Key benchmark indices traded near the flat line in early afternoon trade. At 12:15 IST, the barometer index, the S&P BSE Sensex, was off 5.58 points or 0.02% at 27,802.56. The Nifty 50 index was currently down 7.70 points or 0.09% at 8,513.35. The Sensex fell 56 points or 0.2% at the day's low of 27,752.14 in early afternoon trade. The barometer index gained 120.62 points or 0.43% at the day's high of 27,928.76 at the onset of trading session, its highest level since 20 August 2015. The Nifty fell 27.50 points or 0.32% at the day's low of 8,493.55 in early afternoon trade. The index gained 29.20 points or 0.34% at the day's high of 8,550.25 at onset of trading day, its highest level since 11 August 2015.
The market breadth indicating the overall health of the market was weak. On BSE, 1,614 shares fell and 887 shares rose. A total of 125 shares were unchanged. The BSE Mid-Cap index was currently off 0.41%. The BSE Small-Cap index was currently off 0.63%. The fall in both these indices was higher than the Sensex's decline in percentage terms.
In overseas stock markets, most Asian stocks rose, adding to the gains in the past few sessions amid improved risk appetite following the positive lead overnight from Wall Street. Japanese shares extended strong gains registered early this week after Japan's Chief Cabinet Secretary Yoshihide Suga said that the the government is planning to introduce a comprehensive and bold economic stimulus. The Nikkei 225 Average ended 0.84% higher. The Nikkei surged early this week after Prime Minister Shinzo Abe's ruling-coalition victory in the upper-house election stoked speculation of more fiscal stimulus. Meanwhile, Suga today, 13 July 2016, denied a local media report that said aides to Prime Minister Abe are considering the so-called helicopter money that involves a central bank directly buying government bonds to finance government spending or tax cuts as a possible policy measure.
US stocks edged higher yesterday, 12 July 2016, with Dow Jones Industrial Average and the S&P 500 index, both, finishing at record high, reflecting hopes about stimulus from Japan and China along with optimism that the Bank of England will lower rates to help the UK economy sidestep the pitfalls of the so-called Brexit.
Auto stocks declined. Bajaj Auto (down 0.44%), Hero MotoCorp (down 0.34%), Mahindra & Mahindra (M&M) (down 0.25%) and Eicher Motors (down 0.88%) fell. TVS Motor Company rose 1.34%.
Ashok Leyland fell 1.66% to Rs 92 as the stock turned ex-dividend today, 13 July 2016 for dividend of Rs 0.95 per share for the year ended 31 March 2016 (FY 2016). Before turning ex-dividend, the stock offered a dividend yield of 1.01% based on its closing price of Rs 93.55 on the BSE yesterday, 12 July 2016.
Car major Maruti Suzuki India lost 1.48% as Japanese yen strengthened against the dollar. A strong yen adversely impacts Maruti Suzuki India's (Maruti) operating profit margin. Maruti pays royalty to its Japanese parent Suzuki Motor Corporation in yen terms for some of its earlier models. Maruti has reportedly started paying royalty to its Japanese parent in rupee terms on all new models from 1 April 2016. Maruti also has an exposure to the yen to the extent it imports raw materials from Japan.
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Tata Motors fell 1.14%. Tata Motors after market hours yesterday, 12 July 2016, announced that the company intends to raise Rs 400 crore from the issue of the third series of its non-convertible debentures (NCDs). In this regard a meeting of a duly constituted committee of the board of directors of the company will he held on 15 July 2016.
Capital goods stocks fell. ABB India (down 0.79%), BEML (down 0.81%), Punj Lloyd (down 2.24%), Bharat Electronics (down 0.65%), Crompton Greaves (down 1.44%), L&T (down 1.15%) fell. Siemens (up 0.08%) and Thermax (up 0.04%) rose.
Bharat Heavy Electricals rose 3.98% on reports Bangladesh-India Friendship Power Company inked the deal with the company for constructing the super thermal plant at Bangladesh's southwestern Rampal near the Sundarbans. According to reports, Bangladesh and India yesterday, 12 July 2016, signed a landmark deal for the construction of a 1,320 megawatt coal fired power plant, the biggest project under bilateral cooperation that would mark the transition from electricity export to generation level. Bangladesh-India Friendship Power Company (BIFPCL), the joint venture enterprise inked the deal with Bharat Heavy Electricals (Bhel), which was selected under an open international tender for constructing the super thermal plant at Bangladesh's southwestern Rampal near the Sundarbans, reports suggested. India's Exim Bank will provide $1.49 billion for the project, scheduled to start generating power in 2019, as per reports.
On the macro front, data released by government after market hours yesterday, 12 July 2016, showed that India's industrial production increased 1.2% in May 2016 over May 2015, while snapping 1.35% dip recorded in the previous month. The manufacturing sector production rebounded 0.7%, after two months of decline, contributing to the rise in industrial output in May 2016.
Another data released by government after market hours yesterday, 12 July 2016, showed that inflation based on the consumer price index (CPI) accelerated to 5.77% in June 2016 from 5.76% in May 2016. Increase in food prices was responsible for the acceleration in consumer price inflation. The consumer food price index rose to 7.79% in June 2016 from 7.47% in May 2016. The core CPI inflation fell to 4.39% in June 2016 from 4.49% in May 2016.
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