Key benchmark indices extended gains and hit fresh intraday high in morning trade. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their highest level in over one week. The Sensex was currently up 91.91 points or 0.33% at 28,206.47. The market breadth indicating the overall health of the market was strong with over two gainers for every loser. The BSE Mid-Cap index was up 1.04%, outperforming the Sensex.
PSU bank stocks led gains among bank stocks after the finance ministry after trading hours on Friday, 31 July 2015, unveiled a long-term four-year plan for capitalization of PSU banks. Small car maker Maruti Suzuki India scaled record high after declaring good vehicle sales in July 2015.
A bout of volatility was witnessed in early trade as the key benchmark indices drifted higher in early trade after reversing initial decline triggered by weak Asian stocks.
In overseas markets, Asian stocks edged lower today, 3 August 2015 amid signs of a deepening slowdown in China's economy, the world's second-largest economy. US stocks ended lower on Friday, 31 July 2015 as oil titans Exxon Mobil and Chevron led a slump in energy stocks.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 277.77 crore on Friday, 31 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1021.34 crore on Friday, 31 July 2015, as per provisional data.
At 10:20 IST, the S&P BSE Sensex was up 91.91 points or 0.33% at 28,206.47. The index gained 107.31 points at the day's high of 28,221.87 in morning trade, its highest level since 24 July 2015. The index fell 43.19 points at the day's low of 28,071.37 in early trade.
The CNX Nifty was up 23.15 points or 0.27% at 8,556. The index hit a high of 8,562.30 in intraday trade, its highest level since 24 July 2015. The index hit a low of 8,508.10 in intraday trade.
The market breadth indicating the overall health of the market was strong with over two gainers for every loser. On BSE, 1,500 shares gained and 641 shares fell. A total of 62 shares were unchanged.
The BSE Mid-Cap index was up 117.03 points or 1.04% at 11,390.05. The BSE Small-Cap index was up 98.29 points or 0.83% at 11,929.09. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 997 crore by 10:15 IST compared with Rs 268 crore by 09:25 IST.
PSU bank stocks led gains among bank stocks after the finance ministry after trading hours on Friday, 31 July 2015, unveiled a long-term four-year plan for capitalization of PSU banks.
Among PSU bank stocks, State Bank of India (SBI) (up 3.92%), Punjab National Bank (up 3.58%), Bank of Baroda (up 6.48%), Canara Bank (up 3.66%), Bank of India (up 3.31%) and Union Bank of India (up 3.45%) gained.
The finance ministry after trading hours on Friday, 31 July 2015, unveiled a long-term four-year plan for capitalization of PSU banks. The government proposes to make available a total Rs 70000 crore out of budgetary allocations for four years for capitalization of PSU banks. The government will pump in Rs 25000 crore for capitalization of PSU banks during the current financial year 2015-16. It will make available Rs 25000 crore in 2016-17 and Rs 10000 crore each in 2017-18 and 2018-19 for capitalization of PSU banks.
According to the finance ministry's estimates, PSU banks will require about Rs 1.8 lakh crore of extra capital over a period of four years until 2018-19. Of this requirement, PSU banks will be able to raise Rs 1.1 lakh crore from financial markets on the back of an expected improvement in their valuation. As of now, the PSU banks are adequately capitalized and are meeting all the Basel III and RBI norms. However, the government wants to adequately capitalize all PSU banks to keep a safe buffer over and above the minimum norms of Basel III.
The Rs 25000-crore earmarked for PSU bank recapitalization this year will be allocated through three tranches. In the first tranche, the government will make available about Rs 10000 crore to those banks which require support and every single bank will be brought to the level of at least 7.5% by Financial Year 2016. In the second tranche, about Rs 10000 crore will be allocated to top six big PSU banks viz. State Bank of India, Bank of Baroda, Bank of India, Punjab National Bank, Canara Bank and IDBI Bank in order to strengthen them to play a vital role in the economy. In the third and final tranche, the remaining Rs 5000 crore will be allocated to the banks based on their performance during the three quarters in the current year judged on the basis of certain performance parameters. This will incentivize them to improve their performance in the current year, according to a statement from the finance ministry.
Among private bank stocks, Kotak Mahindra Bank (up 1.19%), ICICI Bank (up 1.9%), Axis Bank (up 0.96%), IndusInd Bank (up 0.85%) and Yes Bank (up 0.77%) rose. HDFC Bank shed 0.07%.
Maruti Suzuki India rose 2.1% to Rs 4,421.50. The stock hit an intraday high of Rs 4,430, which was also a record high for the stock. Maruti Suzuki India's total vehicle sales rose 20.1% to 1.21 lakh units in July 2015 over July 2014. The announcement of July 2015 sales figures was made on Saturday, 1 August 2015.
Maruti Suzuki India's total domestic sales rose 22.5% to 1.10 lakh units in July 2015 over July 2014. Exports rose 0.2% to 11,307 units in July 2015 over July 2014.
Meanwhile, in the global commodities markets, Brent crude oil futures edged lower today, 3 August 2015 on worries of oversupply as the Organization of the Petroleum Exporting Countries (OPEC) pumped at record levels in July, while weak Chinese data stoked concerns about slower growth at the world's second largest oil consumer. Brent for September settlement was currently off 27 cents at $51.94 a barrel. The contract had fallen $1.1 a barrel or 2.06% to settle at $52.21 a barrel during the previous trading session on Friday, 31 July 2015.
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.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was currently hovering at 63.9650, compared with its close of 64.1350 during the previous trading session on Friday, 31 July 2015.
Among key domestic economic data, the Nikkei India Manufacturing PMI data for the month of July 2015 is due today, 3 August 2015. Growth in India's manufacturing sector output eased in June 2015 as new orders rose at weaker rate. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) dropped to 51.3 in June 2015 from 52.6 in May 2015.
All eyes are on the Reserve Bank of India's (RBI)'s third bi-monthly monetary policy review scheduled at 11:00 IST tomorrow, 4 August 2015. The RBI had cut its benchmark lending rate viz. the repo rate by 25 basis points to 7.25% after a monetary policy review on 2 June 2015.
Meanwhile, India's weather office, the India Meteorological Department (IMD), said in a daily report issued yesterday, 2 August 2015, said that the Southwest Monsoon has been vigorous over Jharkhand and active over Gangetic West Bengal during past 24 hours until 8:30 IST. For the country as a whole, cumulative rainfall during this year's monsoon season was 6% below the Long Period Average (LPA) until 2 August 2015. Region wise, the rainfall was 21% below the LPA in South Peninsula, 7% below the LPA in East & Northeast India, 6% below the LPA in Central India and 9% above the LPA in Northwest India until 2 August 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.
Asian stocks edged lower today, 3 August 2015 amid signs of a deepening slowdown in China's economy, the world's second-largest economy. Key benchmark indices in Singapore, Taiwan, Japan, Indonesia and South Korea fell by 0.23% to 1.73%.
Weak manufacturing data dragged Chinese stocks. In mainland China, the Shanghai Composite dropped 2.43%. In Hong Kong, the Hang Seng index fell 1.07%.
A gauge of China's factory activity slipped in July, pointing to further sluggishness in the key manufacturing sector of the world's second-largest economy. China's official manufacturing purchasing managers index slipped to 50 in July from 50.2 in June, the National Bureau of Statistics said Saturday, 1 August 2015. A reading of 50 is right at the cutoff point between expansion and contraction compared with the previous month.
US stocks ended lower on Friday, 31 July 2015 as oil titans Exxon Mobil and Chevron led a slump in energy stocks.
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