Volatility ruled the roost as key benchmark indices recovered from lower level in morning trade. The barometer index, the S&P BSE Sensex, was currently trading below the psychological 28,000 mark after falling below that level at onset of the trading session as key equity benchmark indices in Indian opened with a downward gap after people of Greece yesterday, 5 July 2015, voted against accepting further austerity in exchange for a new European bailout, increasing the chances of the country having to abandon the euro. The Sensex was currently off 229.92 points or 0.82% at 27,862.87. The market breadth indicating the overall health of the market was negative.
Bank stocks fell. Kotak Mahindra Bank rose on reports the Foreign Investment Promotion Board (FIPB) on Friday, 3 July 2015, cleared the bank's proposal to raise foreign investment limit to 55% from 49%. State-run oil marketing companies (PSU OMCs) rose as global crude oil prices fell.
Meanwhile, the monsoon has entered a weak phase if the data released by the India Meteorological Department (IMD) is any indication
Earlier, the Sensex hit its lowest level in almost a week amid initial volatility.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 356.29 crore during the previous trading session on Friday, 3 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 220.61 crore on Friday, 3 July 2015, as per provisional data released by the stock exchanges.
In overseas markets, Asian stocks edged lower today, 6 July 2015, as Greece voted against accepting further austerity, increasing the risk of the country's exit from the euro zone.
At 10:18 IST, the S&P BSE Sensex was down 229.92 points or 0.82% at 27,862.87. The index lost 317.99 points at the day's low of 27,774.80 in early trade, its lowest level since 30 June 2015. The index fell 146.11 points at the day's high of 27,946.68 in early trade.
The CNX Nifty was down 63.30 points or 0.75% at 8,421.60. The index hit a low of 8,386.15 in intraday trade, its lowest level since 1 July 2015. The index hit a high of 8,443.80 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,050 shares declined and 923 shares rose. A total of 72 shares were unchanged.
The BSE Mid-Cap index was off 37.36 points or 0.34% at 10,832.64. The BSE Small-Cap index was off 17.48 points or 0.15% at 11,286.10. The decline in both these indices was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 610 crore by 10:15 IST compared with Rs 210 crore by 09:30 IST.
Bank stocks fell. Among PSU bank stocks, State Bank of India (SBI) (down 1.47%), Punjab National Bank (down 0.95%), Bank of Baroda (down 0.93%), Canara Bank (down 1.15%), Bank of India (down 0.83%) and Union Bank of India (down 2.01%) dropped.
Among private bank stocks, HDFC Bank (down 0.65%), ICICI Bank (down 2.04%), Axis Bank (down 1.2%), IndusInd Bank (down 1.72%) and Yes Bank (down 1.19%) declined.
Kotak Mahindra Bank rose 1.45%. As per reports, the Foreign Investment Promotion Board (FIPB) on Friday, 3 July 2015 cleared the bank's proposal to raise foreign investment limit to 55% from 49%. Kotak Mahindra Bank had approached FIPB after the Reserve Bank of India barred overseas investments in the bank as foreign shareholding hit the permissible threshold following the merger of ING Vysya Bank with Kotak Mahindra Bank.
Shares of state-run oil marketing companies (PSU OMCs) rose after a sharp drop in crude oil prices. HPCL (up 1.81%), BPCL (up 3.05%) and Indian Oil Corporation (up 1.51%) edged higher.
In global commodities markets, Brent crude oil futures edged lower after Greece rejected austerity measures demanded in return for bailout money, increasing the chances of the country having to abandon the euro. Brent for August settlement was currently off 75 cents at $59.57 a barrel.
Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. 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. The government has already freed pricing of petrol and diesel.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 63.605, compared with close of 63.4375 during the previous trading session on Friday, 3 July 2015.
Meanwhile, the monsoon has entered a weak phase if the data released by the India Meteorological Department (IMD) is any indication. For the country as a whole, cumulative rainfall during this year's monsoon season was near normal until 5 July 2015. Region wise, the southwest monsoon was 5% above the Long Period Average (LPA) in Northwest India, 2% above the LPA in Central India, 2% above the LPA in South Peninsula and 4% below the LPA in East & Northeast India until 5 July 2015.
The IMD said in its daily monsoon update issued yesterday, 5 July 2015, that the Southwest Monsoon was active over Arunachal Pradesh and Sub-Himalayan West Bengal & Sikkim and Normal over Assam & Meghalaya, Gangetic West Bengal, Jharkhand, Bihar and Coastal Karnataka during past 24 hours ending at 08:30 IST.
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, the weekly data released by the Ministry of Agriculture after trading hours on Friday, 3 July 2015, showed that the sowing of Kharif crops is gathering pace. The total sown area for Kharif crops as on 3 July 2015 stood at 306.06 lakh hectares compared with 194.25 lakh hectares at this time last year.
Asian stocks edged lower today, 6 July 2015, as Greece voted against accepting further austerity, increasing the risk of the country's exit from the euro zone. Key benchmark indices in Singapore, Taiwan, Hong Kong, Japan, Indonesia and South Korea fell by 0.79% to 3.18%.
In China, the Shanghai Composite index rose 2.16% after China's government and central bank launched a wave of drastic policies over the weekend to help save the markets, including the People's Bank of China vowing "liquidity support" to the state-backed margin-finance entity, as well as a reported suspension of initial public offerings.
Trading in US index futures indicated that the Dow could slide 182 points at the opening bell today, 6 July 2015. US markets were closed on Friday, 3 July 2015 in observance of the Independence Day holiday.
In Europe, Greeks yesterday, 5 July 2015, overwhelmingly voted against their international creditors' conditions for further bailout aid, in a result that could deepen the rift between Greece and the rest of Europe and push the country closer to bankruptcy and an exit from the euro. More than 61% of Greeks voted no in Sunday's referendum on austerity measures and other overhauls that European and International Monetary Fund officials had demanded in recent talks.
Meanwhile, the European Central Bank's Governing Council is reportedly due to meet in Paris today, 6 July 2015, to discuss on whether to keep supporting Greece's lenders. Separately, European Union leaders have also reportedly called a euro-area summit tomorrow, 7 July 2015, to discuss their next move as investors fear "Grexit" could encourage anti-euro sentiment in other countries.
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