Post Session: Quick Review

Indian markets finally managed to extend the gaining streak with a positive close on Monday, though the momentum was lost in the latter part of the trade on some profit taking and policy related concerns, with no work in parliament. Earlier, the markets after a slow start on disappointing core sector data picked up pace with good growth in manufacturing activity. India's manufacturing sector gathered pace and touched a six-month high in July amid stronger rise in new business orders, especially from overseas. The Nikkei India Manufacturing PMI rose to 52.7 in July from 51.3 in June. Though, markets pared their gains in last, one sector that kept the spirit high was PSU banking, which extended the gains after the government unveiled a Rs 70,000-crore fund-infusion plan spread over 4 years. The fund-infusion plan will begin with a Rs 25,000-crore injection in the current fiscal year, followed by another Rs 25,000 crore in FY17 and Rs 10,000 crore each over the subsequent two years.

On the global front, it was a weak day for the Asian markets with most of indices in the region posting heavy losses after an official Chinese factory gauge declined to a five-month low, while the final reading on a private measure declined more than estimated. The European markets too pared some of their early gains, after Greek markets opened after a five-week suspension. Though, the major indices were keeping themselves in green after posting their biggest monthly gain in five on some improved earnings.

Back home, the Indian markets showed mostly a resilient trade in first half, bucking global trends, however the mood turned choppy in the second half and major bourses suffered profit taking and ended just with a positive bias, paring most of their gains. Traders were concerned about the logjam in the parliament with protests by Opposition members led by the Congress continuing in the Lok Sabha, forcing the adjournment of the House. Rajya Sabha too was adjourned for the day. With nearly half of the Parliament Monsoon Session nearly washed out there is hardly any chance that any important bill will be passed. Also, there was some cautiousness ahead of the RBI’s monetary policy review slated tomorrow. Meanwhile, rating agency Moody's has said that the RBI governor Raghuram Rajan is likely to cut interest rates by 25 basis points in its monetary policy meeting on Tuesday due to failing demand and favourable supply conditions. Back on street, while the broader markets outperformed the benchmarks, consumer durables, banking and power were the major gaining sectoral indices, while metal, oil & gas and IT remained in somber mood since morning.

Earnings kept influencing the market, and Suzlon Energy surged over 11% after posting a consolidated net profit of Rs 1,047.41 crore for the June quarter. Also the company reported that its consolidated net Debt (excluding Foreign currency convertible bonds) was down to Rs 7,010 crore from Rs 14,821 crore as of 31st March 2015. On the other hand, shares of engineering & construction firm Larsen & Toubro (L&T) emerged as the biggest loser in the Sensex, after the company reported a 37.3 percent fall in consolidated net profit at Rs 606.20 crore in the quarter ended 30 June 2015, compared with Rs 966.90 crore reported in the same quarter a year ago.

The BSE Sensex ended at 28163.41, up by 48.85 points or 0.17% after trading in a range of 28071.37 and 28263.35. There were 16 stocks advancing against 14 stocks declining on the index.(Provisional)

The broader indices outperformed the benchmark; the BSE Mid cap index was up by 0.47%, while Small cap index surged by 0.85%.(Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.10%, Bankex up by 0.81%, Power up by 0.76%, Auto up by 0.73%, PSU up by 0.48%, while Metal down by 1.05%, Oil & Gas down by 0.62%, IT down by 0.62%, TECK down by 0.39% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 3.83%, ICICI Bank up by 3.21%, Maruti Suzuki up by 2.42%, Dr. Reddys Lab up by 2.20% and BHEL up by 1.49%. On the flip side, Vedanta down by 2.69%, Lupin down by 2.28%, Mahindra & Mahindra down by 2.12%, Coal India down by 1.75% and HDFC Bank down by 1.59% were the top losers.(Provisional)

Meanwhile, showing signs of inconsistent industrial growth, the Index of Eight Core Industries-coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity, which comprises nearly 38% of the weight of items included in the Index of Industrial Production (IIP), slowed to 3 per cent in June after surging to a six-month high of 4.4 per cent in May. The combined Index of Eight Core Industries stood at 171.2 in June, 2015, three percent higher compared to the index of June, 2014. Its cumulative growth during April to June, 2015-16 was 2.4 per cent.

The decline in the core sector growth for the month of June was mainly on account of contraction in crude oil and natural gas production, while six other sectors reported improvement compared to same period last year. However, month-on-month data showed that barring fertilisers steel and flat production of Cement, all the others grew at a slower pace or showed contraction in June.

Crude Oil production having weight of 5.22% declined by 0.7% in June, 2015 over June, 2014. Its cumulative index during April to June, 2015-16 declined by 0.9% over the corresponding period of previous year. The Natural Gas production having weight of 1.71 % declined by 5.9 % in June, 2015, and its cumulative index during April to June, 2015-16 declined by 4.2 % over the corresponding period of previous year.

On the other hand, Coal production  having weight of 4.38% increased by 6.3% in June, 2015 over June, 2014, while its cumulative index during April to June, 2015-16 increased by 7.3% over corresponding period of previous year. Petroleum Refinery production having weight of  5.94% increased by 7.5% in June, 2015, with its cumulative index during April to June, 2015-16 increasing by 4.2% over the corresponding period of previous year. Fertilizer production having weight of 1.25%, increased by 5.8% in June, 2015, while its cumulative index during April to June, 2015-16 increased by 2.4% over the corresponding period of previous year. Steel production with weight of 6.68%, increased by 4.9% in June, 2015 and its cumulative index during April to June, 2015-16 increased by 2.8% over the corresponding period of previous year. Cement production having weight of 2.41% increased by 2.6% in June, 2015, while its cumulative index during April to June, 2015-16 increased by 0.9 % over the corresponding period of previous year. Electricity generation having weight of 10.32% increased by 0.2% in June, 2015, while it’s cumulative index during April to June, 2015-16 increased by 1.5% over the corresponding period of previous year.

The weak performance of June core sector was also influenced by a positive base effect in June 2014 and may continue for the next two months as well, however it may strengthen the case of another rate cut by the Reserve Bank of India.

The CNX Nifty ended at 8538.70, up by 5.85 points or 0.07% after trading in a range of 8508.10 and 8563.95. There were 24 stocks advancing against 24 stocks declining ones, while 2 stocks remained unchanged on the index. (Provisional)

The top gainers on Nifty were SBI up by 4.15%, Bank Of Baroda up by 4.11%, ICICI Bank up by 3.34%, PNB up by 2.65% and Bosch up by 2.55%. On the flip side, HCL Tech. down by 5.63%, Vedanta down by 2.53%, BPCL down by 1.92%, Lupin down by 1.87% and Mahindra & Mahindra down by 1.55% were the top losers.(Provisional)

France’s CAC was up by15.68 points or 0.31% to 5,098.29, Germany’s DAX was higher 45.78 points or 0.4% to 11,354.77, UK’s FTSE 100 was down by 6.32 points or 0.09% to 6,689.96.

Asian markets closed mostly in red on Monday following disappointing Chinese manufacturing data and a continued slide in commodity prices. Headwinds for the world’s second-biggest economy intensified at the start of the third quarter, with manufacturing conditions in China deteriorating to their worst in two years in July and triggering fresh slides in global commodity prices. Chinese Manufacturing PMI fell to 50.0, from 50.2 in the preceding month. Similar business activity surveys for Taiwan, South Korea and Indonesia - all heavily reliant on Chinese demand - reflected varying degrees of weakness that is clouding hopes for a convincing global recovery in the second half of the year. China’s central bank injected 292.9 billion yuan ($47.2 billion) into banks in July to boost lending, in yet another step to bolster growth in China’s cooling economy. South Korea posted a record current account surplus for the first half of this year as slumping oil prices helped offset the impact of shrinking exports. The current account is the broadest measure of foreign trade in goods and services. It showed an unprecedented surplus of $52.4 billion in the six months to June. Indonesian Inflation remained unchanged at a seasonally adjusted 7.26% compared to the preceding month. Thai CPI rose to a seasonally adjusted annual rate of -1.05%, from -1.07% in the preceding month.