Key indices witness divergent trend in early trade

A divergent trend was witnessed among key benchmark indices in early trade. The market breadth indicating the overall health of the market was positive. The barometer index, the S&P BSE Sensex was currently up 21.32 points or 0.08% at 27,917.29. The 50-unit CNX Nifty was currently off 5.90 points or 0.07% at 8,392.10.

ICICI Bank dropped amid volatility after the bank after market hours yesterday, 25 June 2015, announced a reduction of 5 basis points (bps) in its base rate to 9.70% per annum (pa) from 9.75% with effect from 26 June 2015.

In overseas stock markets, Asian stocks edged lower today, 26 June 2015, as dwindling hopes of a Greek deal weighed on sentiment. US stocks closed lower yesterday, 25 June 2015, failing to hold initial gains, as lack of resolution between Greece and its creditors weighed on investor sentiment.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 280.21 crore yesterday, 25 June 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 8.45 crore yesterday, 25 June 2015, as per provisional data.

At 9:17 IST, the S&P BSE Sensex was up 21.32 points or 0.08% at 27,917.29. The index gained 25.89 points at the day's high of 27,921.86 in early trade. The index fell 26.94 points at the day's low of 27,869.03 in early trade.

The CNX Nifty was down 5.90 points or 0.07% at 8,392.10. The index hit a high of 8,398.20 in intraday trade. The index hit a low of 8,389.60 in intraday trade.

The BSE Mid-Cap index was down 13.38 points or 0.13% at 10,676.37, underperforming the Sensex. The BSE Small-Cap index was up 13.76 points or 0.12% at 11,123.06, outperforming the Sensex.

The market breadth indicating the overall health of the market was positive. On BSE, 560 shares rose and 415 shares fell. A total of 31 shares were unchanged.

ICICI Bank dropped amid volatility after the bank after market hours yesterday, 25 June 2015, announced a reduction of 5 basis points (bps) in its base rate to 9.70% per annum (pa) from 9.75% with effect from 26 June 2015. The stock was off 0.57% at Rs 313.70. The stock hit a high of Rs 315.40 and a low of Rs 311.90 so far during the day. With effect from 1 July 2010, interest rates on new loans and advances, including consumer loans, are determined with reference to the bank's base rate, ICICI Bank said.

The Reserve Bank of India (RBI) said in its half yearly Financial Stability Report (FSR) June 2015 published yesterday, 25 June 2015, that India's relatively stronger macroeconomic fundamentals in terms of growth, inflation, current account and fiscal deficits provide a reasonable degree of resilience to Indian financial system in the event of spill-over effects from global factors. However, with the continued uncertainty over global growth and in the absence of effective international monetary policy coordination, there can be no room for complacency, the report stated. The FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability, as also the resilience of the financial system.

The latest Financial Stability Report notes that there has been significant improvement in India's macroeconomic environment and going forward, economic performance is expected to be better. External vulnerability has reduced and progress has been made with regard to fiscal consolidation. While foreign portfolio flows to India have been strong during the past year, unexpected changes in monetary policy in advanced economies (AEs) may lead to slowdown/reversal of foreign portfolio flows, with implications for segments of financial markets, according to the report. According to the FSR, India is better prepared to deal with the volatility, as compared to previous episodes.

According to the FSR report, concerns emanating from rapid rise in algorithm trading in recent years highlight the need for caution for India's securities markets, while measures have been taken to address the same. Significant steps have been taken to tighten the regulations dealing with illegal money-raising activities and insider trading, and also to strengthen the risk management systems at depositories.

Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update issued yesterday, 25 June 2015, that the southwest monsoon has been further advanced into remaining parts of north Arabian Sea, Gujarat state, Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Uttarakhand, Punjab, East Rajasthan, entire Haryana, Chandigarh & Delhi and some parts of West Rajasthan. The southwest monsoon was vigorous over East Rajasthan, Gujarat Region and Saurashtra & Kutch and active over Jharkhand, Uttarakhand, Haryana, Chandigarh & Delhi, Himachal Pradesh, West Madhya Pradesh, Madhya Maharashtra and South interior karnataka during past 24 hours until 8:30 IST, the IMD said.

For the country as a whole, the cumulative rainfall during this year's monsoon season was 24% above the Long Period Average (LPA) until 24 June 2015. Region wise, the southwest monsoon was 52% above the LPA in Central India, 32% above the LPA in South Peninsula, 4% above the LPA in East & Northeast India and 5% below the LPA in Northwest India until 24 June 2015.

In a separate weekly monsoon report, the IMD said that the during the week, rainfall was above normal by 44% over the country as a whole. Rainfall activity was excess over Central India and South Peninsula, the IMD said.

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 stock markets, Asian stocks edged lower today, 26 June 2015, as dwindling hopes of a Greek deal weighed on sentiment. Key indices in China, Japan, Hong Kong, Singpore and Taiwan were off 0.23% to 4.32%. Key indices in South Korea and Indonesia were up 0.32% to 0.35%.

US stocks closed lower yesterday, 25 June 2015, failing to hold initial gains, as lack of resolution between Greece and its creditors weighed on investor sentiment.

In Europe, Greece and its international creditors remain in deadlock over its debt crisis despite a series of top-level meetings. Prime Minister Alexis Tsipras failed to reach a deal with Greece's lenders, then a meeting of European finance ministers broke up without progress.

Greece needs a deal to unlock new financing ahead of a 1.54 billion euro ($1.75 billion) debt payment due to the International Monetary Fund (IMF) on 30 June 2015. On the same day, Greece's international bailout expires. A default on its international creditors-the IMF and other eurozone governments-could force Greece into a messy exit from the euro.

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