Intraday volatility continued as key benchmark indices once again slipped into the red from green after reversing intraday losses in morning trade. The market breadth indicating the overall health of the market was positive. The barometer index, the S&P BSE Sensex, was currently off 72.01 points or 0.26% at 27,889.18. Meanwhile, in global commodities markets, Brent crude oil prices edged lower as the market awaited a nuclear deal between Iran and six global powers that could see an easing of sanctions against Tehran and a gradual increase in its oil exports.
Shares of public sector oil companies (PSU OMCs) rose as crude oil prices edged lower. Shares of upstream oil companies declined along with crude oil prices. Capital goods stocks gained.
On macro front, the rate of inflation based on the consumer price index (CPI) accelerated to 5.4% in June 2015 from 5.01% in May 2015, data released by the government after trading hours yesterday, 13 July 2015, showed.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 527.98 crore yesterday, 13 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 171.55 crore yesterday, 13 July 2015, as per provisional data released by the stock exchanges.
In overseas stock markets, Asian stocks were mixed. US stocks closed sharply higher yesterday, 13 July 2015, as investors were relieved that Greece and its creditors reached an agreement for a third bailout program, averting a potential 'Grexit'.
At 11:17 IST, the S&P BSE Sensex was down 72.01 points or 0.26% at 27,889.18. The index lost 88.95 points at the day's low of 27,872.24 in mid-morning trade. The index gained 33.85 points at the day's high of 27,995.04 at the onset of the trading session.
The 50-unit CNX Nifty was down 24.25 points or 0.29% at 8,435.40. The index hit a low of 8,429.90 in intraday trade. The index hit a high of 8,470.60 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,380 shares gained and 955 shares fell. A total of 102 shares were unchanged.
The BSE Mid-Cap index was up 26.88 points or 0.24% at 11,054.29. The BSE Small-Cap index was up 49.88 points or 0.43% at 11,530. Both these indices outperformed the Sensex.
Shares of public sector oil companies (PSU OMCs) rose as crude oil prices edged lower. Indian Oil Corporation (up 1.01%), BPCL (up 1.06%) and HPCL (up 1.21%) edged higher.
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.
Shares of upstream oil companies declined along with crude oil prices. ONGC (down 0.24%), Oil India (down 0.52%), Reliance Industries (RIL) (down 0.6%) declined. Cairn India rose 0.67%. Lower crude oil prices would result in lower realizations from crude sales for oil exploration firms
Capital goods stocks gained. BEML (up 0.22%), Bharat Heavy Electricals (Bhel) (up 1.11%), Havells India (up 1.36%), ABB India (up 0.31%), Bharat Electronics (up 1.57%), L&T (up 0.45%), Thermax (up 0.93%), and Siemens (up 1.47%) gained.
Meanwhile, in global commodities markets, Brent crude oil prices edged lower as the market awaited a nuclear deal between Iran and six global powers that could see an easing of sanctions against Tehran and a gradual increase in its oil exports. Brent for August settlement was currently off 60 cents at $57.25 a barrel. The contract had declined 88 cents or 1.49% to settle at $57.85 a barrel during the previous trading session. The August Brent contract is set to expire on 16 July 2015. Brent for September settlement was currently off 53 cents at $57.62 a barrel.
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 63.5475, compared with its close of 63.515 yesterday, 13 July 2015.
On macro front, the rate of inflation based on the consumer price index (CPI) accelerated to 5.4% in June 2015 from 5.01% in May 2015, data released by the government after trading hours yesterday, 13 July 2015, showed. The increase in CPI was driven by food price inflation. Consumer Food Price Index (CFPI) surged to 5.48% in June 2015 from 4.8% in May 2015.
The government is scheduled to release data inflation based on the wholesale price index (WPI) for June 2015 at around 12:00 noon today, 14 July 2015. WPI inflation stood at negative 2.4% in May 2015, compared with a reading of negative 2.65% in April 2015.
Meanwhile, India's weather office, the India Meteorological Department (IMD), said in its daily monsoon update issued yesterday, 13 July 2015, that the Southwest Monsoon was active over West Uttar Pradesh, Haryana, Chandigarh & Delhi, Punjab and Jammu & Kashmir during past 24 hours ending until 8:30 IST.
For the country as a whole, cumulative rainfall during this year's monsoon season was 3% below the Long Period Average (LPA) until 13 July 2015. Region wise, the southwest monsoon was 26% above the LPA in Northwest India, 7% below the LPA in East & Northeast India, 8% below the LPA in Central India and 12% below the LPA in South Peninsula and until 13 July 2015.
The quantum of and the spatial distribution of rainfall this month holds key, with July being a crucial month for the sowing of Kharif 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, Asian stocks were mixed today, 14 July 2015. Key benchmark indices in Japan, Singapore, Taiwan and Indonesia were up 0.09% to 1.3%. In South Korea, the Seoul Composite was off 0.12%.
Chinese stocks edged lower. In mainland China, the Shanghai Composite was off 1.17%. In Hong Kong, the Hang Seng index was off 1.04%.
US stocks closed sharply higher yesterday, 13 July 2015, as investors were relieved that Greece and its creditors reached an agreement for a third bailout program, averting a potential 'Grexit'.
In Europe, the Syriza party led coalition government in Greece faces a tough battle to win support in the country for a third bailout. Greece and its creditors yesterday, 13 July 2015, reached an agreement for a third bailout program for cash-strapped Greece, averting a potential 'Grexit'. After a 17-hour meeting, eurozone leaders agreed on a package of reform measures in principle for the debt-laden country, paving the way for formal negotiations on financial aid through the eurozone's bailout fund, the European Stability Mechanism, or ESM. The bailout is conditional on Greece passing all the agreed reforms - including raising tax revenue and liberalising the labour market - in parliament by Wednesday, 15 July 2015. If the deal fails, Greece's banks face collapse and the country could then be forced to leave the euro.
The left-wing Syriza party won elections in January on a promise to end austerity. Greece has already received two bailouts totalling euro 240bn since 2010. Greek banks have been closed for two weeks, with withdrawals at cash machines limited to 60 euro per day, and will remain closed until after Wednesday, 15 July 2015.
Parliaments in several eurozone states also have to approve the bailout deal for Greece.
Meanwhile, finance ministers from all 28 European Union countries are holding a scheduled meeting in Brussels today, 14 July 2015, where they will discuss the situation in Greece.
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