Mining, metal and banking stocks led losses for key benchmark indices, with the barometer index, the S&P BSE Sensex, falling below the psychological 28,000 mark. The Sensex and the 50-unit CNX Nifty, both, settled at their lowest level in almost two weeks. The Sensex fell 235.63 points or 0.84% to settle at 27,866.09. The broad market depicted weakness. There were almost two losers against every gainer on BSE. The BSE Small-Cap index fell 1.13%. The decline in this index was higher than the Sensex's decline in percentage terms.
The market sentiment was hit adversely after the opposition Congress party stalled a discussion on the goods and services tax (GST) bill in the Rajya Sabha, citing procedural issues. The market sentiment was also hit adversely by China's central bank devaluing the nation's currency by nearly 2%. In overseas markets, Asian and European stocks fell, with investors assessing China's unexpected devaluation of the yuan.
Banks stocks declined. State Bank of India (SBI) dropped in volatile trade after the bank's ratio of net non-performing assets to net advances increased to 2.24% as on 30 June 2015 from 2.12% as on 31 March 2015. Auto components major Bosch rose in volatile trade after declaring good Q1 result. Shares of steel makers fell after China's central bank moved to devalue its tightly controlled currency, stoking fears of Chinese exports becoming cheaper.
Telecom stocks declined. Realty stocks fell. Auto major Tata Motors extended yesterday's losses triggered by the company announcing weak Q1 results. IT stocks rose on a weak rupee.
Key benchmark indices fell for third day in a row today, 11 August 2015.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 67.03 crore from the secondary equity market yesterday, 10 August 2015, as per data from National Securities Depository (NSDL). Domestic institutional investors (DIIs) sold shares worth a net Rs 50.05 crore yesterday, 10 August 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks fell, with investors assessing China's unexpected devaluation of the yuan. Asian stocks edged lower after China's central bank moved to devalue its tightly controlled currency. US stocks surged yesterday, 10 August 2015, buoyed by remarks from one Federal Reserve official suggesting a September interest-rate hike may not be a done deal, as well as from a bounce-back in Chinese equities.
The S&P BSE Sensex fell 235.63 points or 0.84% to settle at 27,866.09, its lowest closing level since 30 July 2015. The index fell 275.89 points at the day's low of 27,825.83 in mid-afternoon trade. The index gained 103.40 points at the day's high of 28,205.12 at the onset of the trading session.
The Nifty fell 63.25 points or 0.74% to settle at 8,462.35, its lowest closing level since 30 July 2015. The index hit a low of 8,441.30 in intraday trade. The index hit a high of 8,556.25 in intraday trade.
The market breadth indicating the overall health of the market was quite weak. There were nearly two losers against every gainer on BSE. 1,900 shares declined and 990 shares rose. A total of 99 shares were unchanged.
The BSE Mid-Cap index fell 52.85 points or 0.46% to settle at 11,502.55. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index fell 135.95 points or 1.13% to settle at 11,919.04. The decline in this index was higher than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 3734 crore, higher than turnover of Rs 3104.69 crore registered during the previous trading session.
Among sectoral indices on BSE, the S&P BSE Metal index (down 3.52%), the S&P BSE Realty index (down 1.69%), the S&P BSE Bankex (down 1.53%), the S&P BSE Auto index (down 1.32%), the S&P BSE Capital Goods index (down 1.23%), the S&P BSE Oil & Gas index (down 1.11%) and the S&P BSE Power index (down 0.94%), underperformed the Sensex. The S&P BSE FMCG index (down 0.58%), the S&P BSE Consumer Durables index (down 0.41%), the S&P BSE Healthcare index (down 0.06%), the S&P BSE Teck index (up 0.91%) and the S&P BSE IT index (up 1.38%), outperformed the Sensex.
Banks stocks declined. Among private bank stocks, ICICI Bank (down 1.95%), Axis Bank (down 1%), Kotak Mahindra Bank (down 0.77%) and Yes Bank (down 2.25%) declined. IndusInd Bank (up 0.81%) and HDFC Bank (up 0.06%) rose.
Among PSU bank stocks, Punjab National Bank (down 1.73%), Bank of Baroda (down 2.17%), IDBI Bank (down 1.81%), Bank of India (down 3.55%) and Union Bank of India (down 0.87%) dropped. Canara Bank rose 0.6%.
State Bank of India (SBI) slumped 5.16% to Rs 268.50 after the bank's ratio of net non-performing assets to net advances increased to 2.24% as on 30 June 2015 from 2.12% as on 31 March 2015. The stock was volatile. The stock hit high of Rs 289.50 and low of Rs 268.25. SBI's net profit rose 10.25% to Rs 3692.43 crore on 9.79% growth in total income to Rs 44730.87 crore in Q1 June 2015 over Q1 June 2014. SBI's provisions and contingencies rose 14.38% to Rs 3999.73 crore in Q1 June 2015 over Q1 June 2014. The provisions and contingencies include provisions for non-performing assets. SBI's provisions for non-performing assets dropped 13.95% to Rs 3358.58 crore in Q1 June 2015 over Q1 June 2014.
The bank's ratio of net non-performing assets (NPA) to net advances stood at 2.24% as on 30 June 2015, higher than 2.12% as on 31 March 2015 and lower than 2.66% as on 30 June 2014.
On absolute basis, gross NPA declined to Rs 56420.77 crore as on 30 June 2015 as against Rs 56725.34 crore as on 31 March 2015 and Rs 60434.24 crore as on 30 June 2014. The ratio of gross NPA to gross advances stood at 4.29% as on 30 June 2015, higher than 4.25% as on 31 March 2015 and lower than 4.9% as on 30 June 2014.
The provision coverage ratio as on 30 June 2015 stood at 69.49%.
Tata Motors extended yesterday's losses triggered by the company announcing weak Q1 results. The stock dropped 4.37%. The stock had declined 1.71% yesterday, 10 August 2015. On a consolidated basis, Tata Motors reported 48.7% fall in net profit to Rs 2768.91 crore on 5.5% fall in total income to Rs 61326.75 crore in Q1 June 2015 over Q1 June 2014. The company announced the result after market hours on Friday, 7 August 2015.
IT stocks rose on a weak rupee. Infosys (up 2.78%), Wipro (up 1.13%), Tech Mahindra (up 1.84%), HCL Technologies (up 0.34%), TCS (up 1.03%) edged higher. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
In the foreign exchange market, the rupee fell below 64 against the dollar after China's central bank unexpectedly devalued its currency by nearly 2%. The partially convertible rupee was currently hovering at 64.2325, compared with its close of 63.8675 during the previous trading session.
Shares of steel makers fell after China's central bank moved to devalue its tightly controlled currency, stoking fears of Chinese exports becoming cheaper. Steel Authority of India (down 3.73%), JSW Steel (down 2.22%), Jindal Steel & Power (down 0.91%) and Bhushan Steel (down 3.3%) edged lower.
A devalued currency will make Chinese exports becoming cheaper. Dumping of cheaper steel products by China will hurt the Indian steel industry. The devaluation will also impact India's exports to China as a weaker yuan makes resources more expensive to Chinese buyers.
Tata Steel declined 5.42%. On a consolidated basis, Tata Steel's net profit jumped 126.17% to Rs 762.96 crore on 16.81% fall in total income from operations (net) to Rs 30300.33 crore in Q1 June 2015 over Q1 June 2014. The result was announced after market hours today, 11 August 2015.
Shares of other metal stocks also declined. Hindustan Zinc (down 1.43%), Vedanta (down 2.97%) and Hindalco Industries (down 4.45%), dropped.
NMDC declined 1.15% ahead of its Q1 results today, 11 August 2015.
Realty stocks declined. DLF (down 3%), D B Realty (down 6.18%), Sobha (down 0.82%), Unitech (down 2.89%), Oberoi Realty (down 2.57%), and Omaxe (down 0.77%) edged lower. Indiabulls Real Estate (up 1.25%) and Godrej Properties (up 2.38%) rose.
Housing Development and Infrastructure (HDIL) fell 1.36%. HDIL's consolidated net profit rose 2.88% to Rs 59.24 crore on 6.39% rise in total income to Rs 272.51 crore in Q1 June 2015 over Q1 June 2014. The Q1 result was announced after market hours yesterday, 10 August 2015. Meanwhile, the company said in a separate announcement that it has redeemed non-convertible debentures aggregating to Rs 196.20 crore.
Bosch rose 2.16% to Rs 26,564.95. The stock was volatile. The stock hit high of Rs 26,701 and low of Rs 25,401. Bosch reported 12.08% rise in net profit to Rs 343.74 crore on 8.3% growth in total income to Rs 2664.52 crore in Q1 June 2015 over Q1 June 2014. The Q1 result was announced during market hours today, 11 August 2015.
Key benchmark indices fell for third day in a row today, 11 August 2015. The Sensex has lost 432.04 points or 1.52% in the preceding three trading days from recent high of 28,298.13 on 6 August 2015. The Sensex has declined 248.47 points or 0.88% in this month so far (till 11 August 2015). The Sensex has risen 366.67 points or 1.33% in this calendar year so far (till 11 August 2015). From a 52-week low of 25,645.79 on 12 August 2014, the Sensex has risen 2,220.30 points or 8.65%. The Sensex is off 2,158.65 points or 7.18% from a record high of 30,024.74 hit on 4 March 2015.
The sentiment in the stock market was hit adversely today, 11 August 2015, after the opposition Congress party stalled a discussion on the goods and services tax (GST) bill in the Rajya Sabha, citing procedural issues. Soon after the government introducing the GST bill in the Rajya Sabha for its discussion and passage, the upper house was adjourned for the day amid protests by the Congress party. The monsoon session of the Parliament concludes this Thursday, 13 August 2015. The GST bill must be passed during the monsoon session of parliament if the deadline of 1 April 2016 for the introduction of nationwide GST is to be met. If the GST bill gets passed in the Rajya Sabha during the ongoing monsoon session, the government will have to again go to the Lok Sabha for getting the Lower House's approval for the proposed amendments. The Constitutional Amendment Bill for GST needs the support of two-thirds of the members in both houses. Once both houses of Parliament pass the Constitution Amendment Bill, the bill has to be sent to the states for ratification. At least 50% of the states have to ratify the bill.
GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.
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, 10 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 10 August 2015. Region wise, the rainfall was 22% below the LPA in South Peninsula, 11% below the LPA in East & Northeast India, 8% below the LPA in Central India and 2% above the LPA in Northwest India until 10 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.
Among key macro economic announcements this week, the government is scheduled to unveil the consumer price index (CPI) data for the month of July 2015 and industrial production data for June 2015 at 17:30 IST tomorrow, 12 July 2015. The CPI inflation accelerated to 5.4% in June 2015 from 5.01% in May 2015. Industrial production rose 2.7% in May 2015, compared with a revised growth of 3.4% in April 2015.
The government will release data on inflation based on the wholesale price index (WPI) for July 2015 at around 12:00 noon on Friday, 14 August 2015. The WPI inflation continued to be in negative zone for the eighth straight month in June 2015. The WPI inflation stood at negative 2.4% in June 2015, unchanged from the level in May 2015.
In overseas markets, European stocks edged lower today, 11 August 2015, after China devalued its yuan currency. Key benchmark indices in UK, France and Germany were off 0.65% to 1.51%.
Shares rose in Greece after the cash-strapped country reached terms on reforms needed to unlock fresh financial aid. The Athex Composite Share Price Index was up 1.32%.
Chinese stocks edged lower in volatile trade today, 11 August 2015, after China's central bank devalued its tightly controlled currency. In mainland China, the Shanghai Composite lost 0.01%. In Hong Kong, the Hang Seng index lost 0.09%. China's central bank today, 11 August 2015, lowered the value of the yuan by changing the way in which it calculates the yuan's daily midpoint against the US dollar. The latest move from the Chinese central bank resulted in the yuan weakening by 1.9% at 6.2298. The devaluation of the currency comes after trade data at the weekend showed Chinese exports sank 8.3% in July.
Other Asian markets were in red. Key indices in South Korea, Taiwan, Indonesia, Japan and Singapore were off 0.42% to 2.66%.
US stocks surged yesterday, 10 August 2015, buoyed by remarks from one Federal Reserve official suggesting a September interest-rate hike may not be a done deal, as well as from a bounce-back in Chinese equities. Federal Reserve Vice Chairman Stanley Fischer reportedly said in an interview to a television channel yesterday, 10 August 2015, that he doesn't expect the first interest-rate hike by the US central bank in more than nine years to occur until after inflation returns closer to the Fed's target of around 2%. The inflation rate has dipped close to zero in recent months and hasn't been above 2% since April 2012.
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