Metal and banking stocks led losses as key benchmark indices plunged. Intraday recovery for the benchmark indices witnessed earlier during the trading session and during the latter part of the trading session proved short lived. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest closing level in more than a week. The Sensex fell below the psychological 28,000 mark. The Sensex lost 483.97 points or 1.72% to settle at 27,687.72. The steep slide for key equity benchmark indices in India was triggered by a sharp setback in Chinese stock market. A three-week selloff in China's stock market has darkened the outlook for the world's second-largest economy.
Continued concerns about Greece's debt crisis also weighed on sentiment in global markets. There was no breakthrough on Greece debt after an emergency summit of eurozone leaders held yesterday, 7 July 2015. The European Union has now given Greece a deadline of Sunday, 12 July 2015, to produce a credible reform proposal and reach an agreement with lenders or risk sliding into bankruptcy and a eurozone exit.
The market breadth indicating the overall health of the market was weak. The BSE Mid-Cap index fell 1.3%. The BSE Small-Cap index fell 1.28%.
Metal and mining stocks fell as global commodity prices dropped amid a dimming outlook for China's economy. Index heavyweights HDFC, ITC and Infosys dropped.
After opening with a downward gap, key benchmark indices remained in red throughout the trading session today, 8 July 2015.
Key benchmark indices edged lower for the second consecutive trading session today, 8 July 2015.
In overseas markets, Chinese stocks tumbled after the country's securities regulator warned investors were in the grip of "panic sentiment". Japanese stocks fell sharply as jitters over Chinese market volatility, combined with concerns over Greece's debt heightened risk-off sentiment. European stocks edged higher after Greece's Prime Minister Alexis Tsipras told the European Parliament today, 8 July 2015, that Greece will submit a detailed reform proposal to its international creditors in the next few days. Trading in US index futures indicated a weak opening of US stocks later in the global day.
Foreign portfolio investors (FPIs) bought shares worth Rs 143.07 crore from the secondary equity market yesterday, 7 July 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) sold shares worth a net Rs 94.71 crore yesterday, 7 July 2015, as per provisional data released by the stock exchanges.
The S&P BSE Sensex fell 483.97 points or 1.72% to settle at 27,687.72, its lowest closing level since 29 June 2015. The index lost 535.97 points at the day's low of 27,635.72 in late trade. The index fell 140.24 points at the day's high of 28,031.45 in opening trade.
The 50-unit CNX Nifty fell 147.75 points or 1.74% to settle at 8,363.05, its lowest closing level since 29 June 2015. The index hit a low of 8,341.40 in intraday trade. The index hit a high of 8,457.50 in intraday trade.
The market breadth indicating the overall health of the market was weak. On BSE, 1,793 shares fell and 953 shares rose. A total of 112 shares were unchanged.
The BSE Mid-Cap index fell 142.88 points or 1.30% to settle at 10,877.11. The BSE Small-Cap index fell 147.05 points or 1.28% to settle at 11,351.27. The decline in both these indices was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 4036 crore, higher than turnover of Rs 3018.70 crore registered during the previous trading session.
Among sectoral indices on BSE, the S&P BSE Realty index (down 1.78%), the S&P BSE Auto index (down 2.24%) and the S&P BSE Metal index (down 3.89%), underperformed the Sensex. The S&P BSE Capital Goods index (down 0.49%), the S&P BSE Consumer Durables index (down 0.69%), the S&P BSE Healthcare index (down 0.72%), the S&P BSE Power index (down 0.72%), the S&P BSE FMCG index (down 0.97%), the S&P BSE Teck index (down 1.22%), the S&P BSE IT index (down 1.47%), the S&P BSE Oil & Gas index (down 1.48%) and the S&P BSE Bankex (down 1.69%) outperformed the Sensex.
Index heavyweight and housing finance major HDFC dropped 3.54% to Rs 1,290.05. The stock hit high of Rs 1,332 and low of Rs 1,285.35 in intraday trade.
Index heavyweight and software major Infosys declined 2.53% to Rs 957.20. The stock hit high of Rs 985 and low of Rs 955 in intraday trade.
Index heavyweight and cigarette major ITC fell 1.28% to Rs 313. The stock hit high of Rs 317.40 and low of Rs 309.80 in intraday trade.
Metal and mining stocks fell as global commodity prices dropped amid a dimming outlook for China's economy. China is the world's largest consumer of steel, copper and aluminum. Steel Authority of India (down 6.09%), Tata Steel (down 4.72%), JSW Steel (down 3.13%), Hindustan Copper (down 3.02%), Bhushan Steel (down 2.4%), NMDC (down 2.3%), National Aluminum Company (down 1.65%), Hindustan Zinc (down 1.49%) and Jindal Steel & Power (down 1.09%) edged lower.
Vedanta dropped 7.85% to Rs 146.10. The stock hit a 52-week low of Rs 140 in intraday trade.
Shares of Hindalco Industries fell 5.13% to Rs 101.75. The stock hit a 52-week low of Rs 99.20 in intraday trade. With respect to news article titled, "PIL on Hindalco: I-T Dept filed report, estimates that Hindalco dealing with unaccounted cash worth Rs 200 crore - Hindalco paid Rs 7 crore in kickbacks to environment ministry", Hindalco Industries clarified after market hours yesterday, 7 July 2015, that there was nothing new in the allegations and the matter is already under investigation. The company reiterated that neither the diary nor the cash recovered belongs to the company. The Central Bureau of Investigation (CBI) had raided Hindalco's offices in four cities as part of its investigations into alleged illegalities in the allocation of two coal blocks in Odisha.
Bank stocks declined. Among PSU banks, IDBI Bank (down 3.37%), Canara Bank (down 2.58%), Bank of India (down 2.49%), Union Bank of India (down 2.36%), Bank of Maharashtra (down 2.33%), Punjab and Sind Bank (down 2.33%), Syndicate Bank (down 2.24%), Indian Bank (down 2.2%), UCO Bank (down 1.95%), State Bank of India (down 1.94%), Punjab National Bank (down 1.82%), Bank of Baroda (down 1.72%), Allahabad Bank (down 1.67%), United Bank of India (down 1.63%), Vijaya Bank (down 1.45%), Dena Bank (down 1.34%), Andhra Bank (down 1.21%) and Corporation Bank (down 0.29%), edged lower. Central Bank of India rose 0.34%.
Among private sector banks, Yes Bank (down 7.46%), ICICI Bank (down 1.57%), Federal Bank (down 1.54%), Axis Bank (down 1.49%), HDFC Bank (down 1.47%) and Kotak Mahindra Bank (down 0.76%), edged lower. City Union Bank rose 0.35%.
Shares of IndusInd Bank slipped 1.02% to Rs 889.05. Shares allotted by the private sector bank to institutional investors under Qualified Institutional Placement (QIP) were admitted for trading on the bourses today, 8 July 2015. A total of 5.12 crore shares were admitted for trading. IndusInd Bank had priced the issue of shares to institutional investors at Rs 845 per share. The bank had raised Rs 4327.97 crore from the issue of shares to institutional investors late last month.
Key benchmark indices edged lower for the second consecutive trading session today, 8 July 2015. The Sensex has lost 521.04 points or 1.85% in the preceding two trading sessions from a recent high of 28,208.76 on 6 July 2015. The Sensex has risen 93.11 points or 0.34% in this month so far (till 8 July 2015). The Sensex has risen 188.30 points or 0.68% in this calendar year so far (till 8 July 2015). From a 52-week low of 24,892 on 14 July 2014, the Sensex has risen 2,795.72 points or 11.23%. The Sensex is off 2,337.02 points or 7.78% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, India's weather office, the India Meteorological Department (IMD), said in its daily monsoon update issued yesterday, 7 July 2015, that the Southwest Monsoon was active over Gangetic West Bengal, Jharkhand, Bihar, West Uttar Pradesh, Uttarakhand and Haryana, Chandigarh & Delhi and was normal over Nagaland, Manipur, Mizoram & Tripura, East Uttar Pradesh, Himachal Pradesh, West Rajasthan and Chhattisgarh during the past 24 hours until 8:30 IST.
For the country as a whole, cumulative rainfall during this year's monsoon season was 2% below the Long Period Average (LPA) until 7 July 2015. Region wise, the southwest monsoon was 12% above the LPA in Northwest India, 5% below the LPA in Central India and 4% below the LPA each in South Peninsula and East & Northeast India until 7 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, European stocks edged higher today, 8 July 2015, after Greece's Prime Minister Alexis Tsipras told the European Parliament today, 8 July 2015, that Greece will submit a detailed reform proposal to its international creditors in the next few days. Key indices in UK, France and Germany were up 0.51% to 0.70%. In Spain, the IBEX 35 index was up 0.32%. In Italy, the FTSE MIB index was up 1.18%
Investors continue to monitor developments on Greece's debt crisis. Greece will submit a detailed reform proposal in the next few days, in a bid to unlock further bailout aid, the country's Prime Minister Alexis Tsipras reportedly told the European Parliament today, 8 July 2015. Referring to his country's resounding "no" in Sunday's referendum, Tsipras stressed the vote wasn't a signal for Greece to break with Europe, but to return to the negotiating table with a stronger mandate.
Following the emergency euro zone summit in Brussels yesterday, 7 July 2015, European leaders gave debt-stricken Greece a final deadline of Sunday to reach a new bailout deal and avoid Greece's exit from the euro zone. Representatives of the 19-country euro zone said all 28 European Union leaders would meet on Sunday, 12 July 2015, to decide Greece's fate. The talks were organized after Greeks voted in a referendum on Sunday, 5 July 2015, against a bailout that carried stringent austerity measures.
European Central Bank Governing Council member Christian Noyer reportedly said today, 8 July 2015, that there will be no more emergency lending to Greek banks if the country's government fails to secure a bailout deal with lenders. Speaking on French radio station Europe 1, Noyer warned that there must be an agreement by 12 July 2015 otherwise it "will be too late and the consequences will be grave", media reports said.
Without some new cash in the coming weeks, Greece won't be able to make a euro 3.5 billion ($3.8 billion) bond payment to the European Central Bank (ECB) which is payable on 20 July 2015. Such a nonpayment could push the ECB to cut emergency lending to Greek banks--a move that would send the country's financial system into meltdown and force the government to print its own money to recapitalize them. Greek banks have been shut for more than a week, after the ECB put a limit on the emergency loans they had been drawing to buffer growing deposit outflows. Cash withdrawals from ATMs have been limited to euro 60 a day and depositors are unable to transfer money abroad.
Some short-term funding and the prospect of a longer-term bailout deal from the rest of the eurozone could allow Greece--and the ECB--to let banks reopen and normal economic activity in the country to resume.
Greece's last bailout expired last Tuesday and Greece missed a euro 1.6 billion payment to the IMF.
In Asia, Chinese stocks tumbled today, 8 July 2015, after the country's securities regulator warned investors were in the grip of "panic sentiment". In mainland China, the Shanghai Composite index lost 5.9%. In Hong Kong, the Hang Seng index lost 5.84%.
The heavy losses came despite a rare pledge early today, 8 July 2015, by the People's Bank of China that it would closely monitor stock movements and continue to use various means to support the state-backed margin-finance entity China Securities Finance Corp. (CSF) in order to protect market stability.
A spokesman of the China Securities Regulatory Commission, Deng Ge, described the current market mood as "panic sentiment", according to news reports.
China has put an arsenal of measures to work in recent days to stem the selloff that has wiped out roughly $2.4 trillion in value from China's equities. The China Securities Regulatory Commission today, 8 July 20015, announced that the China Securities Finance Corp., a commission unit that provides financing for margin trading, will increase purchases of small-cap stocks. The move follows an earlier pledge by the company to buy blue-chip shares to stabilize the market. China's central bank also said it would help ensure the China Securities Finance Corp. has ample liquidity to stabilize the market. The state-backed company may tap the interbank market, issue bonds, use mortgage financing and borrow from relending facilities, the People's Bank of China said in a statement.
Over the weekend, Beijing suspended initial public offerings and made it easier for investors to borrow to buy stocks.
The sharp slide in Chinese stocks weighed on other Asian markets. Key benchmark indices in Singapore, Taiwan, Japan, Indonesia and South Korea were off 0.7% to 3.14%.
Trading in US index futures indicated that the Dow could fall 147 points at the opening bell today, 8 July 2015. US stocks ended with modest gains yesterday, 7 July 2015, as speculation grew that Greece's crisis would be contained.
In economic data, the US trade deficit rose 2.9% in May, mostly because the US exported fewer aircraft and other manufactured goods. Another data released by the US Department of Labor yesterday, 7 July 2015, showed that job openings at US workplaces rose to a record high of 5.36 million in May (data go back to the end of 2000) from 5.33 million in April.
Meanwhile, investors are now looking ahead to the minutes from the Federal Reserve's June meeting, which are set to be released today, 8 July 2015. The International Monetary Fund yesterday, 7 July 2015, warned of the risks of raising rates too early in the US and called for the Fed to delay a raise until 2016.
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