Post Session: Quick Review

Repeating last session’s trend, Indian markets after remaining some time in green, lost their momentum completely and started moving southwards since the late morning trade and ended near the day's low, though there was Chinese jitters that spooked the whole global markets but on domestic front there were some earnings disappointments that too played the spoil sport, dragging the markets lower. SBI's Q1 net interest income improved by 3.6 per cent to Rs 13,732 from Rs 13,252 crore during the same period last financial year and the company posted better than expected 10% rise in net profit to Rs 3692 crore in the first quarter ending June 2015. However, the shares fell over 5 per cent as net non-performing assets as percentage of total advances surged to 2.24 per cent from 2.12 per cent during the previous quarter. Apollo tyres shares apart from its weak numbers were weighed down by the yuan devaluation, as dumping of cheap Chinese tyres look poised to increase.

On the global front, though the US markets rallied overnight but the whole Asian pack ended in red, the Chinese markets that were looking in a bit confident mood in the early trade, too lost their pace and ended modestly in red after the People’s Bank of China (PBoC), the country’s central bank cut the yuan’s reference rate by a massive 1.9%-the most on record. The European markets too made a weak start, dragged down by exporters like carmakers, miners and luxury-goods after China’s central bank devalued yuan, ending a de-facto peg to the dollar that had been in place since March. Traders even overlooked, the report that Greece and its creditors agreed on terms for its third bailout, paving the way for national parliaments to vote on the deal.

Back home, the selling intensified in the second half and major averages kept losing ground lacking any supporting cues. Traders were also concerned about a latest report of Moody's which stated that India’s sovereign credit profile is more exposed to the negative effects of a drought than most other Baa rated sovereigns because of relatively high share of agriculture in overall employment, weak rural infrastructure and irrigation, inefficient food distribution, large proportion of Indian household spending that goes towards food, and share of food subsidy costs in the government's fiscal deficits. Though, it also pointed that rainfall has performed a little better than initial assumption. Meanwhile, traders mainly remained concerned about the disruption in the parliament with both the houses getting adjourned again, even though the government listed the GST bill, that seeks to replace all indirect taxes with a uniform levy, for consideration and passing in Rajya Sabha. IT stocks led by Infosys, TCS and Tech Mahindra outperformed the broader markets as the rupee fell sharply against the dollar. All the major Indian outsourcers get a major portion of the revenues from the US, so a weakening of the rupee boosts their profits. On the same time the metal stocks lost their sheen after China devalued the yuan. Broader markets too made a weak closing.

Amid the gloom of capital market, there was a bright star, the debutant Syngene International, the research arm of biotechnology major Biocon, which started off trade at Rs 295 on Tuesday, up 18 percent compared to issue price of Rs 250 apiece and ended higher by over 24% at Rs 311.

The BSE Sensex ended at 27885.12, down by 216.60 points or 0.77% after trading in a range of 27825.83 and 28205.12. There were 8 stocks on gainers side against 22 stocks on decliners’ side on the index. (Provisional)

The broader indices too made a red closing; the BSE Mid cap index was down by 0.38%, while Small cap index plunged by 1.04%.(Provisional)

The two gaining sectoral indices on the BSE were IT up by 1.57%, TECK up by 1.11%, while Metal down by 3.58%, PSU down by 2.11%, Realty down by 1.76%, Bankex down by 1.44%, Auto down by 1.36% were the losing indices on BSE.(Provisional)

The top gainers on the Sensex were Infosys up by 2.59%, Wipro up by 1.13%, TCS up by 1.03%, Cipla up by 0.68% and GAIL India up by 0.42%. On the flip side, Tata Steel down by 5.38%, SBI down by 5.16%, Hindalco down by 4.45%, Tata Motors down by 4.25% and Coal India down by 3.95% were the top losers.(Provisional)

Meanwhile, the Organisation for Economic Cooperation and Development (OECD), the Paris-based think tank of developed economies, in its latest monthly leading indicator, a measure designed to flag turning points in the international economy has said that it expects India’s growth to be stable, even as it forecast a slowing of the Chinese economy.

In its latest prediction OECD said that stable growth momentum is expected in Germany, Japan and India. The CLI (composite leading indicators) for Russia also points to stable growth momentum albeit below long term trend. However, it said that in Brazil and China, CLIs point more strongly than last month to a loss in growth moment. China's indicator continued its steady decline to 97.41 in June from 97.51 in May, while Brazil slipped to 98.84 from 98.96. On the other hand India’s improved to 99.65 from 99.57, showing a month-on-month growth of 0.09% and year-on-year growth of 0.88%.

Regarding other countries, OECD stated that indicators remained at 100.7 in the euro zone for the fourth consecutive month in June but continued to ease to 99.4 in the US from May's 99.5, having fallen below 100 in February. Britain's reading slipped to 99.8 in June, having dipped below 100 to 99.9 in May. The index rose month-on-month to 100.8 from 100.7 in France and was stable at 100.9 in Italy.

The report pointed that economic growth is showing further signs of firming in France, Italy and the euro zone overall, while growth looks to be easing to around long-term trends in the United States and UK.

The CNX Nifty ended at 8467.40, down by 58.20 points or 0.68% after trading in a range of 8441.30 and 8556.25. There were 13 stocks in green against 37 stocks in red on the index.(Provisional)

The top gainers on Nifty were Infosys up by 2.67%, Bosch up by 2.03%, Tech Mahindra up by 2.02%, Zee Entertainment up by 1.56% and TCS up by 1.12%. On the flip side, Tata Steel down by 5.30%, SBI down by 5.20%, Tata Motors down by 4.46%, Hindalco down by 4.41% and Coal India down by 3.74% were the top losers.(Provisional)

The European markets were trading in red, Germany’s DAX lost196.4 points or 1.69% to 11,408.38, France’s CAC declined by 66.77 points or 1.29% to 5,128.64 and UK’s FTSE 100 was lower by 57.56 points or 0.85% to 6,678.66.

The Asian markets closed in red on Tuesday as investors mulled the impact of a sharp devaluation of the yuan announced by China’s central bank. China has devalued its currency to boost flagging exports in a move that risks deepening the global currency war. After recent data showing falling exports and a stalling manufacturing sector, the central bank stated that it was allowing the yuan to weaken by nearly 2% in the hope of making China’s exports cheaper and pushing down borrowing costs. Chinese banks extended a surprisingly robust 1.48 trillion yuan ($238.4 billion) in new loans in July but the numbers may have been distorted by Beijing’s massive rescue package for the slumping stock market and other policy measures. New bank lending has been weak for much of this year despite interest rates cuts and looser lending restrictions. New yuan loans in July trumped the previous month’s lending of 1.28 trillion yuan while broad money supply expanded an annual 13.3%, faster than June’s 11.7%.  Chinese banks bad loan ratio has increased by 1.5% at the end of June, 0.11% higher than March with the value of outstanding non- performance loans went up by $17.6 billion. Japan’s Economy Watchers Current Index rose to a seasonally adjusted 51.6, from 51.0 in the preceding month. Japanese Household Confidence rose to a seasonally adjusted annual rate of 40.3.