Sensex, Nifty hit over two-week closing low

Key benchmark indices slumped on the first trading session of the month as European and Asian stocks dropped and as trading in US index futures indicated weak start for US stocks later in the global day. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest closing level in more than two weeks. The Sensex was down 414.13 points or 1.6% at 25,480.84. The market sentiment was also hit adversely after provisional data showed that foreign investors made heavy selling during the previous trading session. The market breadth indicating the overall health of the market was weak.

Metal stocks declined after ArcelorMittal, the world's largest steelmaker, at the time of announcing its Q2 results today, 1 August 2014, cut its forecast for earnings this year after lower than anticipated iron ore prices affected the profit of its mining business. Maruti Suzuki India gained after reporting strong sales in July. Hero MotoCorp gained after the company reported good sales in June. DLF rose in volatile trade after the company's Q1 results. Reliance Industries (RIL) dropped after the company said that there is no such proposal under consideration of 30% stake sale by the company in telecom unit Reliance Jio Infocomm. Capital goods stocks declined. IT stocks declined. NTPC extended Thursday's losses triggered by weak Q1 results.

Key indices extended losses in late trade after tumbling in mid-afternoon trade after witnessing intraday recovery in early afternoon trade. The Sensex and the Nifty remained in red right from the onset of the trading session due to weakness in Asian stocks and steep slide in US stocks on Thursday, 31 July 2014.

Key indices fell for the second day in a row today, 1 August 2014. From a recent high of 26,087.42 on 30 July 2014, the Sensex has declined 606.58 points or 2.32% in two trading sessions. The Sensex has gained 4,310.16 points or 20.35% in calendar year 2014 so far (till 1 August 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 8,032.13 points or 46.03%. From a record high of 26,300.17 on 25 July 2014, the Sensex has declined 819.33 points or 3.11%.

The S&P BSE Sensex was down 414.13 points or 1.6% to 25,480.84, its lowest closing level since 15 July 2014. The index slumped 435.84 points at the day's low of 25,459.13 in late trade. The index declined 32.29 points at the day's high of 25,862.68 in early afternoon trade.

The CNX Nifty was down 118.70 points or 1.54% to 7,602.60, its lowest closing level since 15 July 2014. The index hit a low of 7,593.90 and a high 7,716.70 in intraday trade.

The total turnover on BSE amounted to Rs 3340 crore, higher than Rs 2921.30 crore on Thursday, 31 July 2014.

The market breadth indicating the overall health of the market was weak. On BSE, 1,772 shares fell and 1,106 shares rose. A total of 117 shares were unchanged.

The BSE Mid-Cap index was down 73.86 points or 0.8% at 9,114.33. The BSE Small-Cap index was down 98.45 points or 0.99% at 9.890.97. Both these indices outperformed the Sensex.

Hero MotoCorp gained 0.11% after the company reported good sales in June. The company said during market hours its sales rose 9% to 5.29 lakh units in July 2014 over July 2013. The company also today, 1 August 2014, extended the tenure of its Chief Financial Officer (CFO) Mr. Ravi Sud by another two years till 31 July 2016.

Maruti Suzuki India gained 2.48% on strong sales in July. Maruti Suzuki India said during market hours that the company's total sales jumped 21.7% to 1.01 lakh units in July 2014 over July 2013. Domestic sales rose 19.9% to 90,093 units in July 2014 over July 2013. Exports rose 38.4% to 11,287 units in July 2014 over July 2013.

Maruti Suzuki India's net profit rose 20.7% to Rs 762.30 crore on 10.8% rise in net sales (net of excise) to Rs 11073.50 crore in Q1 June 2014 over Q1 June 2013. The car major said that cost reduction and localization initiatives, growth in volumes and favourable foreign exchange helped improve the bottom line during the quarter. The result was announced during market hours on Thursday, 31 July 2014.

NTPC dropped 2.93%, with the stock extending Thursday's losses triggered by weak Q1 results. The company's net profit fell 12.89% to Rs 2201.20 crore on 15.21% rise in total income to Rs 1885.14 crore in Q1 June 2014 over Q1 June 2013. The company announced results during market hours on Thursday, 31 July 2014.

IT stocks declined. Wipro (down 1.43%), TCS (down 2.36%), and Infosys (down 0.75%) edged lower.

Tech Mahindra dropped 1.08% to Rs 2,127.15 after the company reported a marginal rise in profitability in Q1 results. The stock hit high of Rs 2,134.90 and low of Rs 2,026.55. The company reported 2.7% growth in consolidated profit after tax at Rs 631 crore on 1.3% growth in revenue to Rs 5122 crore in Q1 June 2014 over Q4 March 2014. Operating profit (EBITDA) declined 13.4% to Rs 928 crore in Q1 June 2014 over Q4 March 2014. The result was announced after market hours on Thursday, 31 July 2014.

HCL Technologies dropped 2.53%, with the stock extending Thursday's losses. The company's consolidated net profit as per US GAAP rose 12.9% to Rs 1834 crore on 0.9% growth rise in revenue to Rs 8424 crore in Q4 June 2014 over Q3 March 2014. EBITDA (earnings before interest, taxes, depreciation and amortization) fell 0.7% to Rs 2216 crore in revenue to Rs 8424 crore in Q4 June 2014 over Q3 March 2014. EBITDA margin declined to 26.3% in Q4 June 2014, from 26.7% in Q3 March 2014. The result was announced before market hours on Thursday, 31 July 2014.

Capital goods stocks declined. Punj Lloyd (down 2.9%), ABB (India) (down 0.86%), L&T (down 2.14%), Siemens (down 1.8%) and Thermax (down 0.99%) declined.

Bharat Heavy Electricals (Bhel) fell 1.82% to Rs 224.25. The stock hit high of Rs 230.70 and low of Rs 223.10. The company said during market hours that it has commissioned another hydro generating unit of 68 megawatts (MW) at Rampur Hydro Electric Project (HEP) in Himachal Pradesh. With this, Bhel has successfully commissioned five units of the 412 MW HEP of Sutlej Jal Vidyut Nigam (SJVN). The sixth and last unit is in an advanced stage of execution and is likely to b commissioned by Bhel shortly.

Shares of most public sector oil marketing companies edged lower. BPCL (down 0.64%) and Indian Oil Corporation (IOC) (down 0.54%), edged lower. HPCL rose 0.76%.

PSU OMCs on Thursday, 31 July 2014, decided to increase retail diesel price by Rs 0.50 a litre and cut retail petrol prices by Rs 1.09 a litre in Delhi with effect from midnight of 31 July 2014. PSU OMCs, however, reduced the diesel price for bulk consumers by Rs 0.72 a litre at Delhi. Price of non-subsidized LPG cylinder was reduced by Rs 2.50 for a 14.2 kg cylinder and that of commercial LPG cylinder was reduced by Rs 4 for a 19kg cylinder at Delhi. The rates will vary from state to state depending on local taxes and levies.

The under-recovery on High Speed Diesel (HSD) applicable for 1st fortnight of August effective 1 August 2014 will go down to Rs 1.33 per litre. This was Rs 2.49 per litre during 2nd fortnight of July 2014. In the case of PDS Kerosene and Domestic LPG, the under-recoveries for the 1st fortnight of August 2014 will be Rs 32.98 per litre (Rs 33.07 per litre in last fortnight) and Rs 447.87 per cylinder (Rs 449.17 per cylinder in last fortnight) respectively. Oil Marketing Companies (OMCs), effective 1 August 2014, are now incurring combined daily under-recovery of about Rs 226 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is lower than Rs 261 crore daily under-recoveries during previous fortnight. The under-recoveries for the financial year 2014-15 are projected to be Rs 91,665 crore while the figure was Rs 1, 39,869 crore in the 2013-14. The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas reviewed international prices of crude oil and petroleum products during the 2nd fortnight of July 2014.

PSU OMCs suffer under-recovery on domestic sales of diesel, kerosene and LPG at government controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals. The government has already freed pricing of petrol.

Housing Development Finance Corporation (HDFC) declined 2.61%. The housing finance major after market hours on Thursday, 31 July 2014, in a clarification with regard to news item titled "Standard Life may Infuse More into HDFC Life" said that in the recent Union Budget, Finance Minister Arun Jaitley had proposed an increase in the composite cap in the insurance sector to 49% from the current level of 26%, with full management and control, through the FIPB route. On 24 July 2014, the Cabinet Committee on Economic Affairs headed by the Prime Minister Narendra Modi has cleared the said proposal and it is expected that the proposal will be tabled in Parliament in the current session. HDFC said it is monitoring the progress on this front and look forward to the details emerging.

In the meanwhile these developments have led to considerable speculation on HDFC's shareholding in its subsidiary, HDFC Standard Life Insurance Company (HDFC Life), HDFC said. The company said that there has been no decision on the change in the shareholding.

At an appropriate stage after Parliament approves and notifies the proposed amendments, HDFC may consider a revision in the shareholding pattern of HDFC Life in consultation with its joint venture partner, Standard Life Plc, HDFC said.

Reliance Industries (RIL) dropped 2.88% after the company said after market hours on Thursday, 31 July 2014, that there is no such proposal of 30% stake sale by the company in telecom unit Reliance Jio Infocomm and that there is no merit in the news floating in the market. Reliance issued this clarification with regard to the report captioned "Reliance Open to 30% stake sale in Jio". Reliance Jio Infocomm is a wholly owned subsidiary of Reliance Industries. The report had said RIL is open to offloading up to 30% stake in its telecom venture, Reliance Jio, to a global strategic partner in a move to unlock value.

DLF rose 2.14% to Rs 202.65 after announcing its Q1 results. The stock hit high of Rs 203.80 and low of Rs 190.20. The company's consolidated net profit fell 29.48% to Rs 127.77 crore on 24.52% fall in total income to Rs 1851.60 crore in Q1 June 2014 over Q1 June 2013. The result was announced after market hours on Thursday, 31 July 2014.

EBITDA (earnings before interest, taxes, depreciation and amortization) fell 18% to Rs 863 crore in Q1 June 2014 over Q1 June 2013.

DLF said that a slew of favourable measures for the realty sector in the Union Budget 2014-15 such as additional tax exemptions for consumers, categorization of affordable housing an infrastructure status and tax benefits to the REITs will go a long way in revival of the realty sector. The company said it expects the market conditions to be challenging and demanding in the short term. DLF believes that while the slowdown for the realty sector is bottoming out, it will take a couple of quarters for the ground situation to improve.

DLF said it remains committed to its medium term strategy of continuing with its execution run rate, thereby creating more stock which can result in better and faster realizations as the cycle turns. Additionally, the company will continue to invest to improve the quality of land through payment of government charges and infrastructural improvements. The company also remains focused to improve the quality and pricing of debt through instruments such as CMBSs, DLF said.

Metal stocks declined after ArcelorMittal, the world's largest steelmaker, at the time of announcing its Q2 results today, 1 August 2014, cut its forecast for earnings this year after lower than anticipated iron ore prices affected the profit of its mining business. Sesa Sterlite (down 2.62%), Hindalco Industries (down 3.71%), NMDC (down 0.29%), Jindal Steel & Power (down 2.91%), Tata Steel (down 0.76%), Steel Authority of India (Sail) (down 2.05%), National Aluminum Company (down 1.9%) and Hindustan Copper (down 1.35%) declined.

ArcelorMittal expects core profit to be above $7 billion, having previously given a figure of about $8 billion for the full year.

JSW Steel dropped 0.5% to Rs 1,173.95 after announcing Q1 results. The stock hit high of Rs 1,209 and low of Rs 1,149. The company reported consolidated net profit of Rs 656.49 crore in Q1 June 2014 compared with consolidated net loss of Rs 381.82 crore in Q1 June 2013. Total income rose 29.32% to Rs 13307.74 crore in Q1 June 2014 over Q1 June 2013. The company announced result during market hours.

The market sentiment was hit adversely after provisional data showed that foreign investors made heavy selling during the previous trading session. Foreign portfolio investors (FPIs) sold shares worth a net Rs 1654.86 crore on Thursday, 31 July 2014, as per provisional data from the stock exchanges.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.075, compared with its close of 60.54 on Thursday, 31 July 2014.

Markit Economics today, 1 August 2014, said that the HSBC India Purchasing Managers' Index (PMI) -- a composite gauge designed to give an accurate overview of operating conditions in the manufacturing sector -- reached a 17-month peak of 53 in July, up from 51.5 in June. Details within the survey showed that all monitored categories witnessed a rise in output and order flows. However, employment deteriorated fractionally, while inflationary pressures continued to emerge, particularly on the supply-side.

The index of the eight core industries rose 7.3% in June 2014 over June 2013, data released by the government after trading hours on Thursday, 31 July 2014, showed. The eight core industries have a combined weight of 37.9% in the Index of Industrial Production (IIP).

India's fiscal deficit target for the current fiscal year is "daunting", Finance Minister Arun Jaitley reportedly said today, 1 August 2014. The fiscal deficit for the first quarter of the fiscal year ending 31 March 2015 (FY 2015) was at Rs 297859 crore, which amounted to 56.1% of the budget estimates, data released by the government after market hours on Thursday, 31 July 2014, showed. The month of June 2014 saw a fiscal deficit of Rs 57022 crore, against a fiscal deficit of Rs 127383 crore in May 2014.

US Secretary of State John Kerry reportedly told Prime Minister Narendra Modi today, 1 August 2014, that India's refusal to sign a global trade deal had sent the wrong signal, and urged New Delhi to work to resolve the row as soon as possible.

The World Trade Organization reportedly failed on Thursday to reach a deal to standardise customs rules, which would have been the first global trade reform in two decades but was blocked by India's demands for concessions on agricultural stockpiling. The deadline passed without a breakthrough. WTO ministers had already agreed the global reform of customs procedures known as "trade facilitation" last December, but it needed to be put into the WTO rule book by 31 July 2014.

European stocks slumped today, 1 August 2014, as companies including ArcelorMittal (MT) posted worse-than-forecast earnings. Key benchmark indices in UK, France and Germany were off 1.35% to 1.95%.

UK manufacturing grew at the slowest pace in a year in July as a cooling in new orders and output ended the first half's stellar growth spurt, Markit Economics said today. An industry index slipped to 55.4 from a revised 57.2 in June, the London-based data provider said.

Developments in Latin America will be closely watched as Argentina missed a deadline yesterday to pay $539 million in interest after two full days of negotiations in New York failed to produce an accord with creditors.

S&P declaring Argentina in default melded with concern over Europe's debt position as Portugal's Banco Espirito Santo SA was told to raise capital. Banco Espirito Santo SA plunged by the most on record and the bonds slumped on Thursday, 31 July 2014, after the Portuguese lender was ordered to raise capital following a 3.6 billion euro ($4.8 billion) first-half net loss.

Asian stocks dropped today, 1 August 2014, extending the biggest global rout in six months that saw the Dow Jones Industrial Average wipe out this year's gains in one session yesterday amid weaker earnings and credit-market concerns. Key benchmark indices in Hong Kong, China, Singapore, Japan, South Korea and Taiwan were off 0.15% to 0.91%.

China's manufacturing purchasing managers' index increased to 51.7 in July from 51 the previous month, according to data released today by the National Bureau of Statistics and China Federation of Logistics. A private gauge of factory activity from HSBC Holdings Plc and Markit Economics rose to 51.7 last month from 50.7 in June. Levels of 50 or higher signal expansion.

Trading in US index futures indicated that the Dow could all 98 points at the opening bell on Friday, 1 August 2014. US stocks joined a global selloff on Thursday, 31 July 2104, erasing the year's gains for the Dow Jones Industrial Average, as Exxon Mobil Corp. to Micron Technology Inc. tumbled amid weaker corporate results.

Powered by Capital Market - Live News