Banking, cement, pharma stocks and index heavyweights HDFC, ITC, Reliance Industries (RIL) and L&T led a strong intraday rebound on the domestic bourses. After trimming losses in afternoon trade, benchmark indices moved into the green from red later as European stocks and US index futures trimmed intraday losses. However, by the time India's stock markets had closed at 15:30 IST, European stocks had weakened once gain. Asian and European stocks edged lower today, 6 July 2015, after Greek voters overwhelmingly rejected reform measures put forward by the country's international creditors in a referendum held yesterday, 5 July 2015, a result seen as increasing the chances of Greece exiting the shared currency viz. the euro. The strong intraday rebound for key benchmark indices in India materialised as global crude oil prices slumped. The decline in crude oil prices augur well for India.
The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, attained their highest closing level in more than eleven weeks. The Sensex retained the psychological 28,000 mark. Earlier, the Sensex had fallen below psychological 28,000 mark as key equity benchmark indices in India opened with a downward gap after Greek voters overwhelmingly rejected reform measures put forward by the country's international creditors in a referendum held yesterday, 5 July 2015, a result seen as increasing the chances of Greece exiting the shared currency. The Sensex rose 115.97 points or 0.41% to settle at 28,208.76. The BSE Small-Cap index rose 1.09%, outperforming the Sensex. The market breadth indicating the overall health of the market was strong.
Shares of Kotak Mahindra Bank rose on reports the Foreign Investment Promotion Board (FIPB) on Friday, 3 July 2015, cleared the bank's proposal to raise foreign investment limit to 55% from 49%.
Key benchmark indices edged higher for the second consecutive trading session today, 6 July 2015.
Foreign portfolio investors (FPIs) bought shares worth Rs 351.19 crore from the secondary equity market during the previous trading session on Friday, 3 July 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) sold shares worth a net Rs 220.61 crore on Friday, 3 July 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged lower after Greek voters overwhelmingly rejected reform measures put forward by the country's international creditors in a referendum held yesterday, 5 July 2015, a result seen as increasing the chances of Greece exiting the shared currency. Earlier during the global day, Asian stocks edged lower as people of Greece voted against accepting further austerity in a referendum held yesterday, 5 July 2015, increasing the risk of the country's exit from the euro zone.
The S&P BSE Sensex rose 115.97 points or 0.41% to settle at 28,208.76, its highest closing level since 17 April 2015. The index jumped 142.52 points at the day's high of 28,235.31 in late trade. The index lost 317.99 points at the day's low of 27,774.80 in early trade, its lowest level since 30 June 2015.
The Nifty rose 37.25 points or 0.44% to settle at 8,522.15, its highest closing level since 17 April 2015. The index hit a high of 8,533.15 in intraday trade. The index hit a low of 8,386.15 in intraday trade, its lowest level since 1 July 2015.
The market breadth indicating the overall health of the market was strong. On BSE, 1,792 shares rose and 1,004 shares fell. A total of 146 shares were unchanged.
The BSE Mid-Cap index rose 92.77 points or 0.85% to settle at 10,962.77. The BSE Small-Cap index rose 123.41 points or 1.09% to settle at 11,426.99. Both theses indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2758 crore, higher than turnover of Rs 2363.28 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Healthcare index (up 1.66%), the S&P BSE Oil & Gas index (up 1.10%), the S&P BSE Realty index (up 0.74%), the S&P BSE FMCG index (up 0.66%), the S&P BSE Bankex (up 0.50%) and the S&P BSE Capital Goods index (up 0.50%), outperformed the Sensex. The S&P BSE Auto index (up 0.28%), the S&P BSE Power index (up 0.27%), the S&P BSE IT index (up 0.03%), the S&P BSE Teck index (down 0.02%), the S&P BSE Metal index (down 0.62%) and the S&P BSE Consumer Durables index (down 0.92%), underperformed the Sensex.
Index heavyweight and cigarette major ITC rose 0.87% to Rs 318.25. The stock hit a high of Rs 318.55 and a low of Rs 312.05 in intraday trade.
The Reserve Bank of India (RBI) on Friday, 3 July 2015, clarified that foreign direct investment (FDI) is prohibited in manufacturing of cigars, cheroots, cigarillos and cigarettes of tobacco or of tobacco substitutes. The RBI clarified that the prohibition applies only to manufacturing of these tobacco products and that FDI in other activities relating to these products, including wholesale cash and carry, retail trading etc. shall be governed by the sectoral restrictions laid down in the FDI policy framed by the Department Of Industrial Policy & Promotion, Ministry of Commerce and Industry, Government of India and in the Schedule 1 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 as amended from time to time.
Index heavyweight Reliance Industries (RIL) rose 0.85% to Rs 1,015.30. The stock hit a high of Rs 1,018.85 and a low of Rs 996 in intraday trade.
Index heavyweight and IT major Infosys fell 0.65% to Rs 983.50. The stock hit a high of Rs 988.25 and a low of Rs 975.50 in intraday trade.
Index heavyweight and housing finance major HDFC advanced 0.14% to Rs 1,317.95. The stock hit high of Rs 1,321 and low of Rs 1,299.90.
Index heavyweight and engineering and construction major L&T advanced 0.46% to Rs 1,816.10. The stock hit high of Rs 1,822 and low of Rs 1,776.60.
PSU bank stocks were in demand. IDBI Bank (up 4.41%), UCO Bank (up 2.35%), Indian Bank (up 2.18%), Bank of India (up 2.10%), Canara Bank (up 2.07%), Union Bank of India (up 1.76%), Andhra Bank (up 1.67%), Bank of Baroda (up 1.66%), Central Bank of India (up 1.62%), Allahabad Bank (up 1.53%), Syndicate Bank (up 1.53%), Punjab National Bank (up 1.20%), Dena Bank (up 0.89%), State Bank of India (up 0.76%), Vijaya Bank (up 0.60%), Punjab and Sind Bank (up 0.47%) and United Bank of India (up 0.41%), edged higher. Bank of Maharashtra lost 1.58%.
Shares of private sector banks were mixed. HDFC Bank (up 0.81%), IndusInd Bank (up 0.55%), Federal Bank (up 0.45%) and ICICI Bank (up 0.29%) edged higher. Yes Bank (down 0.25%), Axis Bank (down 0.34%) and City Union Bank (down 1.27%) edged lower.
Kotak Mahindra Bank rose 1.08% to Rs 1,443.25. As per reports, the Foreign Investment Promotion Board (FIPB) on Friday, 3 July 2015 cleared the bank's proposal to raise foreign investment limit to 55% from 49%. Kotak Mahindra Bank had approached FIPB after the Reserve Bank of India barred overseas investments in the bank as foreign shareholding hit the permissible threshold following the merger of ING Vysya Bank with Kotak Mahindra Bank.
Cement stocks edged higher on renewed buying. Ambuja Cements (up 1.94%), UltraTech Cement (up 1.73%) and Shree Cement (up 0.64%) gained.
ACC rose 1.48% to Rs 1,503.70. ACC said after market hours on Friday, 3 July 2015, that the limestone mining operations at company's Chaibasa cement works have been suspended on account of requirement of further clearances from the state government of Jharkhand. The company is in discussion with the concerned authorities in this regard and expects that limestone mining operations would resume shortly, ACC said. Cement grinding continues with transfer of clinker from sister works/purchase of clinker, it added. The impact of the closure of the mining operations at Chaibasa is not expected to be material, ACC said.
Grasim Industries was up 1.36% at Rs 3,551.80. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Pharmaceutical shares were in demand. Strides Arcolab (up 4.03%), Dr Reddy's Laboratories (up 3.64%), Cipla (up 3.35%), Divi's Laboratories (up 2.58%), Aurobindo Pharma (up 2.07%), Wockhardt (up 1.94%), Lupin (up 1.05%), IPCA Laboratories (up 0.94%), Sun Pharmaceutical Industries (up 0.91%), GlaxoSmithKline Pharmaceuticals (up 0.29%) and Piramal Enterprises (up 0.01%), edged higher. Glenmark Pharmaceuticals (down 0.06%) and Cadila Healthcare (down 0.73%) edged lower.
Key benchmark indices edged higher for the second consecutive trading session today, 6 July 2015. The Sensex has risen 262.96 points or 0.94% in the preceding two trading sessions from a recent low of 27,945.80 on 2 July 2015. The Sensex has risen 427.93 points or 1.54% in this month so far (till 6 July 2015). The Sensex has risen 709.34 points or 2.58% in this calendar year so far (till 6 July 2015). From a 52-week low of 24,892 on 14 July 2014, the Sensex has risen 3,316.76 points or 13.32%. The Sensex is off 1,815.98 points or 6.05% from a record high of 30,024.74 hit on 4 March 2015.
In global commodities markets, Brent crude oil futures edged lower after Greece rejected austerity measures demanded in return for bailout money, increasing the chances of the country having to abandon the euro. Brent for August settlement was currently off $1.44 a barrel at $58.88 a barrel. The contract lost 4.7% last week.
The decline in global crude oil prices and deregulation of diesel price announced by the Indian government in October 2014 will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.
Meanwhile, the monsoon has entered a weak phase if the data released by the India Meteorological Department (IMD) is any indication. For the country as a whole, cumulative rainfall during this year's monsoon season was near normal until 5 July 2015. This is a far cry when compared to a reading 24% above the Long Period Average (LPA) for the South West monsoon until 24 June 2015. Region wise, the southwest monsoon was 5% above the Long Period Average (LPA) in Northwest India, 2% above the LPA in Central India, 2% above the LPA in South Peninsula and 4% below the LPA in East & Northeast India until 5 July 2015.
The IMD said in its daily monsoon update issued yesterday, 5 July 2015, that the Southwest Monsoon was active over Arunachal Pradesh and Sub-Himalayan West Bengal & Sikkim and Normal over Assam & Meghalaya, Gangetic West Bengal, Jharkhand, Bihar and Coastal Karnataka during past 24 hours until 8:30 IST.
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.
Meanwhile, the weekly data released by the Ministry of Agriculture after trading hours on Friday, 3 July 2015, showed that the sowing of Kharif crops is gathering pace. The total sown area for Kharif crops as on 3 July 2015 stood at 306.06 lakh hectares compared with 194.25 lakh hectares at this time last year. July is the crucial month for the sowing of Kharif crops.
In overseas markets, European stocks edged lower in early trade today, 6 July 2015, after Greek voters overwhelmingly rejected reform measures put forward by the country's international creditors in a referendum held yesterday, 5 July 2015, a result seen as increasing the chances of Greece exiting the shared currency. Key indices in Germany, UK and France were off 0.58% to 1.5%. In Spain, the IBEX 35 index was currently off 1.81%. In Italy, the FTSE MIB index was currently off 2.68%.
In Sunday's referendum, more than 61% of Greeks voted "no" to austerity measures and other overhauls that European and International Monetary Fund officials had wanted in recent talks on further bailout aid. Greece has now entered unknown economic and financial territory, with no clear path to continued European aid. Eurozone leaders will reportedly hold an emergency meeting in Brussels tomorrow, 7 July 2015, to work out their response to the Greek vote and the next steps in any negotiations, which have been stalled since the referendum was announced. Meanwhile, Yanis Varoufakis resigned as Greece's finance minister today, 6 July 2015, a day after Greeks voted resoundingly to reject the austerity terms of a bailout.
Meanwhile, the European Central Bank's (ECB) Governing Council will reportedly hold a conference call today, 6 July 2015, to discuss Greece's monetary lifeline, the Emergency Liquidity Assistance program, which provides vital funds to the country's financial system.
The Greece government will now try to renegotiate a new bailout package with the lenders. Greece had been locked in negotiations with its creditors for months when the Greek government unexpectedly called a referendum on the terms it was being offered. Banks have been shut and capital controls in place since last Monday, after the ECB declined to give Greece more emergency funding. Withdrawals at cash machines have been limited to euro 60 per day.
Greece is due to pay 3.5 billion euros ($3.9 billion) to the ECB on 20 July 2015. If it misses that payment, the ECB is widely expected to cut off emergency funding to Greek banks, a move that would likely lead to their collapse.
Asian stocks edged lower today, 6 July 2015, as Greece voted against accepting further austerity, increasing the risk of the country's exit from the euro zone. Key benchmark indices in Singapore, Taiwan, Hong Kong, Japan, Indonesia and South Korea were off 0.29% to 3.18%.
Stocks in mainland China witnessed immense volatility. The Shanghai Composite index rose 2.41% to settle at 3,775.91. China unleashed an unprecedented series of support measures over the weekend to stave off the prospect of a full-blown crash that was threatening to destabilise the world's second-biggest economy. The Shanghai Composite index had slumped more than 12% last week. In an extraordinary weekend of policy moves, brokerages and fund managers vowed to buy massive amounts of stocks, helped by China's state-backed margin finance company, which in turn would be aided by a direct line of liquidity from the central bank. In a series of initial announcements on Saturday, 4 July 2015, China's top brokerages pledged to collectively buy at least 120 billion yuan ($19.3 billion) of shares to help steady the market, and said they would not sell while the Shanghai Composite Index remained below 4,500, a level last seen on 25 June 2015.
Separately, a total of 94 mutual fund companies pledged to buy shares. Meanwhile, 28 companies that had been approved to launch IPOs announced they had suspended their plans.
Trading in US index futures indicated that the Dow could slide 121 points at the opening bell today, 6 July 2015.
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