The rally on the bourses gathered steam, with key benchmark indices surging in mid-afternoon trade. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, hit one-week high. The Sensex was currently trading above the psychological 28,000 level, having alternately moved above and below that level so far during the trading session. Earlier, the Sensex had fallen below the psychological 28,000 level after moving past that mark in mid-morning trade. The market breadth indicating the overall health of the market was strong. The Sensex was currently up 426.37 points or 1.54% at 28,131.72. The BSE Mid-Cap index was up 1.28%. The BSE Small-Cap index was up 1.02%.
Key benchmark indices surged today, 31 July 2015, after the Department of Industrial Policy & Promotion (DIPP) issued a notification yesterday, 30 July 2015, introducing composite caps for simplification of the foreign direct investment (FDI) policy for attracting foreign investments in the country. It may be recalled that the Union Cabinet had on 16 July 2015 approved clubbing of foreign direct investment, foreign portfolio investment and investments by non-resident Indians in companies into a composite cap.
Shares of Dr Reddy's Laboratories hit a record high, with the stock extending gains registered yesterday, 30 July 2015, triggered by good Q1 earnings. PSU bank stocks surged on reports that the government has sought approval for an additional allotment of Rs 12110 crore from the Parliament to be used for the recapitalization of public sector banks. Most private sector banks rose.
Foreign portfolio investors sold shares worth a net Rs 170.68 crore yesterday, 30 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 499.65 crore yesterday, 30 July 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged reversed initial gains. Asian stocks edged higher after data overnight showed the US economy picked up its pace in the second quarter. US stocks ended little changed after witnessing high intraday volatility yesterday, 30 July 2015, after the latest data showed the US economy picked up its pace in the second quarter, leaving the Federal Reserve on track to raise interest rates as soon as September.
At 14:16 IST, the S&P BSE Sensex was up 426.37 points or 1.54% at 28,131.72. The index jumped 434.17 points at the day's high of 28,139.52 in mid-afternoon trade, its highest level since 24 July 2015. The index gained 109.16 points at the day's low of 27,814.51 in opening trade.
The CNX Nifty was up 113 points or 1.34% at 8,534.80. The index hit a high of 8,542.75 in intraday trade, its highest level since 24 July 2015. The index hit a low of 8,448 in intraday trade.
The BSE Mid-Cap index was up 143.08 points or 1.28% at 11,301.48. The BSE Small-Cap index was up 119.07 points or 1.02% at 11,842.95. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,727 shares rose and 1,017 shares fell. A total of 120 shares were unchanged.
Shares of Dr Reddy's Laboratories edged higher, with the stock extending gains registered yesterday, 30 July 2015, triggered by good Q1 earnings. The stock jumped 3.19% at Rs 4,032.20. The stock hit a record high of Rs 3,933 in intraday trade. The stock had jumped 5.23% to settle at Rs 3,907.55 yesterday, 30 July 2015. On a consolidated basis, the company's net profit rose 14% to Rs 630 crore on 7% increase in revenue to Rs 3760 crore in Q1 June 2015 over Q1 June 2014. The result was announced during trading hours yesterday, 30 July 2015.
PSU bank stocks surged on reports that the government has sought approval for an additional allotment of Rs 12110 crore from the Parliament to be used for the recapitalization of public sector banks. Union Bank of India (up 7.60%), IDBI Bank (up 7.19%), United Bank of India (up 5.53%), Punjab and Sind Bank (up 5.07%), Canara Bank (up 5.06%), Bank of Baroda (up 4.75%), Syndicate Bank (up 4.73%), Bank of India (up 4.31%), Allahabad Bank (up 4.14%), Andhra Bank (up 3.85%), UCO Bank (up 3.82%), Vijaya Bank (up 3.36%), Indian Bank (up 3.13%), Punjab National Bank (up 2.97%), Corporation Bank (up 2.91%), Dena Bank (up 2.83%), Central Bank of India (up 2.72%) and Bank of Maharashtra (up 1.98%), edged higher.
State Bank of India was up 6.03% at Rs 272.40. The stock hit a high of Rs 272.70 and a low of Rs 257.80 so far during the day.
Finance Minister Arun Jaitley has reportedly sought parliamentary approval today, 31 July 2015, to spend a net additional Rs 25500 crore in the current fiscal year, with almost half of it earmarked to inject capital into state-run banks struggling with bad debts. In the annual budget in February, Jaitley provided Rs 7940 crore to bolster capital reserves of the state-banks.
Most private sector banks rose. Yes Bank (up 2.71%), Axis Bank (up 1.60%), Federal Bank (up 0.66%) and IndusInd Bank (up 0.64%), edged higher. HDFC Bank (down 0.11%), City Union Bank (down 0.35%) and Kotak Mahindra Bank (down 1.96%), edged lower.
ICICI Bank was up 5.02% to Rs 305.55. The bank's net profit rose 12.08% to Rs 2976.16 crore on 8.11% increase in total income to Rs 15802.45 crore in Q1 June 2015 over Q1 June 2015. The result was announced during trading hours today, 31 July 2015.
ICICI Bank's net interest income (NII) rose 14% to Rs 5115 crore in Q1 June 2015 over Q1 June 2014. The bank's net interest margin (NIM) improved to 3.54% in Q1 June 2015, from 3.4% in Q1 June 2014. Non interest income rose 5% to Rs 2990 crore in Q1 June 2015 over Q1 June 2014.
ICICI Bank's cost-to-income ratio stood at 37.8% in Q1 June 2015 as against 38.4% in Q1 June 2014.
The bank's current and savings account (CASA) ratio stood at 44.1% as on 30 June 2015, lower than 45.5% as on 31 March 2015 and higher than 43% as on 30 June 2014. The average CASA ratio improved to 41.1% in Q1 June 2015 from 39.9% in Q4 March 2015 and 39.5% in Q1 June 2014.
Provisions and contingencies rose 31.58% to Rs 955.39 crore in Q1 June 2015 over Q1 June 2014. The bank's provision coverage ratio, computed in accordance with RBI guidelines, was 58.2% as on 30 June 2015. Including cumulative prudential/technical write-offs, the provisioning coverage ratio was 69.7%.
ICICI Bank's net non-performing assets stood at Rs 6402 crore as on 30 June 2015, which was higher than Rs 6325 crore as on 31 March 2015. The net non-performing asset ratio was 1.4% as on 30 June 2015, unchanged from the level as on 31 March 2015. Net loans to companies whose facilities have been restructured stood at Rs 12604 crore as on 30 June 2015, higher than Rs 11017 crore as on 31 March 2015.
The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 16.37% as on 30 June 2015 and Tier-1 capital adequacy was 12.26%, well above regulatory requirements.
Auto stocks were in demand. Hero MotoCorp (up 3.55%), Mahindra & Mahindra (M&M) (up 3.42%), Tata Motors (up 2.36%), Escorts (up 1.47%), Maruti Suzuki (India) (up 0.85%), TVS Motor Company (up 0.23%) and Bajaj Auto (up 0.10%), edged higher. Ashok Leyland (down 0.18%) and Eicher Motors (down 0.32%), edged lower.
Meanwhile, in the global commodities markets, Brent crude oil futures edged lower amid concerns over global oil supply glut. Brent for September settlement was currently off 55 cents at $52.76 a barrel. The contract had fallen 7 cents or 0.13% to settle at $53.31 a barrel during the previous trading session.
India imports about 80% of its crude requirements and a decline in crude eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 64.10, compared with its close of 64.04 during the previous trading session.
Meanwhile, India's weather office, the India Meteorological Department (IMD), said in a weekly report issued yesterday, 30 July 2015, that the rainfall was above normal by 21% over the country as a whole during the period from 23 to 29 July 2015. A deep depression caused extremely heavy rainfall over Gujarat and south Rajasthan during the second half of the week. Region wise, the rainfall was 68% above the Long Period Average (LPA) in Central India, 33% above LPA in Northwest India, 50% below LPA in South Peninsula and 22% below LPA in East & Northeast India during the period from 23 to 29 July 2015.
As per IMD's extended range forecast till 19 August 2015, rainfall activity is likely to be normal to above normal over Central and Northwest India till 9 August 2015. Rainfall activity is likely to be normal to above normal over northeast and adjoining east India from 5 to 14 August 2015.
For the country as a whole, cumulative rainfall during the period from 1 to 29 July 2015 was 15% below LPA. Region wise, the rainfall was 46% below the LPA in South Peninsula, 16% below the LPA in East & Northeast India, 13% below the LPA in Central India and 5% above the LPA in Northwest India during the period 1 to 29 July 2015. July accounts for about 33% of precipitation during the June-September monsoon season and is critical for crops.
The IMD in its separate daily monsoon update issued yesterday, 30 July 2015, said that the southwest monsoon was vigorous over West Rajasthan and was active over Gangetic West Bengal and East Rajasthan during past 24 hours until 8:30 IST. For the country as a whole, cumulative rainfall during this year's monsoon season was 4% below the Long Period Average (LPA) until 30 July 2015. Region wise, the rainfall was 19% below the LPA in South Peninsula, 9% below the LPA in East & Northeast India, 2% below the LPA in Central India and 12% above the LPA in Northwest India until 30 July 2015.
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 markets, European stocks reversed gains today, 31 July 2015. Key benchmark indices in Germany and UK were down 0.03% to 0.06%. France's CAC 40 was up 0.27%.
German retail sales in June dropped 2.3% from May, adjusted for inflation and seasonal swings, but rose 5.1% from the year earlier-period, Destatis said in a statement today, 31 July 2015.
Asian stocks edged higher after data overnight showed the US economy picked up its pace in the second quarter. Key benchmark indices in Taiwan, South Korea, Hong Kong, Indonesia and Japan were up 0.16% to 1.54%. In China, the Shanghai Composite was off 1.13%. Singapore's Straits Times was down 1.44%.
China recorded a service trade deficit of $14.9 billion in June, down from $18.3 billion in May, official data showed today, 31 July 2015. For the first six months of the year, the country saw a service trade deficit of $91.6 billion, the State Administration of Foreign Exchange said in a statement on its website. China had a merchandise trade surplus of $47.6 billion in June and a surplus of $255.4 billion in the January-June period, according to the foreign-exchange regulator's data.
Consumer prices in Japan gained 0.4% on year in June, the Ministry of Internal Affairs and Communications said today, 31 July 2015. The price rise was lower from 0.5% in May. Meanwhile, the unemployment rate in Japan came in at a seasonally adjusted 3.4% in June.
US stocks ended little changed after witnessing high intraday volatility yesterday, 30 July 2015, after the latest data showed the US economy picked up its pace in the second quarter, leaving the Federal Reserve on track to raise interest rates as soon as September. Solid consumer spending offset a drag from weak business investment in the June quarter, resulting in the United States' gross domestic product (GDP) rising by an annualised rate of 2.3%. A separate report by the US Labor Department revealed fewer Americans than expected filed claims for jobless benefits last week. Applications for unemployment payments rose by 12,000 to 267,000 in the week up to 25 July 2015. The prior week's figure of 255,000 jobless claims marked a 40-year low.
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