A bout of volatility was witnessed as benchmark indices cut losses after extending intraday slide in mid-afternoon trade. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty trimmed losses after both these key benchmark indices hit 4-1/2-week low. The market breadth indicating the overall health of the market was quite weak, with more than two losers against every gainer on BSE. The Sensex was currently off 174.04 points or 0.65% at 26,594.45. The BSE Mid-Cap index was off 1.31%. The BSE Small-Cap index was off 1.26%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
Power generation stocks declined. Realty shares also edged lower.
In overseas markets, European stocks edged lower as investors continued to focus on Greece where the government is struggling to reach a bailout deal with international lenders. Asian stocks were mixed. The US stock market finished mostly lower during the previous trading session on Friday, 5 June 2015, as an upbeat jobs report raised expectations of early rate increase by the Federal Reserve.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 550.29 crore during the previous trading session on Friday, 5 June 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 879.50 crore on Friday, 5 June 2015, as per provisional data released by the stock exchange.
At 14:25 IST, the S&P BSE Sensex was down 174.04 points or 0.65% at 26,594.45. The index lost 265.08 points at the day's low of 26,503.41 in mid-afternoon trade, its lowest level since 7 May 2015. The index rose 58.57 points at the day's high of 26,827.06 at onset of the day's trading session.
The CNX Nifty was down 55.85 points or 0.69% at 8,058.85. The index hit a low of 8,033.75 in intraday trade, its lowest level since 7 May 2015. The index hit a high of 8,131 in intraday trade.
The market breadth indicating the overall health of the market was quite weak, with more than two losers against every gainer on BSE. 1,757 shares declined and 749 shares rose. A total of 121 shares were unchanged.
The BSE Mid-Cap index was off 135.46 points or 1.31% at 10,218.47. The BSE Small-Cap index was off 137.03 points or 1.26% at 10,714.47. The fall in both these indices was higher than the Sensex's decline in percentage terms.
Realty shares edged lower. Unitech (down 5.72%), Indiabulls Real Estate (down 2.52%), Housing Development and Infrastructure (down 1.86%), D B Realty (down 3.13%), Sobha (down 1.78%), Godrej Properties (down 3.31%), Oberoi Realty (down 0.94%) and Parsvnath Developers (down 0.29%) declined.
Realty major DLF rose 1.77% to Rs 109.20. The stock hit high of Rs 110.40 and low of Rs 107.10 so far during the day.
Power generation stocks declined. Reliance Infrastructure (down 2.96%), CESC (down 1.91%), NTPC (down 1.32%), NHPC (down 1.32%), Jaiprakash Power Ventures (down 3.61%), Adani Power (down 4.6%) edged lower.
Tata Power Company (up 1.2%) and JSW Energy (up 0.41%) rose.
Reliance Power fell 3.31%. Reliance Power on Saturday, 6 June 2015, said that the company has signed a Memorandum of Understanding (MoU) with Bangladesh Power Development Board (BPDB) to develop 3,000 megawatts (MW) of liquefied natural gas (LNG) based combined cycle power project in Bangladesh in phases, along with a floating storage and re-gasification unit (FSRU) based LNG terminal to supply re-gasified LNG to the power project.
Godrej Industries fell 2.92%. Godrej Industries during market hours today, 8 June 2015, said that a fire in a section of the company's plant at Valia, Gujarat was brought under control immediately. The cause of the fire and necessary repairs required is being assessed, the company said. The company has adequate fire insurance cover and this incident is not expected to have any material impact on the financial performance of the company, it added.
Sun TV Network lost 21.06%. With reference to the media reports captioned "MHA denies clearance to Sun TV channels, may go off air", Sun TV Network during market hours today, 8 June 2015, clarified that no communication has been received by the company in this regard from any ministry and all the company's channels continue to be on air. The stock price fell sharply after media reports indicated that the Ministry of Home Affairs has struck down the proposal by the Information and Broadcasting Ministry for giving security clearance to company's 33 television channels. According to reports, Sun TV Network had applied to Information and Broadcasting Ministry (I&B) Ministry for renewing its broadcasting licence for 10 years, which required security clearance from the Home Ministry.
According to reports, the home ministry rejected clearance on the ground that the continued airing of the Sun TV channels would have an adverse impact on economic security of the country. According to reports, the home ministry's rejection of the security clearance to Sun TV channels has been influenced by pending criminal cases against Kalanithi Maran and his brother and former Union minister Dayanidhi Maran. Kalanithi Maran is the promoter of Sun TV Network.
Meanwhile, the Ministry of Corporate Affairs today, 8 June 2015, announced that the government has issued final notifications under section 462 of the Companies Act, 2013 (Act) that provide exemptions under various provisions of the Act to private companies, government companies, Section 8 Companies and Nidhis. For private companies, the exemptions relax the provisions for entering into related party transactions; provide a shorter period for offering securities to members through right offers; provide for approving issue of employee stock option plans through a simple majority and allow an easier procedure and flexibility in holding general meetings. Private companies have also been allowed to accept deposits from members without the requirement of offer circular and creation of deposit repayment reserve etc. Flexibility has also been provided in the types of share capital that can be issued by private companies. Exemption has been given from filing of board resolutions with the registry and giving of notice for standing for directorships. Requirement of mandatory consent of shareholders with regard to certain transactions relating to sale of undertaking, investments, borrowings etc has been omitted. Further, OPCs, dormant companies, small companies and private companies having paid up share capital less than Rs 100 crore have been excluded for calculating the limit of 20 companies for audit by an auditor. Private companies not having any investment by any body corporate have been allowed to extend loans to directors etc subject to certain conditions relating to bank borrowings and default thereof. An interested director of a private company can now participate in the board meeting after declaring his interest.
Government companies have been exempted from the limits pertaining to managerial remuneration; restriction on maximum number of directorships and disqualification of directors in certain cases. The provisions in respect of Nomination and Remuneration Committee have also been relaxed in respect of their applicability to directors/managerial persons. The provisions relating to loans to directors; loans and investments by companies and related party transactions have been modified to provide flexibility to government companies in complying with such provisions. The exemption for government companies to retain the suffix "Limited" even if incorporated as private limited company has been continued as per the exemption available under Companies Act, 1956. Modifications in the provisions relating to place of holding general meetings have also been made. Provisions in respect of rotation of directors and right of persons to stand for directorship are exempted for wholly owned government companies. The provisions in respect of forming opinion about integrity, expertise/experience of independent directors have been modified to provide flexibility to the concerned Ministry/Department. For government companies engaged in producing defence equipment, the provisions of section 186 (loans and investments by companies) and Accounting Standard - 17 (Segment Reporting) shall not be applicable.
On the macro front, the Reserve Bank of India (RBI) is scheduled to announce current account deficit (CAD) data for Q4 March 2015 today, 8 June 2015. India's CAD narrowed to $8.2 billion or 1.6% GDP in Q3 December 2014 from $10.1 billion or 2% of GDP in Q2 September 2014.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update yesterday, 7 June 2015, that conditions are favourable for further advance of southwest monsoon into some more parts of central Arabian Sea & Karnataka, remaining parts of Tamilnadu, some parts of Rayalaseema and Coastal Andhra Pradesh and some more parts of central Bay of Bengal during next two days.
On Friday, 5 June 2015, the IMD had announced the onset of the southwest monsoon at the Kerala coast. The annual 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, 8 June 2015, as investors continued to focus on Greece where the government is struggling to reach a bailout deal with international lenders. Key benchmark indices in UK, France and Germany were off 0.03% to 0.22%.
Greece last week deferred a debt payment to the International Monetary Fund by bundling four payments to the fund due in June into one. The bundling option hasn't been used since the 1980s, when Zambia used it. Greek finance minister Yanis Varoufakis is due to meet his German counterpart Wolfgang Schble today, 8 June 2015, in an attempt to break the negotiation deadlock.
Germany's Industrial production, adjusted for inflation and seasonal swings, increased 0.9% in April from the previous month, data from the federal statistics office Destatis showed today, 8 June 2015.
Asian stocks were mixed today, 8 June 2015. Key benchmark indices in China, Hong Kong and Taiwan rose by 0.21% to 2.17%. Key benchmark indices in Japan, Singapore, Indonesia and South Korea fell by 0.02% to 1.82%.
China's exports fell 2.5% in May from a year earlier in dollar terms, after a drop of 6.4% in April, data from the General Administration of Customs showed today, 8 June 2015. Imports in May fell 17.6% from a year earlier, compared with a 16.2% drop in April. China's trade surplus widened in May to $59.49 billion from $34.1 billion in April.
Japan's economy grew faster than initially estimated in the first quarter, as the world's third largest economy continued its gradual recovery from last year's recession on the back of robust exports to the US and China. Gross domestic product, the broadest measure of the nation's economic activity, expanded at an annualized pace of 3.9% in January-March, according to data released today, 8 June 2015 by the Cabinet Office. The revised figure compares with a preliminary reading of 2.4% growth.
US stocks finished mostly lower on Friday, 5 June 2015 as an upbeat jobs report raised expectations for an interest-rate hike this fall.
In economic data, the Labor Department said the US economy generated 280,000 new jobs in May. The Labor Department also revised the jobs figures from March and April. March was revised up to 119,000 from 85,000, while April was revised a touch lower to 221,000 from 223,000. The unemployment rate edged up to 5.5%, but mainly because more Americans entered the labor force in search of work.
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