Shares of private sector banks, telecom companies and auto firms led losses as key equity benchmark indices edged lower on weakness in global stocks. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit 9-week closing low. Nevertheless, the benchmark indices staged a recovery from lower level after a sharp intraday slide. The Sensex dropped 241.75 points or 0.88% to settle at 27,366.07. The market breadth indicating the overall health of the market was weak. In overseas markets, Asian stocks tumbled as weak Chinese manufacturing data added to growing concerns over China's economic slowdown.
Metal and mining stocks edged lower after weak Chinese manufacturing data. Infosys edged higher after the company announced the launch of three enhanced service offerings in Design Thinking, Platforms and Knowledge-Based IT. Realty stocks edged lower. Tata Motors edged lower after the company announced that most of the Jaguar Land Rover vehicles recently shipped to Tianjin in China may have been damaged due to explosions at the Tianjin port.
Shares of upstream oil exploration & production (E&P) firms dropped along with decline in crude oil prices. Shares of public sector oil marketing companies (PSU OMCs) dropped as the rupee edged lower against the dollar.
Key indices edged lower for the second straight trading session today, 21 August 2015.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 958.53 crore into the secondary equity market yesterday, 20 August 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) bought shares worth a net Rs 567.87 crore yesterday, 20 August 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged lower as weak Chinese manufacturing data triggered sell-off in Asian stocks. Chinese stocks led losses for Asian markets after a flash purchasing managers' index showed Chinese manufacturing activity shrank for a sixth straight month in August. US stocks suffered their worst selloff in 2015 yesterday, 20 August 2015, as markets were buffeted by worries about a slowdown in global growth.
The S&P BSE Sensex lost 241.75 points or 0.88% to settle at 27,366.07, its lowest closing level since 19 June 2015. The index fell 476.38 points at the day's low of 27,131.44 in early trade, its lowest level since 18 June 2015. The index fell 165 points at the day's high of 27,442.82 at the onset of the trading session.
The CNX Nifty fell 72.80 points or 0.87% to settle at 8,299.95, its lowest closing level since 19 June 2015. The index hit a low of 8,225.05 in intraday trade. The index hit a high of 8,322.20 in intraday trade.
The BSE Mid-Cap index fell 101.23 points or 0.89% to settle at 11,216.65. The decline in this index was higher than the Sensex's decline in percentage terms. The BSE Small-Cap index dropped 70.37 points or 0.6% to settle at 11,610.44. The decline in this index was lower than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was weak. On BSE, 1,811 shares declined and 1,000 shares rose. A total of 94 shares were unchanged.
The total turnover on BSE amounted to Rs 3451 crore, higher than turnover of Rs 3354.59 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Auto index (down 2.07%), BSE Bankex index (down 1.28%), BSE Capital Goods index (down 1.76%), BSE Metal index (down 0.93%), BSE Oil & Gas index (down 0.97%), BSE Power index (down 1%) and BSE Realty index (down 2.55%) underperformed the Sensex. The S&P BSE FMCG index (up 0.11%), BSE Healthcare index (up 0.02%), BSE IT index (up 0.37%), BSE Consumer Durables index (down 0.38%) and BSE Teck index (down 0.12%) outperformed the Sensex.
Shares of public sector banks (PSU banks) edged lower. Central Bank of India (down 7.57%), Bank of India (down 1.8%), Corporation Bank (down 1.75%), Oriental Bank of Commerce (down 1.75%), State Bank of India (down 1.13%), Indian Overseas Bank (down 0.79%), Bank of Baroda (down 0.77%), Union Bank of India (down 0.72%), United Bank of India (down 0.65%) and Syndicate Bank (down 0.3%) edged lower. Canara Bank (up 0.41%), Punjab National Bank (up 0.47%) and IDBI Bank (up 0.9%) edged higher.
The finance ministry yesterday, 20 August 2015, announced that Executive Directors of Nationalised Banks, DMDs of IDBI Bank and MDs of Associate Banks of State Bank of India (SBI) who have risen from the Associate Bank services, with one year of service as ED/DMD/MD and who have two years remaining service are eligible for selection as MD & CEO of PSU banks other than the five large PSU banks. Meanwhile, as per the guidelines approved by the Appointments Committee of Cabinet (ACC), General Managers of nationalized Banks and CGMs of Associate Banks of SBI who have risen from the Associate Banks service, and who have completed two years of service are eligible for consideration for the post of Executive Director of nationalized banks.
Shares of private sector banks also declined. Yes Bank (down 3.88%), IndusInd Bank (down 2.7%), Axis Bank (down 1.67%), HDFC Bank (down 1.27%), Kotak Mahindra Bank (down 1.09%) and ICICI Bank (down 0.74%) edged lower.
Metal and mining stocks edged lower after weak Chinese manufacturing data. Vedanta (down 3.81%), National Aluminium Company (down 3.34%), Tata Steel (down 1.82%), JSW Steel (down 1.53%), Hindustan Zinc (down 1.47%), Steel Authority of India (down 1.34%) and NMDC (down 0.96%) edged lower. Jindal Steel & Power (up 3.97%) and Hindalco Industries (up 1.24%) edged higher. China is the world's largest consumer of copper, steel and aluminium.
Shares of coal major Coal India lost 0.39% at Rs 348.70. The stock hit a high of Rs 353.05 and a low of Rs 345.70 in intraday trade.
Infosys edged higher after the company after market hours yesterday, 20 August 2015, announced the launch of three enhanced service offerings in Design Thinking, Platforms and Knowledge-Based IT. The stock rose 1.09% at Rs 1,150.60. The stock hit a high of Rs 1,159.40 and a low of Rs 1,119.10 in intraday trade. Infosys announced that its new service offerings are aimed at helping clients address a non-disruptive renewal and simplification of their existing landscapes. These services will also help clients in introduction of new offerings and business models in a dynamic business environment and create a culture of innovation in their organization, Infosys said in a statement. These three new service offerings will help bring together existing Infosys services to serve strategic priorities of global businesses, the Indian IT major said.
Infosys also plans to offer platforms to address the Internet of Things (IoT) and Application Programming Interface (API) requirements of its clients. Dr. Vishal Sikka, Chief Executive Officer, Infosys said that the launch of the three new service offerings is an important step to further accelerate the execution of the company's strategy to renew existing services and move into entirely new areas.
Tech Mahindra rose 0.62% at Rs 563. The stock hit a high of Rs 568.75 and a low of Rs 545.50 in intraday trade. Tech Mahindra and Mahindra Finance announced in a joint statement issued after market hours yesterday, 20 August 2015, that the Reserve Bank of India (RBI) has granted in-principle approval to Tech Mahindra to setup a payments bank. The payments bank will be operated as an equal joint venture between Tech Mahindra and Mahindra Finance.
Lupin dropped 0.88% at Rs 1,875.40. The stock hit a high of Rs 1,918.40 and a low of Rs 1,853.85 in intraday trade. Lupin after market hours yesterday, 20 August 2015, announced that the company has received final approval from the United States Food and Drugs Administration (USFDA) for its Fenofibrate Tablets 54 mg and 160 mg, a generic version of Teva's Fenofibrate Tablets, 54 mg and 160 mg. Lupin's US subsidiary, Lupin Pharmaceuticals Inc. would commence promoting the product shortly in the US. The drug is indicated as an adjunct to diet to reduce elevated LDLC, Total-C, TG and Apo B, and to increase HDL-C in adult patients with primary hypercholesterolemia or mixed dyslipidemia and for treatment of adult patients with severe hypertriglyceridemia.
Fenofibrate Tablets 54 mg and 160 mg clocked annual sales of $156 million in the United States, as per IMS MAT June 2015 data.
Realty stocks edged lower. Godrej Properties (down 5.35%), Oberoi Realty (down 4.96%), DLF (down 5.08%), Sobha (down 2.41%), Prestige Estates Projects (down 2.15%), Housing Development & Infrastructure (down 1.7%) and Unitech (down 0.44%) edged lower. Indiabulls Real Estate (up 1.71%) and D B Realty (up 3.49%) edged higher.
Auto stocks edged lower. Hero MotoCorp (down 2.81%), Bajaj Auto (down 3.4%), Eicher Motors (down 2.66%), Maruti Suzuki India (down 1.35%), TVS Motor Company (down 0.78%), Mahindra & Mahindra (down 1.17%) and Ashok Leyland (down 0.63%) edged lower.
Tata Motors edged lower after the company announced that most of the Jaguar Land Rover vehicles recently shipped to Tianjin in China may have been damaged due to explosions at the Tianjin port. The stock lost 2.73% at Rs 332.75. Tata Motors' British luxury car unit Jaguar Land Rover (JLR) in a press release issued yesterday, 20 August 2015, announced that at the time of explosions in Tianjin in China, approximately 5,800 vehicles of JLR that had recently been shipped to China were stored at various locations at Tianjin port. JLR believes that many of these vehicles may have been damaged. However, access to facilities near the site of the explosion remains restricted and therefore it is presently unable to quantify the number of units affected due to the explosion, JLR said. JLR said it will continue to monitor the situation and work to minimise the impact on its customers and the business. Tata Motors made the announcement during market hours today, 21 August 2015.
Shares of upstream oil exploration & production (E&P) firms dropped along with decline in crude oil prices. Reliance Industries (down 1.26%), Cairn India (down 0.32%) and Oil India (down 0.77%) edged lower. ONGC (up 0.02%) edged higher. Lower crude oil prices will result in lower realization from crude sales for oil exploration firms.
Shares of public sector oil marketing companies (PSU OMCs) dropped as the rupee edged lower against the dollar. HPCL (down 1.14%) and Indian Oil Corporation (down 0.7%) edged lower. Decline in crude oil prices will reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government 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 decontrolled pricing of petrol and diesel.
Shares of BPCL edged lower on reports that a foreign brokerage has maintained underperform rating on the stock. The stock declined 1.32% at Rs 889.85. The foreign brokerage has reportedly pointed out in a research report that weak global crude oil prices may force write-off in value of BPCL's deepwater assets in Brazil and Mozambique. The brokerage also is worried about BPCL's recent market share loss in diesel, possibly to private players. The research report also notes that there is potential of large inventory loss arising from fall in Brent crude price in Q2 September 2015 so far. The brokerage has also reportedly pointed out decline in all key refining product spreads as another near term concern for the stock.
Key indices edged lower for the second straight trading session today, 21 August 2015. The Sensex has declined 565.57 points or 2.02% in the preceding two trading sessions from a recent high of 27,931.64 on 19 August 2015. The Sensex has declined 748.49 points or 2.66% in this month so far (till 21 August 2015). The Sensex has fallen 133.35 points or 0.48% in this calendar year so far (till 21 August 2015). From a 52-week low of 25,910.77 on 17 October 2014, the Sensex has risen 1,455.30 points or 5.61%. The Sensex is off 2,658.67 points or 8.85% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, in the global commodities markets, Brent crude oil futures edged lower after weak Chinese manufacturing data. Brent for October settlement was currently off 38 cents at $46.24 a barrel. The contract had declined 54 cents or 1.14% to settle at $46.62 a barrel during the previous trading session.
India imports about 80% of its crude requirements and a decline in crude prices 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. State-run oil marketing companies have been cutting petrol and diesel prices on the back of falling international prices. Lower diesel prices will reduce transportation costs which in turn will reduce fuel price inflation. Diesel is a key transportation fuel.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 65.8525, compared with close of 65.55 during the previous trading session.
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, 20 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 20 August 2015. Region wise, the rainfall was 20% below the LPA in South Peninsula, 10% below the LPA in Central India, 7% below the LPA in East & Northeast India and 1% below the LPA in Northwest India until 20 August 2015.
Separately, the IMD in its weekly report said that as per its extended range forecast till 8 September 2015, above normal rainfall activity is likely over northeast and adjoining east India on many days till beginning of September. Normal rainfall activity likely over south peninsula during the period from 20 to 24 August and 4 to 8 September 2015, the IMD said. Below normal rainfall activity is likely over plains of northwest and central India, 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.
In overseas markets, European stocks edged lower today, 21 August 2015, as weak Chinese manufacturing data triggered sell-off in Asian stocks. Key indices in France, Germany and UK were off 1.29% to 1.71%.
In Greece, Prime Minister Alexis Tsipras yesterday, 20 August 2015, resigned as the debt-troubled country's prime minister and called for a snap national election to be held within a month. In a televised address, Tsipras said he is seeking a "clear mandate for a strong government". The move is seen as a bid to get popular backing for the new Greek bailout deal, which imposes tough new austerity measures. The Greek government repaid 3.4 billion euros ($3.8 billion) to the European Central Bank using fresh eurozone funds yesterday, 20 August 2015.
Markit flash Eurozone PMI ticked higher in August as growth accelerated in Germany and outside of the big-two nations, latest data showed today, 21 August 2015. Flash Eurozone PMI Composite Index edged higher to 54.1 in August from 53.9 last month.
Markit Economics said today, 21 August 2015, that the latest flash France PMI data signalled that private sector output continued to rise in August. However, the rate of growth was modest and the slowest in four months. This was indicated by the seasonally adjusted Markit Flash France Composite Output Index, which was at 51.3, down slightly from 51.5 in July.
German consumer sentiment is set to weaken in September despite improved clarity about Greece's future, market research group GfK said in its monthly survey released today, 21 August 2015. The forward-looking GfK consumer sentiment index is expected to weaken to 9.9 points in September from 10.1 points in August.
Chinese stocks led losses for Asian markets today, 21 August 2015, after a flash purchasing managers' index showed Chinese manufacturing activity shrank for a sixth straight month in August. In mainland China, the Shanghai Composite was off 4.21%. In Hong Kong, the Hang Seng was off 1.53%.
The Caixin/Markit flash purchasing managers' index today, 21 August 2015, showed Chinese manufacturing activity shrank for a sixth straight month in August, falling to 47.1 from July's final reading of 47.8 and remaining below the threshold of 50 that separates expansion from contraction. August's reading was the lowest since March 2009.
In other Asian markets, key indices in Japan, Taiwan, South Korea, Singapore and Indonesia were off 1.92% to 3.02%.
US stocks suffered their worst selloff in 2015 yesterday, 20 August 2015, as markets were buffeted by worries about a slowdown in global growth. The number of Americans filing new applications for unemployment benefits unexpectedly rose last week. Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 277,000 for the week ended 15 August 2015, the Labor Department said yesterday, 20 August 2015.
US existing home sales climbed in July to their prerecession pace. Existing-home sales rose 2% last month from June to a seasonally adjusted rate of 5.59 million, the National Association of Realtors said yesterday, 20 August 2015.
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