Key benchmark indices registered small losses in the first trading session of the week today, 20 July 2015. Key indices pared intraday losses towards the last one hour or so of the trading session. Key indices once again extended losses towards the close of the trading session. The barometer index, the S&P BSE Sensex was provisionally off 54.89 points or 0.19% to 28,408.42. The 50-unit CNX Nifty was provisionally off 6.40 points or 0.07% at 8,603.45. The decline in the Nifty in percentage terms was lower than the Sensex's decline on provisional basis as cement stocks viz. UltraTech Cement, Ambuja Cements and Grasim Industries which are part of Nifty but are not in Sensex edged higher. The market breadth indicating the overall health of the market was positive.
Cement stocks edged higher. UltraTech Cement shrugged off weak Q1 earnings. ACC dropped after the company reported weak Q2 numbers after market hours on Friday, 17 July 2015. Punjab National Bank (PNB) dropped on reports that a foreign brokerage has reiterated its 'underweight' stance on the stock.
In overseas stock markets, European stocks gained today, 20 July 2015. Asian stocks edged lower today, 20 July 2015. US stocks closed mixed on Friday, 17 July 2015, but posted solid gains for the week, as strong earnings boosted the Nasdaq to another record high.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 605.56 crore during the previous trading session on Friday, 17 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 175.15 crore during the previous trading session on Friday, 17 July 2015, as per provisional data.
As per provisional figures, the S&P BSE Sensex was down 54.89 points or 0.19% to 28,408.42. The index fell 143.48 points at the day's low of 28,319.83 in early afternoon trade, its lowest level since 16 July 2015. The index gained 85.82 points at the day's high of 28,549.13 in early trade.
The CNX Nifty was down 6.40 points or 0.07% at 8,603.45, as per provisional figures. The index hit a low of 8,559 in intraday trade, its lowest level since 16 July 2015. The index hit a high of 8,624.10 in intraday trade.
The BSE Mid-Cap index was up 29.92 points or 0.27% at 11,250.10. The BSE Small-Cap index was up 42.51 points or 0.36% at 11,758.88. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,550 shares gained and 1,270 shares fell. A total of 108 shares were unchanged.
The total turnover on BSE amounted to Rs 2764 crore, lower than turnover of Rs 2944.85 crore registered during the previous trading session on Friday, 17 July 2015.
Cement stocks edged higher. Ambuja Cements (up 0.52%) edged higher. Shree Cement (down 2.3%) edged lower.
UltraTech Cement shrugged off weak Q1 earnings. The stock was up 4.02% at Rs 3,346.05. UltraTech Cement's consolidated net profit declined 5.89% to Rs 591 crore on 6.39% growth in net sales to Rs 6372 crore in Q1 June 2015 over Q1 June 2014. The result was announced during market hours today, 20 July 2015.
UltraTech Cement's profit before interest, depreciation and taxation (PBIDT) declined 1.08% to Rs 1282 crore in Q1 June 2015 over Q1 June 2014.
The scheme of arrangement between the company and Jaiprakash Associates (JAL) and their shareholders and creditors for acquisition of the cement units of JAL situated at Bela and Sidhi in Madhya Pradesh, having a capacity of 4.9 million tonnes per annum (MTPA) together with a thermal power generation capacity of 180 megawatts (MW) TPP has been approved by the shareholders and creditors of the company. The Competition Commission of India (CCI) has already approved the transaction, UltraTech Cement said. The transaction is now subject to approval from the high courts and getting all regulatory approvals, it added.
With regard to future business outlook, UltraTech Cement said that with the Government's focus on infrastructure development, housing sector, smart cities, roads etc., the company is positioned across the country to meet the expected rise in demand for cement and participate in the next phase of growth in the country.
Grasim Industries was up 2% at Rs 3,772. Grasim has exposure to cement sector through its holding in UltraTech Cement.
ACC dropped after the company reported weak Q2 numbers after market hours on Friday, 17 July 2015. The stock was off 1.55% at Rs 1,461.10. ACC's consolidated net profit fell 45.11% to Rs 133.46 crore on 1.58% decline in sales turnover to Rs 2961.21 crore in Q2 June 2015 over Q2 June 2014.
ACC's operating EBITDA (earnings before interest, taxation, depreciation and amortization) dropped 25.86% to Rs 335.16 crore in Q2 June 2015 over Q2 June 2014.
ACC's cement sales volume declined 2.36% to 6.20 million tonnes in Q2 June 2015 over Q2 June 2014.
During the quarter, the cement market was challenging and the company's sales volumes were subdued, ACC said. Overall construction activity remained dull with weak expenditure on infrastructure and housing sectors leading to lack-lustre demand for cement, it added. Surplus capacity in the industry heightened competition and made cement prices volatile, ACC said in a statement.
With regard to update on ongoing projects, ACC said that the Jamul clinkering project is scheduled to be commissioned by the end of 2015 while the cement grinding units at Jamul and Sindri are expected to commence in Q1 2016, which is a delay of around one quarter.
On future business outlook, ACC said it expects demand for cement to pick up gradually over the next couple of quarters, with the government's increasing focus on infrastructure development as well as on the promising new projects of Smart Cities and Housing For All. Interest rates are expected to soften further in the coming months, which may translate to increased participation by retail home buyers, ACC said. Meanwhile, the company will maintain its thrust on controlling costs and emphasis on market oriented initiatives, ACC said in a statement.
Punjab National Bank (PNB) dropped on reports that a foreign brokerage has reiterated its 'underweight' stance on the stock. The stock was off 2.94% at Rs 140.55. The brokerage reportedly said that elevated credit costs of PNB will likely keep re-rating at bay and reverting back to historical high profitability would be very difficult. The brokerage further added that given the weakness in PNB's balance sheet, one should expect further cuts.
Meanwhile, India's weather office, the India Meteorological Department (IMD), said in its daily monsoon update issued yesterday, 19 July 2015, that the Southwest Monsoon was vigorous over Nagaland, Manipur, Mizoram & Tripura and West Madhya Pradesh and active over Haryana, Chandigarh & Delhi, South Interior Karnataka and Kerala during 24 hours ending until 8:30 IST.
For the country as a whole, cumulative rainfall during this year's monsoon season was 8% below the Long Period Average (LPA) until 19 July 2015. Region wise, the southwest monsoon was 10% above the LPA in Northwest India, 6% below the LPA in East & Northeast India, 13% below the LPA in South Peninsula and 16% below the LPA in Central India until 19 July 2015.
The quantum of and the spatial distribution of rainfall this month holds key, with July being a crucial month for the sowing of Kharif crops. 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, 17 July 2015, showed a pick up in the sowing of Kharif crops. The total sown area for Kharif crops as on 17 July 2015 stood at 563.35 lakh hectares compared with 346.34 lakh hectares at this time last year. July is the crucial month for the sowing of Kharif crops.
Meanwhile, the Ministry of Water Resources announced in its weekly report issued after trading hours on Friday, 17 July 2015, that the water storage available in 91 important reservoirs of the country was 51.22 BCM as on 16 July 2015, which is 33% of total storage capacity of these reservoirs. This storage is 133% of the storage of corresponding period of last year and 112% of storage of average of last ten years. The present storage position during current year is better than the storage position of last year and is also better than the storage of average of last ten years.
Meanwhile, the three-week monsoon session of Parliament will begin tomorrow, 21 July 2015, as per reports. The government is looking forward to push through key bills and get approval for the recently-promulgated ordinances in the monsoon session of the Parliament.
In overseas stock markets, European stocks edged higher today, 20 July 2015. Key indices in Germany, France and UK rose 0.49% to 1.08%.
Lower energy prices pulled down German factory-gate prices in June, data from the federal statistics office showed today, 20 July 2015. Producer prices slipped 0.1% from May and were down 1.4% from June 2014.
Banks in Greece opened today, 20 July 2015, for the first time in three weeks, media reports said. Capital controls remain in place, and customers are now restricted to withdrawals of 420 euros ($456) a week, rather than the 60 a day previously imposed. Other restrictions, such as on sending money overseas, are still in force. Greek banks have been shuttered since June 29, after the European Central Bank capped emergency liquidity assistance to the institutions. Greece faces a 4.2 billion debt payment to the ECB today, 20 July 2015, which Athens is expected to repay using an EU bridge loan of 7.16 billion approved last week.
Asian stocks edged lower today, 20 July 2015. Key indices in Hong Kong, Taiwan and South Korea were off 0.04% to 0.78%. Key indices in China and Singapore were up 0.57% to 0.91%. Stock markets in Japan and Indonesia were shut for public holidays.
US stocks closed mixed on Friday, 17 July 2015, but posted solid gains for the week, as strong earnings boosted the Nasdaq to another record high.
Federal Reserve Vice Chair Stanley Fischer reportedly said on Friday, 17 July 2015, that there should be no further limits put on the US central bank's emergency lending powers. Fischer reportedly said the Fed could work with the post-financial crisis restrictions on the types of companies it could lend to. But he said the process had gone as far as it should, reports added.
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