Weakness continued on the domestic bourses in early afternoon trade. The barometer index, the S&P BSE Sensex, was currently off 1.9%. The 50-unit CNX Nifty was currently trading with losses of more than 2%. The market breadth indicating the overall health of the market was extremely weak. There were more than four losers against every gainer on BSE. The Sensex was currently off 529.12 points or 1.90% at 27,282.72. The BSE Mid-Cap index was off 2.48%. The BSE Small-Cap index was off 2.53%. The decline in both these indices was higher than the Sensex's decline in percentage terms. Indian stocks tumbled today, 29 June 2015, as the collapse of Greek rescue talks during the weekend roiled global markets.
Asian stocks slumped and trading in US index futures indicated a weak opening of US stocks later in the global day today, 29 June 2015, as the Greek financial crisis worsened, with odds of a default increasing after the country announced plans for a referendum on its bailout conditions. Greece shut down its banking system, ordering lenders to stay closed for six days starting today, 29 June 2015, and its central bank moved to impose controls to prevent money from flooding out of the country. The steps, a fateful climax to five years of debt crisis, puts Greece closer than it ever has been to an exit from the euro. The decision came after the European Central Bank yesterday, 28 June 2015, decided not to expand a lifeline of emergency funds that has been sustaining Greek banks.
Earlier, the Sensex and the Nifty, both, hit their lowest levels in more than a week in mid-morning trade as these two key benchmark indices extended intraday losses.
Closer home, index heavyweights HDFC, Reliance Industries, Infosys, L&T, HDFC Bank edged lower. Shares of Tech Mahindra slumped after company said in its business update announced during trading hours that the company's Q1 June 2015 results have some headwinds and tailwinds which could see a risk of marginal decline in both revenue and EBITDA (earnings before interest, taxation, depreciation and amortization) margin of the company on sequential basis.
Shares of power generation firms edged lower. Cement shares declined.
Foreign portfolio investors sold shares worth a net Rs 203.74 crore during the previous trading session on Friday, 26 June 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 234.21 crore on Friday, 26 June 2015, as per provisional data released by the stock exchanges.
At 12:15 IST, the S&P BSE Sensex was down 529.12 points or 1.90% at 27,282.72. The index fell 602.65 points at the day's low of 27,209.19 in mid-morning trade, its lowest level since 19 June 2015. The index fell 360.77 points at the day's high of 27,451.07 in opening trade.
The 50-unit CNX Nifty was down 170.15 points or 2.03% at 8,210.95. The index hit a low of 8,195.65 in intraday trade so far, which is exactly the same as intraday low of the Nifty on 19 June 2015. The index hit a high of 8,248.05 in intraday trade.
The BSE Mid-Cap index was down 264.60 points or 2.48% at 10,421.51. The BSE Small-Cap index was down 281.87 points or 2.53% at 10,842.62. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was extremely weak. There were more than four losers against every gainer on BSE. 1,876 shares fell and 456 shares rose. A total of 100 shares were unchanged.
Index heavyweight and housing finance major HDFC was down 1.89% at Rs 1,263.90. The stock hit a high of Rs 1,280 and a low of Rs 1,261 so far during the trading session.
Another index heavyweight Reliance Industries (RIL) was down 1.97% at Rs 979.90. The stock hit a high of Rs 985.30 and a low of Rs 972.60 so far during the trading session.
Index heavyweight and IT major Infosys was down 1.76% at Rs 988.40. The stock hit a high of Rs 999 and a low of Rs 980 so far during the trading session.
Index heavyweight and construction major L&T was down 1.28% at Rs 1,757.20. The stock hit a high of Rs 1,760 and a low of Rs 1,720 so far during the trading session. The company announced during trading hours today, 29 June 2015, that its construction division won orders worth Rs 2035 crore across various business segments in June 2015.
Private sector lender HDFC Bank was down 2.71% at Rs 1,034.25. The stock hit a high of Rs 1,044.40 and a low of Rs 1,031.20 so far during the day.
Tech Mahindra fell 6.32% to Rs 488.90. In its business update, the company announced during trading hours today, 29 June 2015, that the company's Q1 June 2015 results have some headwinds and tailwinds which could see a risk of marginal decline in both revenue and EBITDA (earnings before interest, taxation, depreciation and amortization) margin of the company on sequential basis. Tech Mahindra said that a seasonally weak mobility business will be a drag on Q1 revenues and EBITDA of the company. H1 B visa costs will be another drag on margins, the company said. On the other hand, favourable currency movements could help both revenue and margins, the company said.
For the current financial year, the management's endeavour will be grow enterprise business in line or above industry. Improving EBITDA margin is one of the top priorities of the company for FY 2016, Tech Mahindra said. The company further said that the organic growth of the communications business of the company could remain subdued in FY 2016 due to delayed decision making. The deal pipeline of the communications business remains healthy, the company said.
Shares of power generation firms edged lower. GMR Infrastructure (down 5.37%), Adani Power (down 4.19%), Jaiprakash Power Ventures (down 4.03%), JSW Energy (down 3.41%), Reliance Power (down 3.12%), Torrent Power (down 2.22%), Tata Power (down 2.1%), NHPC (down 2.02%), CESC (down 1.96%), Reliance Infrastructure (down 1.76%) and NTPC (down 1.16%), edged lower.
Cement shares declined. Ambuja Cements (down 2.62%), ACC (down 2.44%), UltraTech Cement (down 1.39%) and Shree Cement (down 0.09%), edged lower.
Grasim Industries was down 2.06%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
Meanwhile, the Reserve Bank of India (RBI) yesterday, 28 June 2015, clarified that RBI Governor Dr. Raghuram G. Rajan had not suggested at a London Business School conference on 25 June 2015 that the world risked sliding into another Great Depression as reported by sections of the media. The RBI clarified that what Rajan had said at that conference was that the policies followed by major central banks around the world were in danger of slipping into the kind of beggar-thy-neighbour strategies that were followed in the 1930s. Rajan called for new rules of the game in the international monetary system, a call that he has made before and is gaining some traction. The Great Depression was a period of great turmoil caused by many factors and not just beggar-thy-neighbour policies, according to the clarification issued by the RBI.
Meanwhile, the weekly data released by the Ministry of Agriculture after trading hours on Friday, 26 June 2015, showed that the sowing of Kharif crops is gathering pace. The total sown area for Kharif crops as on 26 June 2015 stood at 165.62 lakh hectares compared with 134.18 lakh hectares at this time last year.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update issued yesterday, 28 June 2015, that the Southwest Monsoon was vigorous over Bihar and active over Andaman & Nicobar Islands, West Bengal & Sikkim, Jharkhand and Kerala during the past 24 hours until 8:30 IST, IMD said.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 23% above the Long Period Average (LPA) until 27 June 2015. Region wise, the southwest monsoon was 39% above the LPA in Central India, 33% above the LPA in Northwest India, 28% above the LPA in South Peninsula and 1% above the LPA in East & Northeast India until 27 June 2015.
On Friday, 26 June 2015, the IMD had announced that the monsoon has covered the entire country.
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 fell today, 29 June 2015, as investors brace for an increasingly likely Greek exit from the eurozone. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan were down by 1.16% to 2.88%.
China's central bank cut interest rates on Saturday, 27 June 2015, and reduced the reserves that certain banks must hold. The People's Bank of China (PBoC) cut the benchmark 1-year lending rate by a quarter percentage point to 4.85%, its fourth rate cut since November. The PBoC also lowered the reserve requirement ratio for some lenders by half of a percentage point.
Trading in US index futures indicated that the Dow could fall 234 points at the opening bell today, 29 June 2015. It was a mixed day for US stocks on Friday, 26 June 2015, with technology stocks posting a decline and the Dow rising with the help of Nike.
US consumer sentiment rose to a final June reading of 96.1, reaching a five-month high after a decline in May, according to reports on the University of Michigan gauge.
In Europe, the crisis in Greece has deepened. Greek leaders imposed capital controls and closed banks for at least six days beginning today, 29 June 2015, to prevent further panicked withdrawals from citizens after the European Central Bank yesterday, 28 June 2015, decided not to expand a lifeline of emergency funds that has been sustaining Greek banks. Talks between Greece and its creditors broke down on Saturday, 27 June 2015, and the nation looks set to miss a debt repayment to the International Monetary Fund which is due tomorrow, 30 June 2015. Greece's international bailout also expires on 30 June 2015.
Greek Prime Minister Alexis Tsipras has called a referendum on Sunday, 5 July 2015, on whether the country should accept creditors' bailout terms, and has called on his people to deliver a resounding "No" vote.
The European Commission yesterday, 28 June 2015, offered Greek voters a 10-point plan for bailout requirements, urging Greece to stay in the euro area.
International Monetary Fund (IMF) Managing Director Christine Lagarde yesterday, 29 June 2015, said that the IMF is still open for talks with Greece to find a way out of the country's debt crisis. The coming days will clearly be important, she said.
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