Key benchmark indices slumped on the first trading session of the month as European and Asian stocks dropped and as trading in US index futures indicated weak start for US stocks later in the global day. The barometer index, the S&P BSE Sensex, hit two-week low. The 50-unit CNX Nifty hit its lowest level in more than two weeks. The Sensex was provisionally down 417.92 points or 1.61% at 25,477.05. The market sentiment was also hit adversely after provisional data showed that foreign investors made heavy selling during the previous trading session. The market breadth indicating the overall health of the market was weak.
Metal stocks declined after ArcelorMittal, the world's largest steelmaker, at the time of announcing its Q2 results today, 1 August 2014, cut its forecast for earnings this year after lower than anticipated iron ore prices affected the profit of its mining business. Hero MotoCorp gained after the company reported good sales in June. DLF rose in volatile trade after the company's Q1 results. Reliance Industries (RIL) dropped after the company said that there is no such proposal under consideration of 30% stake sale by the company in telecom unit Reliance Jio Infocomm.
Key indices extended losses in late trade after tumbling in mid-afternoon trade after witnessing intraday recovery in early afternoon trade. The Sensex and the Nifty remained in red right from the onset of the trading session due to weakness in Asian stocks and steep slide in US stocks on Thursday, 31 July 2014.
Key indices fell for the second day in a row today, 1 August 2014.
As per provisional figures, the S&P BSE Sensex was down 417.92 points or 1.61% to 25,477.05. The index slumped 435.84 points at the day's low of 25,459.13 in late trade, its lowest level since 18 July 2014. The index declined 32.29 points at the day's high of 25,862.68 in early afternoon trade.
The CNX Nifty was down 118.15 points or 1.53% to 7,603.15, as per provisional figures. The index hit a low of 7,593.90 intraday trade, its lowest level since 16 July 2014. The index hit a high 7,716.70 in intraday trade.
The market breadth indicating the overall health of the market was weak. On BSE, 1,759 shares fell and 1,119 shares rose. A total of 117 shares were unchanged.
The BSE Mid-Cap index was down 73.86 points or 0.8% at 9,114.33. The BSE Small-Cap index was down 98.45 points or 0.99% at 9.890.97. Both these indices outperformed the Sensex.
Reliance Industries (RIL) dropped 2.88% after the company said after market hours on Thursday, 31 July 2014, that there is no such proposal of 30% stake sale by the company in telecom unit Reliance Jio Infocomm and that there is no merit in the news floating in the market. Reliance issued this clarification with regard to the report captioned "Reliance Open to 30% stake sale in Jio". Reliance Jio Infocomm is a wholly owned subsidiary of Reliance Industries. The report had said RIL is open to offloading up to 30% stake in its telecom venture, Reliance Jio, to a global strategic partner in a move to unlock value.
DLF rose 2.14% to Rs 202.65 after announcing its Q1 results. The stock hit high of Rs 203.80 and low of Rs 190.20. The company's consolidated net profit fell 29.48% to Rs 127.77 crore on 24.52% fall in total income to Rs 1851.60 crore in Q1 June 2014 over Q1 June 2013. The result was announced after market hours on Thursday, 31 July 2014.
EBITDA (earnings before interest, taxes, depreciation and amortization) fell 18% to Rs 863 crore in Q1 June 2014 over Q1 June 2013.
DLF said that a slew of favourable measures for the realty sector in the Union Budget 2014-15 such as additional tax exemptions for consumers, categorization of affordable housing an infrastructure status and tax benefits to the REITs will go a long way in revival of the realty sector. The company said it expects the market conditions to be challenging and demanding in the short term. DLF believes that while the slowdown for the realty sector is bottoming out, it will take a couple of quarters for the ground situation to improve.
DLF said it remains committed to its medium term strategy of continuing with its execution run rate, thereby creating more stock which can result in better and faster realizations as the cycle turns. Additionally, the company will continue to invest to improve the quality of land through payment of government charges and infrastructural improvements. The company also remains focused to improve the quality and pricing of debt through instruments such as CMBSs, DLF said.
Metal stocks declined after ArcelorMittal, the world's largest steelmaker, at the time of announcing its Q2 results today, 1 August 2014, cut its forecast for earnings this year after lower than anticipated iron ore prices affected the profit of its mining business. Sesa Sterlite (down 2.62%), Hindalco Industries (down 3.71%), NMDC (down 0.29%), Jindal Steel & Power (down 2.91%), Tata Steel (down 0.76%), Steel Authority of India (Sail) (down 2.05%), National Aluminum Company (down 1.9%) and Hindustan Copper (down 1.35%) declined.
ArcelorMittal expects core profit to be above $7 billion, having previously given a figure of about $8 billion for the full year.
JSW Steel dropped 0.5% to Rs 1,173.95 after announcing Q1 results. The stock hit high of Rs 1,209 and low of Rs 1,149. The company reported consolidated net profit of Rs 656.49 crore in Q1 June 2014 compared with consolidated net loss of Rs 381.82 crore in Q1 June 2013. Total income rose 29.32% to Rs 13307.74 crore in Q1 June 2014 over Q1 June 2013. The company announced result during market hours.
Hero MotoCorp gained 0.11% after the company reported good sales in June. The company said during market hours its sales rose 9% to 5.29 lakh units in July 2014 over July 2013. The company also today, 1 August 2014, extended the tenure of its Chief Financial Officer (CFO) Mr. Ravi Sud by another two years till 31 July 2016.
The market sentiment was hit adversely after provisional data showed that foreign investors made heavy selling during the previous trading session. Foreign portfolio investors (FPIs) sold shares worth a net Rs 1654.86 crore on Thursday, 31 July 2014, as per provisional data from the stock exchanges.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.135, compared with its close of 60.54 on Thursday, 31 July 2014.
Markit Economics today, 1 August 2014, said that the HSBC India Purchasing Managers' Index (PMI) -- a composite gauge designed to give an accurate overview of operating conditions in the manufacturing sector -- reached a 17-month peak of 53 in July, up from 51.5 in June. Details within the survey showed that all monitored categories witnessed a rise in output and order flows. However, employment deteriorated fractionally, while inflationary pressures continued to emerge, particularly on the supply-side.
The index of the eight core industries rose 7.3% in June 2014 over June 2013, data released by the government after trading hours on Thursday, 31 July 2014, showed. The eight core industries have a combined weight of 37.9% in the Index of Industrial Production (IIP).
India's fiscal deficit target for the current fiscal year is "daunting", Finance Minister Arun Jaitley reportedly said today, 1 August 2014. The fiscal deficit for the first quarter of the fiscal year ending 31 March 2015 (FY 2015) was at Rs 297859 crore, which amounted to 56.1% of the budget estimates, data released by the government after market hours on Thursday, 31 July 2014, showed. The month of June 2014 saw a fiscal deficit of Rs 57022 crore, against a fiscal deficit of Rs 127383 crore in May 2014.
US Secretary of State John Kerry reportedly told Prime Minister Narendra Modi today, 1 August 2014, that India's refusal to sign a global trade deal had sent the wrong signal, and urged New Delhi to work to resolve the row as soon as possible.
The World Trade Organization reportedly failed on Thursday to reach a deal to standardise customs rules, which would have been the first global trade reform in two decades but was blocked by India's demands for concessions on agricultural stockpiling. The deadline passed without a breakthrough. WTO ministers had already agreed the global reform of customs procedures known as "trade facilitation" last December, but it needed to be put into the WTO rule book by 31 July 2014.
European stocks slumped today, 1 August 2014, as companies including ArcelorMittal (MT) posted worse-than-forecast earnings. Key benchmark indices in UK, France and Germany were off 1.38% to 2.23%.
UK manufacturing grew at the slowest pace in a year in July as a cooling in new orders and output ended the first half's stellar growth spurt, Markit Economics said today. An industry index slipped to 55.4 from a revised 57.2 in June, the London-based data provider said.
Developments in Latin America will be closely watched as Argentina missed a deadline yesterday to pay $539 million in interest after two full days of negotiations in New York failed to produce an accord with creditors.
S&P declaring Argentina in default melded with concern over Europe's debt position as Portugal's Banco Espirito Santo SA was told to raise capital. Banco Espirito Santo SA plunged by the most on record and the bonds slumped on Thursday, 31 July 2014, after the Portuguese lender was ordered to raise capital following a 3.6 billion euro ($4.8 billion) first-half net loss.
Asian stocks dropped today, 1 August 2014, extending the biggest global rout in six months that saw the Dow Jones Industrial Average wipe out this year's gains in one session yesterday amid weaker earnings and credit-market concerns. Key benchmark indices in Hong Kong, China, Singapore, Japan, South Korea and Taiwan were off 0.15% to 0.91%.
China's manufacturing purchasing managers' index increased to 51.7 in July from 51 the previous month, according to data released today by the National Bureau of Statistics and China Federation of Logistics. A private gauge of factory activity from HSBC Holdings Plc and Markit Economics rose to 51.7 last month from 50.7 in June. Levels of 50 or higher signal expansion.
Trading in US index futures indicated that the Dow could all 99 points at the opening bell on Friday, 1 August 2014. US stocks joined a global selloff on Thursday, 31 July 2104, erasing the year's gains for the Dow Jones Industrial Average, as Exxon Mobil Corp. to Micron Technology Inc. tumbled amid weaker corporate results.
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