Key indices hit 2-week high
Key benchmark indices registered modest gains in what was a volatile session of trade. After moving in a narrow range near the flat line in first half of the day's trading session, key benchmark indices extended gains and hit intraday high in mid-afternoon trade only to pare gains in late trade. The barometer index, the S&P BSE Sensex, rose 75.05 points or 0.27% to settle at 28,298.13. The Sensex and the 50-unit CNX Nifty, both, hit their highest closing levels in two weeks. The market breadth indicating the overall health of the market was negative. Meanwhile, retirement fund manager Employees Provident Fund Organisation (EPFO) will reportedly start investing in the stock market through the exchange-traded funds (ETFs) route starting today, 6 August 2015.
Most PSU banks edged higher. Private sector banks were mixed. Index heavyweight and cigarette major ITC dropped in volatile trade. FMCG stocks were mixed. Capital goods stocks rose.
Key benchmark indices rose for the second consecutive trading session today, 6 August 2015.
Foreign portfolio investors (FPIs) bought shares worth Rs 728.63 crore from the secondary equity market yesterday, 5 August 2015, as per data from National Securities Depository (NSDL). Domestic institutional investors (DIIs) sold shares worth a net Rs 189.11 crore yesterday, 5 August 2015, as per provisional data.
In overseas markets, European stocks edged lower in choppy trade. Asian stocks edged lower as jitters about China's economy and upcoming US jobs data kept buying appetite in check. US stocks closed mostly higher yesterday, 5 August 2015, in a choppy day of trading as investors digested conflicting economic data.
The S&P BSE Sensex rose 75.05 points or 0.27% to settle at 28,298.13, its highest closing level since 23 July 2015. The index jumped 136.88 points at the day's high of 28,359.96 in mid-afternoon trade. The index fell 59.39 points at the day's low of 28,163.69 in early afternoon trade.
The 50-unit CNX Nifty rose 20.70 points or 0.24% to settle at 8,588.65, its highest closing level since 23 July 2015. The index hit a high of 8,606.30 in intraday trade. The index hit a low of 8,551.50 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,532 shares declined and 1,391 shares rose. A total of 112 shares were unchanged.
The BSE Mid-Cap index rose 41.12 points or 0.36% to settle at 11,585.58,
outperforming the Sensex. The BSE Small-Cap index fell 14.33 points or 0.12% to settle at 12,121.68, underperforming the Sensex.
The total turnover on BSE amounted to Rs 3414 crore, lower than turnover of Rs 4501.29 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Consumer Durables index (up 1.91%), the S&P BSE Capital Goods index (up 1.68%), the S&P BSE Healthcare index (up 1.14%), the S&P BSE Auto index (up 0.56%), the S&P BSE Bankex (up 0.55%), the S&P BSE Realty index (up 0.47%) and the S&P BSE IT index (up 0.27%), outperformed the Sensex. The S&P BSE Teck index (up 0.14%), the S&P BSE Power index (down 0.16%), the S&P BSE Oil & Gas index (down 0.26%), the S&P BSE Metal index (down 0.55%) and the S&P BSE FMCG index (down 1.13%), underperformed the Sensex.
Index heavyweight and cigarette major ITC dropped 1.70% to Rs 326.05. The stock hit a high of Rs 330 and low of Rs 324.45.
FMCG stocks edged higher. Bajaj Corp (up 2.52%), Colgate Palmolive (India) (up 2.51%), Tata Global Beverages (up 1.20%), Jyothy Laboratories (up 0.80%), Procter & Gamble Hygiene & Health Care (up 0.80%), Dabur India (up 0.41%), Hindustan Unilever (up 0.07%) and Marico (up 0.01%), edged higher. GlaxoSmithKline Consumer Healthcare (down 0.09%), Britannia Industries (down 0.4%) and Godrej Consumer Products (down 2.94%), edged lower.
Nestle India dropped 5.03% to Rs 6,488.35 after Food Safety and Standards Authority of India clarified that it has not given any clean chit regarding the safety of Nestle India's Maggi Noodles. Food Safety and Standards Authority of India (FSSAI) issued the clarification yesterday, 5 August 2015. FSSAI issued the clarification in response to media reports that a Food Safety and Standards Authority of India (FSSAI) approved laboratory of Central Food Technological Research Institute (CFTRI) had found Maggi noodles in compliance with food safety standards on a testing of five samples sent by Goa Food and Drug Administration.
PSU banks edged higher. Union Bank of India (up 4.11%), Canara Bank (up 2.67%), Bank of India (up 2.32%), UCO Bank (up 1.74%), IDBI Bank (up 1.26%), Andhra Bank (up 1.11%), State Bank of India (up 1.02%), Syndicate Bank (up 0.69%), Allahabad Bank (up 0.64%), Dena Bank (up 0.33%) and Bank of Baroda (up 0.19%), edged higher. Punjab and Sind Bank (down 0.12%), Corporation Bank (down 0.19%), United Bank of India (down 0.6%), Bank of Maharashtra (down 0.65%), Vijaya Bank (down 0.97%), Central Bank of India (down 1.03%) and Indian Bank (down 3.17%), edged lower.
Shares of state-run Punjab National Bank (PNB) edged higher in volatile trade after the bank announced a reduction in interest rates on domestic term deposits, NRE term deposits and PNB Tax Saver Fixed deposits from 10 August 2015. The stock rose 1.79% at Rs 161.90. The stock hit a high of Rs 162.80 and a low of Rs 156.55 so far during the day. For domestic term deposits of less than Rs 1 crore, the interest rates have been reduced from 8.10% to 8% in the maturity bucket between 1 year and 2 year. The interest rates have been reduced from 8% to 7.75% in the maturity bucket of more than 2 years and less than 5 years. The interest rates have been reduced from 8% to 7.50% in the maturity bucket of greater than 5 years and less than 10 years.
The bank also reduced interest rates by between 25 basis points to 100 basis points for domestic term deposits ranging from Rs 1 crore to Rs 10 crore for different maturity buckets.
Private sector banks were mixed. Kotak Mahindra Bank (up 2.01%), Axis Bank (up 0.77%), HDFC Bank (up 0.27%) and ICICI Bank (up 0.06%), edged higher. IndusInd Bank (down 0.1%), Yes Bank (down 0.35%), City Union Bank (down 0.55%) and Federal Bank (down 1.02%), edged lower.
Capital goods stocks rose. Lakshmi Machine Works (up 7.25%), Pipavav Defence and Offshore Engineering Company (up 3.88%), ALSTOM India (up 3.23%), Punj Lloyd (up 3.09%), Larsen & Toubro (up 2.74%), SKF India (up 1.55%), AIA Engineering (up 1.27%), Thermax (up 0.68%), Bharat Heavy Electricals (up 0.64%) and ABB India (up 0.54%), edged higher. Havells India (down 0.32%), Alstom T&D India (down 1.31%), Jindal Saw (down 1.53%), Bharat Electronics (down 1.6%), BEML (down 1.72%), Crompton Greaves (down 2.39%), Suzlon Energy (down 3.71%) and Praj Industries (down 3.82%), edged lower.
Siemens gained 1.74% to Rs 1,521.60. The stock hit a high of Rs 1,558 in intraday trade, which is record high for the stock. Siemens' net profit rose 1195.23% to Rs 168.25 crore on 1.29% increase in total income to Rs 2431.51 crore in Q3 June 2015 over Q3 June 2014. The result was announced after market hours yesterday, 5 August 2015. Siemens' new orders declined 18.23% to Rs 2234.08 crore in Q3 June 2015 over Q3 June 2014.
Siemens' Managing Director and Chief Executive Officer Sunil Mathur said that order inflow in the company's energy vertical has not yet picked up. The company's continued focus on operational excellence is reflected in its improved profitability, he added.
Cummins India jumped 12.77% to Rs 1,158.90. The stock hit a high of Rs 1,205, which was also a record high for the stock. Cummins India's net profit fell 0.59% to Rs 210.73 crore on 19.32% rise in total income to Rs 1374.36 crore in Q1 June 2015 over Q1 June 2014. The result was announced during market hours today, 6 August 2015.
Key benchmark indices rose for the second consecutive trading session today, 6 August 2015. The Sensex has risen 226.20 points, or 0.81% in the preceding two trading sessions from a recent low of 28,071.93 on 4 August 2015. The Sensex has risen 183.57 points or 0.65% in this month so far (till 6 August 2015). The Sensex has risen 798.71 points or 2.90% in this calendar year so far (till 6 August 2015). From a 52-week low of 25,232.82 on 8 August 2014, the Sensex has risen 3,065.31 points or 12.15%. The Sensex is off 1,726.61 points or 5.75% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, retirement fund manager Employees Provident Fund Organisation (EPFO) will reportedly start investing in the stock market through the exchange-traded funds (ETFs) route starting today, 6 August 2015. As per the decision by the central board of EPFO, the retirement fund manager will reportedly invest up to 5% of its incremental corpus in ETFs in the fiscal year through 31 March 2016. News reports today, 6 August 2015, suggested that EPFO will invest in two ETFs viz. the SBI Nifty ETF and SBI Sensex ETF to start with.
Meanwhile, in the global commodities markets, Brent crude oil futures edged lower in choppy trade. Brent for September settlement was currently down 27 cents at $49.32 a barrel. The contract had declined 40 cents or 0.8% to settle at $49.59 a barrel during the previous trading session.
India imports about 80% of its crude requirements and a decline in crude eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 63.7750, compared with its close of 63.755 during the previous trading session.
Meanwhile, India's weather office, the India Meteorological Department (IMD) said in a daily report issued yesterday, 5 August 2015, that the Southwest Monsoon was vigorous over Marathawada and Vidarbha and active over Arunachal Pradesh, Assam & Meghalaya, Sub-Himalayan West Bengal & Sikkim, West Madhya Pradesh and Madhya Maharashtra during past 24 hours until 8:30 IST. For the country as a whole, cumulative rainfall during this year's monsoon season was 6% below the Long Period Average (LPA) until 5 August 2015. Region wise, the rainfall was 21% below the LPA in South Peninsula, 9% below the LPA in East & Northeast India, 4% below the LPA in Central India and 5% above the LPA in Northwest India until 5 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.
In overseas markets, European stocks edged lower in choppy trade today, 6 August 2015. Key benchmark indices in UK, France and Germany were off 0.01% to 0.35%.
The Bank of England today, 6 August 2015, signaled it remains on course to start gently raising interest rates in the UK early next year, damping speculation that it would quickly follow the US Federal Reserve, which appears set for a September liftoff.
The central bank said officials agreed to leave the BOE's benchmark interest rate at 0.5% and the size of its bond portfolio at GBP375 billion ($585 billion).
Minutes of officials' deliberations, published simultaneously with the rate decision revealed the decision was not unanimous. For the majority, however, a rise in interest rates was not necessary.
In the BOE's quarterly inflation report, also published today, forecasts showed that officials expect annual inflation to rise back to its 2% target by the third quarter of 2017 provided that interest rates rise in line with expectations in financial markets.
Those expectations are for the BOE to begin lifting its benchmark short-term rate from 0.5%, where it has been pegged since early 2009, in the first half of 2016.
Greece's Prime Minister Alexis Tsipras reportedly said yesterday, 5 August 2015, that Greece was close to concluding a deal with lenders on a multi-billion-euro bailout, which he said would end doubts over its place in the euro zone. An accord must be settled -- or a bridge loan agreed -- by 20 August 2015, when a 3.5 billion euro debt payment to the European Central Bank (ECB) falls due.
Asian stocks edged lower today, 6 August 2015, as jitters about China's economy and upcoming US jobs data kept buying appetite in check. Key benchmark indices in China, Indonesia, Taiwan, Hong Kong and South Korea fell by 0.57% to 1.09%. Key benchmark indices in Singapore and Japan rose 0.17% to 0.24%.
US stocks closed mostly higher yesterday, 5 August 2015, in a choppy day of trading as investors digested conflicting economic data. Activity in the services sector surged to a 10-year high of 60.3 in July, while private payroll growth was softer than expected. A report yesterday, 5 August 2015, showed that private employers added 185,000 jobs in July, down from the 229,000 jobs added in June. Meanwhile, the pace of growth in the US service sector soared in July, recording its best reading in a decade. The nonmanufacturing purchasing managers index rose to 60.3 in July from 56 in June, its highest reading since August 2005, the Institute for Supply Management said yesterday, 5 August 2015.
Federal Reserve Governor Jerome Powell yesterday, 5 August 2015, said that he was undecided about whether to support a rate hike when policy makers next meet in mid-September. Powell's remarks came after two Fed regional bank presidents have come out in favor of a September hike earlier this week.
The influential monthly US nonfarm payroll report for July 2015 is due tomorrow, 7 August 2015. The report will be scrutinized for clues to the strength of the labor-market recovery. Investors have been parsing economic data, from inflation to wages, for clues about when the Federal Reserve might raise rates.