Banking and power generation stocks led a steep slide in key benchmark indices. The barometer index, the S&P BSE Sensex, hit its lowest level in almost 34 weeks and the 50-unit CNX Nifty hit its lowest level in more than 33 weeks as these two key benchmark indices extended intraday losses in late trade. The Nifty provisionally settled below the psychological 8,000 mark. Earlier, the Nifty had regained the psychological 8,000 level after falling below that mark in mid-afternoon trade.
The broad market depicted weakness. There were more than two losers against every gainer on BSE. The barometer index, the S&P BSE Sensex, was provisionally off 480.12 points or 1.79% at 26,360.38. The BSE Mid-Cap index was off 1.78%. The BSE Small-Cap index was off 1.55%.
Index heavyweights Reliance Industries, ITC, HDFC, HDFC Bank, Infosys and L&T dropped. Auto stocks edged lower.
Meanwhile, the government's indirect tax revenue collections jumped 37.3% at Rs 49993 crore in May 2015 over May 2014, according to provisional figures released by the finance ministry after trading hours yesterday, 10 June 2015. India's current account deficit (CAD) narrowed sharply in Q4 March 2015 from Q3 December 2014, according to data released by the Reserve Bank of India (RBI) after trading hours yesterday, 10 June 2015.
In overseas stock markets, European shares edged higher following optimism over Greek financing talks. Asian stocks edged higher following overnight gains in US markets. US stocks jumped yesterday, 10 June 2015, after a weaker dollar boosted commodities and on fresh hopes that Greece's creditors will release more bailout cash.
Meanwhile, the World Bank Group has again revised down its growth forecast for the world economy to 2.8% this year, while developing countries are now projected to grow by 4.4%, it said in a statement issued yesterday, 10 June 2015. With an expected liftoff in US interest rates, borrowing will become more expensive for emerging and developing economies over the coming months, the World Bank said.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 482.11 crore yesterday, 10 June 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 788.06 crore yesterday, 10 June 2015, as per provisional data released by the stock exchanges.
As per provisional closing, the S&P BSE Sensex was down 480.12 points or 1.79% at 26,360.38. The index lost 491.57 points at the day's low of 26,348.93 in late trade, its lowest level since 17 October 2014. The index gained 159.64 points at the day's high of 27,000.14 at onset of the day's trading session, its highest level since 5 June 2015.
The CNX Nifty was down 159.30 points or 1.96% at 7,965.15. The index hit a low of 7,958.25 in intraday trade, its lowest level since 21 October 2014. The index hit a high of 8,163.05 in intraday trade, its highest level since 5 June 2015.
The market breadth indicating the overall health of the market was quite weak. There were more than two losers against every gainer on BSE. 1,847 shares declined and 790 shares rose. A total of 111 shares were unchanged.
The BSE Mid-Cap index was off 182.70 points or 1.78% at 10,088.07. The BSE Small-Cap index was off 167.57 points or 1.55% at 10,612.18. The fall in both these indices was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 2490 crore, higher than turnover of Rs 2075.62 crore registered during the previous trading session.
Index heavyweight Reliance Industries (RIL) dropped 2.86% to Rs 880. The stock hit high of Rs 908.95 and low of Rs 874. RIL is holding its 41st annual general meeting in Mumbai tomorrow, 12 June 2015.
Auto stocks dropped. Mahindra & Mahindra (M&M) (down 2%), Eicher Motors (down 2.2%), Ashok Leyland (down 2.37%), Maruti Suzuki India (down 1.03%), Bajaj Auto (down 1.38%) and Hero MotoCorp (down 0.74%) declined. TVS Motor Company rose 1.34%.
Tata Motors fell 3.46% on reports a foreign brokerage has cut its target price on the stock citing lower China volume growth. It has also cut FY 2017-18 earnings per share (EPS) by 11% factoring in lower China volume growth and a 50% contraction in Jaguar Land Rover's (JLR) China margin premium over other regions, as per reports.
Bank stocks edged lower. Among private bank stocks, HDFC Bank (down 1.77%), Kotak Mahindra Bank (down 4.72%), ICICI Bank (down 1.28%), IndusInd Bank (down 2.83%) and Yes Bank (down 3.53%) declined.
Axis Bank fell 3.24%. The Ministry of Urban Development after trading hours yesterday, 10 June 2015, announced that Axis Bank has decided to issue co-branded cards to the users of Kochi Metro for paying the fares. Axis Bank will issue co-branded cards to the users of Kochi Metro for paying the fares as well as using them for all kinds of merchandise including e-commerce, according to a statement from the Ministry of Urban Development. Axis Bank will install the required complex hardware and software for fare collection from passengers and in addition will pay Kochi Metro Rail (KMRL) a sum of Rs 208 crore over the next 10 years besides undertaking the entire maintenance of Automated Fare Collection (AFC) for ten years. KMRL will also be paid 0.2% of Axis Bank's gross revenues from the utlilisation of co-branded pre-paid cards outside Kochi Metro system. Axis Bank has formed a consortium of service providers and will soon start work on installing AFC system. KMRL is undertaking the metro rail project in Kochi, Kerala. Of the project length of 25.612 kms, 18 km is scheduled to be commissioned by June 2016 and the rest by June 2017.
Among PSU bank stocks, State Bank of India (SBI) (down 2.33%), Punjab National Bank (down 3.67%), Bank of Baroda (down 4.03%), Canara Bank (down 0.2%), Bank of India (down 2.52%) and Union Bank of India (down 4.79%) dropped.
Meanwhile, the government's indirect tax revenue collections jumped 37.3% at Rs 49993 crore in May 2015 over May 2014, according to provisional figures released by the finance ministry after trading hours yesterday, 10 June 2015. Central excise collections jumped 84.2% at Rs 21809 crore in May 2015 over May 2014. Customs collections rose 16% to Rs 15700 crore in May 2015 over May 2014. Service Tax collections rose 13.2% at Rs 12484 crore in May 2015 over May 2014.
Indirect tax collections jumped 39.2% to Rs 96128 crore during the two-month period April-May 2015 from Rs 69069 crore during the two-month period April-May 2014.
Responding to the indirect tax collection figures, Finance Minister Arun Jaitley said in a statement that the indirect tax collections reflect in part the effect of the additional measures taken by the government including the Central Excise increase on diesel and petrol, increase in clean energy cess, and the withdrawal of exemptions for motor vehicles and consumer durables. He said that even after taking-out the impact of these additional measures, indirect tax collections have shown an increase of 16.9% in May 2015 over May 2014; and by 12.6% for the two month period April-May 2015 over the same period last year i.e. April- May 2014. Jaitley further said that the underlying momentum in the economy is improving across all sectors including manufacturing as reflected in healthy excise collections during the first two months of the current financial year.
India's current account deficit (CAD) narrowed sharply to $1.3 billion or 0.2% of GDP in Q4 March 2015 from $8.3 billion or 1.6% of GDP in Q3 December 2014, according to data released by the Reserve Bank of India (RBI) after trading hours yesterday, 10 June 2015. On a year-on-year (y-o-y) basis, the CAD registered a small increase to $1.3 billion in Q4 March 2015 from $1.2 billion in Q4 March 2014. The sharp reduction in CAD in Q4 March 2015 on quarter-on-quarter (q-o-q) basis was primarily on account of lower trade deficit as net earnings through services and primary income (profit, dividend and interest) witnessed a decline on q-o-q basis, the RBI said.
The government is scheduled to unveil industrial production data for April 2015 tomorrow, 12 June 2015. Industrial output growth touched a five-month low of 2.1% in March from a revised 4.9% in February on the back of an across-the-board slowdown in production. On the same day, the government is scheduled to unveil the consumer price index (CPI) data for the month of May 2015. Consumer price index-based retail inflation eased to a four-month low of 4.87% in April from a revised 5.25% in March.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update yesterday, 10 June 2015, that the southwest monsoon has further advanced into remaining parts of South Interior Karnataka, Tamilnadu and southwest Bay of Bengal and some parts of North Interior Karnataka and Rayalaseema. The Southwest Monsoon has been vigorous over Assam & Meghalaya and active over Arunachal Pradesh, Sub-Himalayan West Bengal & Sikkim and Coastal Karnataka during past 24 hours, the IMD said.
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.
Meanwhile, Consumer Affairs and Food & Public Distribution Minister Ram Vilas Paswan today, 11 June 2015, said that increase in prices of pulses, mainly because of demand and supply gap, has been taken by the government seriously. The government is considering all possible measures to ensure availability of pulses at reasonable prices including its import, he said. Seeking active market intervention by state governments to keep prices of essential commodities under check, particularly pulses and edible oil, Paswan said his ministry has written to the state governments to make available these commodities through Civil Supplies Corporations/Cooperative Societies outlets, especially to economically weaker sections, at reasonable prices. State governments have also been requested to take strict action against hoarding of these items, according to a statement from the Ministry of Consumer Affairs, Food & Public Distribution. The Centre has convened a meeting of the States at the end of this month to discuss an action plan in this regard. Paswan said FCI has been asked to work out a plan for procurement of pulses and oil seeds from farmers on MSP and to adopt an aggressive paddy procurement plan in the regions where market prices generally rule below the MSP and distress sale is reported, especially in the states of Andhra, Telangana, Uttar Pradesh and West Bengal.
Meanwhile, the World Bank Group has again revised down its growth forecast for the world economy to 2.8% this year, while developing countries are now projected to grow by 4.4%, it said in a statement issued yesterday, 10 June 2015. With an expected liftoff in US interest rates, borrowing will become more expensive for emerging and developing economies over the coming months, the World Bank said. This process is expected to unfold relatively smoothly since the US economic recovery is continuing and interest rates remain low in other major global economies. However, there are considerable risks around this expectation, the World Bank's latest Global Economic Prospects report argues. Just as the initial announcement of US policy normalization caused turmoil in financial markets in 2013 - now referred to as the "taper tantrum" - the US Federal Reserve's first interest rate increase, or liftoff, since the global financial crisis could ignite market volatility and reduce capital flows to emerging markets by up to 1.8 percentage points of GDP, the report says.
In overseas stock markets, European shares edged higher today, 11 June 2015, following optimism over Greek financing talks. Key benchmark indices in UK, France and Germany were up by 0.47% to 0.77%.
German Chancellor Angela Merkel reportedly said yesterday, 10 June 2015 her goal is to keep Greece in the euro area. The chairman of euro zone finance ministers reportedly said a cash-for-reform deal with Athens was still possible in time for their June 18 meeting, with just a few issues remaining to be solved, but Greek counter-proposals were not yet satisfactory. Greece deferred a payment to the International Monetary Fund last week and needs to crack a deal or get another extension before its euro-area bailout package expires on 30 June 2015.
Meanwhile, Standard & Poor's Ratings Services has downgraded Greece's credit rating to triple-C, reflecting its view that the government will likely default on its commercial debt within the next 12 months, without an agreement with its creditors. S&P has a negative outlook for the rating, which was cut one notch. Triple-C is a highly speculative rating on S&P's scale.
Asian stocks edged higher today, 11 June 2015, following overnight gains in US markets. Key benchmark indices in Singapore, Hong Kong, Taiwan, China, Japan and South Korea rose by 0.04% to 1.68%. Indonesia's Jakarta Composite fell 0.1%.
A slew of data from China, including retail sales and industrial production, released today, 11 June 2015 broke a recent string of worse than expected figures from the world's second-largest economy. Value-added industrial output in China rose 6.1% in May from a year earlier, accelerating from 5.9% growth in April, data from the National Bureau of Statistics showed.
Retail sales grew 10.1% in May from a year earlier, accelerating slightly from a 10% increase in April. Fixed-asset investment in non-rural areas of China climbed 11.4% from a year earlier in the January-May period, compared with an increase of 12% for the first four months of the year.
South Korea's central bank today, 11 June 2015, cut its benchmark interest rate to a record low of 1.5% to support the economy, which faces a potential fresh blow from a deadly viral outbreak. The Bank of Korea's 25 basis point cut, the second this year, comes amid concerns that an outbreak of Middle East Respiratory Syndrome (MERS) may knock billions of dollars off economic output as consumers and foreign tourists worried about infection stay home.
US stocks jumped yesterday, 10 June 2015, after a weaker dollar boosted commodities and on fresh hopes that Greece's creditors will release more bailout cash.
A two-day meeting of the Federal Open Market Committee (FOMC) to review US monetary policy is scheduled on 16-17 June 2015.
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