Volatility continued as key benchmark indices once again trimmed intraday gains in mid-afternoon trade after witnessing a sharp spike in afternoon trade. The barometer index, the S&P BSE Sensex was currently up 111.31 points or 0.4% at 27,623.57. The market breadth indicating the overall health of the market was weak.
Cement stocks gained. Capital goods stocks dropped.
The macro economic data announced after market hours yesterday, 12 August 2015, showing industrial production registered year-on-year growth of 3.8% in June 2015 and inflation based on the consumer price index (CPI) eased sharply last month to 3.78% from 5.4% in June 2015, have raised hopes that the Reserve Bank of India (RBI) may cut rates to strengthen economic growth. Firmness in European and Asian stocks also supported gains on the domestic bourses.
In overseas markets, European equities edged higher after China's central bank said there was no basis for further yuan depreciation after a devaluation this week that has seen the currency slide. Asian stocks edged higher taking heart from a late recovery of US stocks overnight and from efforts by China's central bank to slow the sharp descent of the yuan. US stocks rebounded after a late recovery yesterday, 12 August 2015 after a early slide triggered by China weakening its currency again, spooking investors worried about a slowdown in the world's second-largest economy and its effects on global growth.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 1,855.02 crore yesterday, 12 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1223.80 crore yesterday, 12 August 2015, as per provisional data.
At 14:18 IST, the S&P BSE Sensex was up 111.31 points or 0.4% at 27,623.57. The index gained 278.84 points at the day's high of 27,791.10 in early trade. The index rose 23.71 points at the day's low of 27,535.97 in afternoon trade.
The CNX Nifty was up 35.90 points or 0.43% at 8,385.35. The index hit a high of 8,429.50 in intraday trade. The index hit a low of 8,339.75 in intraday trade.
The market breadth indicating the overall health of the market was weak. On BSE, 1,645 shares declined and 1,086 shares rose. A total of 99 shares were unchanged.
The BSE Mid-Cap index was up 47.80 points or 0.43% at 11,264.14, outperforming the Sensex. The BSE Small-Cap index was down 31.34 points or 0.27% at 11,630.89, underperforming the Sensex.
Capital goods stocks dropped. ABB (India) (down 2.19%), Bharat Heavy Electricals (Bhel) (down 2.19%), Havells India (down 1.83%), L&T (down 0.53%), and Siemens (down 1.52%) declined.
Cement stocks gained. ACC (up 0.34%), Shree Cement (up 0.46%), Ambuja Cements (up 0.81%), and UltraTech Cement (up 0.43%) gained.
Grasim Industries declined 0.47%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Meanwhile, as per reports, the 23-day monsoon session of Parliament came to an end today, 13 August 2015 after both the Houses - Lok Sabha and Rajya Sabha were adjourned sine dine without any major bill, including the Goods and Services Tax Bill being passed. The session which began on 21 July 2015 was a complete washout due to protests by the opposition, chiefly the Congress, demanding the resignations of External Affairs Minister Sushma Swaraj and Rajasthan CM Vasundhara Raje in the Lalit Modi controversy and Madhya Pradesh CM Shivraj Singh Chouhan in the Vyapam scam.
The proposed GST bill is the biggest tax overhaul since independence from Britain in 1947. It will subsume myriads of federal and state tax levies, replacing a chaotic structure that inflates costs. The delay in passing the law will make it difficult for Prime Minister Narendra Modi to meet a self-imposed deadline of next April for its launch.
Among macro economic data, industrial production registered year-on-year growth of 3.8% in June 2015, according to the data released by the Ministry of Statistics & Programme Implementation after trading hours yesterday, 12 August 2015. The cumulative growth in industrial production for the period April-June 2015 over the corresponding period of the previous year stands at 3.2%. The IIP growth for May 2015 was scaled down to 2.5% in the first revision compared with 2.7% reported provisionally. Meanwhile, the growth in March 2015 that was scaled up at first revision to 2.5% from 2.1% reported provisionally, has been retained nearly unchanged at 2.5% in final revision.
An improvement in the pace of growth of industrial production was driven entirely by more than doubling of growth in the output of manufacturing sector to 4.6% in June 2015 from 2% in May 2015. On the other hand, the mining sector output declined 0.3% after four months of consistent growth. The electricity generation growth eased to 1.3% in June 2015 from 6% in May 2015.
As per the use-based classification, the basic goods output increased 5.1% in June 2015 over a year ago. However, the output of capital goods declined 3.6%, while the intermediate goods output growth slowed down to 0.8%.The output of consumer goods increased at 32-month high pace of 6.6% in June 2015. Within consumer goods, the production of consumer durables zoomed 16%, while that of consumer non-durables also improved 1.3% in June 2015.
Due to a large base effect, inflation based on the consumer price index (CPI) eased sharply last month. CPI inflation eased to 3.78% in July 2015 from 5.4% in June 2015, according to the data released by the Ministry of Statistics & Programme Implementation after trading hours yesterday, 12 August 2015. Consumer Food Price Index (CFPI) eased to 2.15% in July 2015 from 5.48% in June 2015, the latest data showed.
The government will release data on inflation based on the wholesale price index (WPI) for July 2015 at around 12:00 noon tomorrow, 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.
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, 12 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 12 August 2015. Region wise, the rainfall was 20% below the LPA in South Peninsula, 12% below the LPA in East & Northeast India, 8% below the LPA in Central India and 2% above the LPA in Northwest India until 12 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.
European equities edged higher today, 13 August 2015 after China's central bank said there was no basis for further yuan depreciation after a devaluation this week that has seen the currency slide. Key benchmark indices in UK, France and Germany were up 0.55% to 1.53%.
Investors are monitoring developments on Greece's third bailout, which now needs to be agreed by euro zone governments. As per reports, there are signs of trouble brewing in Germany over the bailout. Germany's Finance Ministry yesterday, 12 August 2015 reportedly criticized a draft agreement between Greece and lenders as having "no full clarity on the direction of policies.
Asian stocks edged higher today, 13 August 2015 taking heart from a late recovery of US stocks overnight and from efforts by China's central bank to slow the sharp descent of the yuan. Key indices in China, Hong Kong, South Korea, Indonesia, Taiwan, Japan and Singapore were up 0.34% to 2.5%.
China guided its currency lower for a third day today, 13 August 2015, after briefly intervening to prop it up the day before, showing how the leadership is struggling to manage the market in largely uncharted territory for Beijing.
China's central bank said today, 13 August 2015, that there is no basis for further depreciation in the yuan currency given strong economic fundamentals, in a bid to reassure jittery global financial markets after it devalued the currency earlier in the week. The People's Bank of China (PBOC) said that the country's strong economic environment, sustained trade surplus, sound fiscal position and deep foreign exchange reserves provide "strong support" to the exchange rate. China's yuan fell recent days after the PBOC shocked markets by pushing its official guidance rate down 2% on Tuesday, 11 August 2015 the sharpest adjustment in the history of China's foreign exchange market.
Japanese data released today, 13 August 2015, showed Japan's core machinery orders fell a greater-than-expected 7.9% in June, down for the first time in four months.
US stocks settled higher after a late recovery yesterday, 12 August 2015, from a early slide triggered by China weakening its currency again, spooking investors about a slowdown in the world's second-largest economy and its effects on global growth.
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