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Bank stocks move higher

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After trimming gains in afternoon trade, key benchmark indices recovered in mid-afternoon trade. At 14:15 IST, the barometer index, the S&P BSE Sensex was up 194.65 points or 0.72% at 27,194.37. The Nifty 50 index was currently up 58.20 points or 0.7% at 8,345.95. The Sensex was currently trading above the psychologically important 27,000 level after regaining that level in early trade. The market sentiment was positive on the back of data showing substantial purchases of Indian stocks by foreign portfolio investors yesterday, 30 June 2016. Foreign portfolio investors (FPIs) bought shares worth a net Rs 1107.42 crore yesterday, 30 June 2016, as per provisional data released by the stock exchanges.

Meanwhile, the outcome of a monthly survey showed acceleration in growth in India's manufacturing sector last month. The Nikkei India manufacturing Purchasing Managers' Index (PMI) rose to 51.7 in June from 50.7 in May. The main contributing factors to the upward movement in the PMI were stronger rates of growth in new orders and output, both of which reached three-month highs in June.

In overseas stock markets, European shares extended their recent gains on media reports that the European Central Bank (ECB) is considering expanding its stimulus program. The European Central Bank is reportedly considering changing the rules regarding the types of bonds it can buy as part of its stimulus package amid concerns it could run out of securities to buy under current stipulations. Stocks edged higher in the UK for the second day in a row after Bank of England Governor Mark Carney said the UK economic outlook in has deteriorated and some monetary policy easing will likely be required over the summer. The FTSE 100 index was currently up 0.41%. Carney made the comments yesterday, 30 June 2016, in a speech to businesspeople and bankers.

Asian stocks edged higher tracking overnight gains on Wall Street. In mainland China, the Shanghai Composite closed 0.1% higher. Latest data showed that the manufacturing momentum in the world's second largest economy skidded to a four-month low in June. China's official manufacturing Purchasing Managers' Index (PMI) came in at 50 last month, against 50.1 logged in May and April. US stocks rose for a third straight trading session yesterday, 30 June 2016, on mounting expectations for more accommodative policies from global central banks following the UK's vote to leave the European Union last week.

Closer home, the market breadth indicating the overall health of the market was strong. On BSE, 1,569 shares rose and 1,005 shares declined. A total of 136 shares were unchanged. The BSE Mid-Cap index was currently up 1.41%. The BSE Small-Cap index was currently up 0.86%. Both these indices outperformed the Sensex.

Bank stocks edged higher on renewed buying. Among public sector banks, Union Bank of India (up 3.82%), Bank of India (up 4.01%), Bank of Baroda (up 2.08%), IDBI Bank (up 2.8%), State Bank of India (up 0.66%) and Corporation Bank (up 0.37%) rose.

Punjab National Bank (PNB) rose 0.28% at Rs 106.10. The bank announced lending rates based on marginal cost of funds to be effective from 1 July 2016. PNB's Marginal Cost of Funds based Lending Rate (MCLR) for overnight loans will be 9.15%, for one month will be 9.2% and for three months will be 9.3%. The MCLR on 6-month loans will be 9.35% and for one-year loans the rate would be 9.4%, the bank said. MCLR for three-year loans would be at 9.55% and loans with five-year maturity would carry an MCLR of 9.7%, the bank said. The announcement was made during market hours today, 1 July 2016.

Among private sector banks, Axis Bank (up 2.13%), IndusInd Bank (up 1.29%) and ICICI Bank (up 0.65%) edged higher. Kotak Mahindra Bank (down 1.02%) edged lower.

Index heavyweight HDFC Bank was up 0.48% at Rs 1,181.50 after the bank said it has launched SM Bank, India's first full-fledged digital banking service for small-and medium enterprises (SME). This will allow clients to access a complete suite of services instantly and round-the-clock on the device of their choice, be it a desktop, laptop, tablet or mobile, HDFC Bank said. The announcement was made during market hours today, 1 July 2016.

Yes Bank was up 2.03% at Rs 1,128.95. The bank during market hours today, 1 July 2016, said it has pledged GBP 1 million to the London School of Economics and Political Science (LSE) to support the IG Patel Chair - named in honour of the former Governor of the Reserve Bank of India and former Director of LSE.

Auto stocks edged higher. TVS Motor Company (up 0.81%), Mahindra & Mahindra (up 1.05%), Bajaj Auto (up 0.04%), Hero MotoCorp (up 0.01%) and Eicher Motors (up 0.33%) gained. Tata Motors (down 0.49%) edged lower.

Maruti Suzuki India (MSIL) lost 0.43% at Rs 4,166.95 after the company reported a 13.9% decline in total sales at 98,840 units in June 2016 over June 2015. Domestic sales dropped 10.2% to 92,133 units in June 2016 over June 2015. Exports fell 44.7% to 6,707 units in June 2016 over June 2015. The company announced the sales volume data during market hours today, 1 July 2016.

Separately, MSIL announced after market hours yesterday, 30 June 2016, that it signed a memorandum of understanding (MoU) with the state government of Andhra Pradesh to set up, manage and run Institute of Driving Training and Traffic Research at Venkatachalam village in Darsi, Prakasham district of the state. The infrastructure spread across 20 acres of land will be provided by the state government, while Maruti Suzuki will run and manage the institute.

Ashok Leyland rose 1.32% to Rs 99.90 after the company said its total sales rose 7% to 11,108 units in June 2016 over June 2015. Sales of medium & heavy commercial vehicles (M&HCV) rose 8% to 8,685 units in June 2016 over June 2015. Sales of light commercial vehicles (LCV) were up 0.4% at 2,423 units in June 2016 over June 2015. The company announced the sales volume data during market hours today, 1 July 2016.

Meanwhile, data released by the government after market hours yesterday, 30 June 2016, showed that the output of eight core Industries comprising nearly 38% of the weight of items included in the Index of Industrial Production (IIP) rose 2.8% in May 2016 over May 2015. Its cumulative growth stood at 5.5% in April-May 2016.

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First Published: Fri, July 01 2016. 14:13 IST