Key indices reverse intraday losses

After languishing in negative zone in early afternoon trade, key benchmark indices revered direction in afternoon trade. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was currently up 10.23 points or 0.04% at 28,233.31. Meanwhile, retirement fund manager Employees Provident Fund Organisation (EPFO) will reportedly start investing in the stock market through the exchange-traded funds (ETFs) route from today, 6 August 2015. In overseas markets, European stocks edged lower in early trade there. Asian stocks edged lower as jitters about China's economy and upcoming US jobs data kept buying appetite in check.

Shares of index heavyweight and cigarette major ITC edged lower. Auto shares were mixed. IT stocks also witnessed a mixed trend. Shares of state-run Punjab National Bank 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.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 447.90 crore yesterday, 5 August 2015, as per provisional data released by the stock exchanges. 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 early trade there. 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.

At 13:17 IST, the S&P BSE Sensex was up 10.23 points or 0.04% at 28,233.31. The index gained 91.32 points at the day's high of 28,314.40 in early 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 was up 10.95 points or 0.13% at 8,578.90. The index hit a high of 8,590.50 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, 1,406 shares declined and 1,312 shares rose. A total of 111 shares were unchanged.

The BSE Mid-Cap index was off 4.81 points or 0.04% at 11,539.65, underperforming the Sensex. The BSE Small-Cap index was up 6.75 points or 0.06% at 12,142.76, outperforming the Sensex.

Index heavyweight and cigarette major ITC dropped 1.96% to Rs 325.20. The stock hit a high of Rs 330 and low of Rs 324.45 so far during the day.

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 was up 0.16% at Rs 159.30. The stock hit a high of Rs 161.90 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.

Auto shares were mixed. TVS Motor Company (up 1.51%), Bajaj Auto (up 0.59%), Tata Motors (up 0.17%) and Mahindra & Mahindra (M&M) (up 0.09%), edged higher. Eicher Motors (down 0.15%), Hero MotoCorp (down 0.26%), Ashok Leyland (down 0.46%), Maruti Suzuki (India) (down 0.55%) and Escorts (down 1.42%), edged lower.

IT stocks were mixed. Tech Mahindra (down 2.6%), Hexaware Technologies (down 2.1%), Oracle Financial Services Software (down 0.89%), MphasiS (down 0.41%), Infosys (down 0.34%) and Wipro (down 0.19%), edged lower. CMC (up 0.42%), MindTree (up 0.51%), TCS (up 0.71%), HCL Technologies (up 0.91%) and Persistent Systems (up 1.14%), edged higher.

Nasdaq listed information technology, consulting and business process outsourcing services provider Cognizant Technology Solutions Corporation yesterday, 5 August 2015, raised its full year earnings per share (EPS) and revenue guidance after announcing its Q2 June 2015 earnings. Cognizant's GAAP net income rose 12.96% to $420.1 million on 22.6% increase in revenue to $3.09 billion in Q2 June 2015 over Q2 June 2014. GAAP diluted EPS stood at $0.68 in Q2 June 2015, up from $0.61 in Q2 June 2014. Non-GAAP diluted EPS stood at $0.79 in Q2 June 2015, up from $0.66 in Q2 June 2014.

Cognizant expects revenue to be at least $3.14 billion in Q3 September 2015. The non-GAAP diluted EPS is expected to be at least $0.75 in Q3. For the year ended 31 December 2015, the company expects revenue to be at least $12.33 billion, which is a growth of at least 20.1% over the year ended 31 December 2014. Non-GAAP diluted EPS is expected to be at least $3 for year ended 31 December 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 from 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. Brent for September settlement was currently off 14 cents at $49.45 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 63.8075, 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 early trade today, 6 August 2015. Key benchmark indices in UK, France and Germany were down by 0.11% to 0.46%.

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.

Meanwhile, the Bank of England (BoE) is widely expected to keep its key policy rate unchanged at 0.5% after a monetary policy review today, 6 August 2015. Starting today, 6 August 2015, the BOE will publish minutes of the Monetary Policy Committee's deliberations alongside its monthly policy decision. The minutes, which include a record of how individual policymakers voted, are usually published with a two-week lag. The central bank will also publish its quarterly inflation report. BOE Governor Mark Carney and other senior officials will host a press conference to explain their latest thinking on policy and the economic outlook after the conclusion of the monetary policy meeting.

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, Singapore, Taiwan, Hong Kong and South Korea fell by 0.09% to 1.09%. In Japan, the Nikkei 225 index rose 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.

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