subsidiary Tata Steel Nederland BV and the SPH Board. The terms of this agreement will allow the scheme to be classified as a defined contribution scheme with effect from 7 July 2015 rather than defined benefit scheme, Tata Steel said.
Bank stocks rose. Among private bank stocks, HDFC Bank (up 0.63%), Kotak Mahindra Bank (up 1.75%), Axis Bank (up 0.64%) and Yes Bank (up 0.08%) edged higher. IndusInd Bank shed 0.22%.
ICICI Bank rose 0.1%. ICICI Bank after market hours yesterday, 5 August 2015, said that the bank through its DIFC (Dubai) branch, priced an issuance of 5 year fixed rate notes to an aggregate principal amount of $500 million. The notes were offered only outside the United States to non-US persons under Regulation S of the US Securities Act of 1933, as amended. The notes carry a coupon of 3.125% and were offered at an issue price of 99.574.
Among PSU bank stocks, State Bank of India (SBI) (up 1.09%), Bank of Baroda (up 0.61%), Canara Bank (up 1.24%), Bank of India (up 2.56%), Union Bank of India (up 3.11%) and IDBI Bank (up 1.33%) gained.
Punjab National Bank (PNB) edged higher in volatile trade after the bank announced a reduction in interest rates on domestic term deposits, NRE term deposits and PNB Tax Saver Fixed deposits from 10 August 2015. The stock was up 2.04% at Rs 162.30. The stock hit a high of Rs 162.80 and a low of Rs 156.55 so far during the day. For domestic term deposits of less than Rs 1 crore, the interest rates have been reduced from 8.10% to 8% in the maturity bucket between 1 year and 2 year. The interest rates have been reduced from 8% to 7.75% in the maturity bucket of more than 2 years and less than 5 years. The interest rates have been reduced from 8% to 7.50% in the maturity bucket of greater than 5 years and less than 10 years.
The bank also reduced interest rates by between 25 basis points to 100 basis points for domestic term deposits ranging from Rs 1 crore to Rs 10 crore for different maturity buckets.
Meanwhile, retirement fund manager Employees Provident Fund Organisation (EPFO) will reportedly start investing in the stock market through the exchange-traded funds (ETFs) route starting today, 6 August 2015. As per the decision by the central board of EPFO, the retirement fund manager will reportedly invest up to 5% of its incremental corpus in ETFs in the fiscal year through 31 March 2016. News reports today, 6 August 2015, suggested that EPFO will invest in two ETFs viz. the SBI Nifty ETF and SBI Sensex ETF to start with.
Meanwhile, in the global commodities markets, Brent crude oil futures edged higher in choppy trade. Brent for September settlement was currently up 15 cents at $49.74 a barrel. The contract had declined 40 cents or 0.8% to settle at $49.59 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. 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 currently hovering at 63.775, compared with its close of 63.755 during the previous trading session.
Meanwhile, India's weather office, the India Meteorological Department (IMD) said in a daily report issued yesterday, 5 August 2015, that the Southwest Monsoon was vigorous over Marathawada and Vidarbha and active over Arunachal Pradesh, Assam & Meghalaya, Sub-Himalayan West Bengal & Sikkim, West Madhya Pradesh and Madhya Maharashtra during past 24 hours 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 5 August 2015. Region wise, the rainfall was 21% below the LPA in South Peninsula, 9% below the LPA in East & Northeast India, 4% below the LPA in Central India and 5% above the LPA in Northwest India until 5 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 higher in choppy trade today, 6 August 2015. Key benchmark indices in France and Germany were up 0.02% to 0.17%. In UK, the FTSE 100 fell 0.25%.
Greece's Prime Minister Alexis Tsipras reportedly said yesterday, 5 August 2015, that Greece was close to concluding a deal with lenders on a multi-billion-euro bailout, which he said would end doubts over its place in the euro zone. An accord must be settled -- or a bridge loan agreed -- by 20 August 2015, when a 3.5 billion euro debt payment to the European Central Bank (ECB) falls due.
Meanwhile, the Bank of England (BoE) is widely expected to keep its key policy rate unchanged at 0.5% after a monetary policy review today, 6 August 2015. Starting today, 6 August 2015, the BOE will publish minutes of the Monetary Policy Committee's deliberations alongside its monthly policy decision. The minutes, which include a record of how individual policymakers voted, are usually published with a two-week lag. The central bank will also publish its quarterly inflation report. BOE Governor Mark Carney and other senior officials will host a press conference to explain their latest thinking on policy and the economic outlook after the conclusion of the monetary policy meeting.
Asian stocks edged lower today, 6 August 2015, as jitters about China's economy and upcoming US jobs data kept buying appetite in check. Key benchmark indices in China, Indonesia, Taiwan, Hong Kong and South Korea fell by 0.57% to 1.09%. Key benchmark indices in Singapore and Japan rose 0.03% to 0.24%.
US stocks closed mostly higher yesterday, 5 August 2015, in a choppy day of trading as investors digested conflicting economic data. Activity in the services sector surged to a 10-year high of 60.3 in July, while private payroll growth was softer than expected. A report yesterday, 5 August 2015, showed that private employers added 185,000 jobs in July, down from the 229,000 jobs added in June. Meanwhile, the pace of growth in the US service sector soared in July, recording its best reading in a decade. The nonmanufacturing purchasing managers index rose to 60.3 in July from 56 in June, its highest reading since August 2005, the Institute for Supply Management said yesterday, 5 August 2015.
Federal Reserve Governor Jerome Powell yesterday, 5 August 2015, said that he was undecided about whether to support a rate hike when policy makers next meet in mid-September. Powell's remarks came after two Fed regional bank presidents have come out in favor of a September hike earlier this week.
The influential monthly US nonfarm payroll report for July 2015 is due tomorrow, 7 August 2015. The report will be scrutinized for clues to the strength of the labor-market recovery. Investors have been parsing economic data, from inflation to wages, for clues about when the Federal Reserve might raise rates.
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