Stocks cut losses after hitting fresh intraday low in early afternoon trade. At 12:21 IST, the barometer index, the S&P BSE Sensex, was down 161.26 points or 0.46% at 34,941.88. The Nifty 50 index was down 48.55 points or 0.45% at 10,631.10. Most IT stocks fell. Auto stocks dropped. Decline in most Asian stocks hurt sentiment on the domestic bourses.
The Sensex was trading below the psychological 35,000 mark after falling below that level in morning trade. The market sentiment was hit by data showing that foreign funds and domestic institutional investors were net sellers of Indian stocks yesterday, 3 May 2018. The trading activity showed that the foreign portfolio investors (FPIs) sold shares worth a net Rs 148.42 crore yesterday, 3 May 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 578.92 crore yesterday, 3 May 2018, as per provisional data.
Domestic stocks nudged lower in early trade as most Asian stocks fell. Key benchmark indices continued to drift lower in morning and mid-morning trade.
The S&P BSE Mid-Cap index was off 0.23%. The S&P BSE Small-Cap index was off 0.03%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was negative. On the BSE, 1,357 shares fell and 994 shares rose. A total of 120 shares were unchanged.
Most IT stocks declined. Index heavyweight and IT major Infosys dropped 2.03% to Rs 1,157.80.
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Wipro (down 0.48%), Oracle Financial Services Software (down 1.21%), MindTree (down 2.77%), Hexaware Technologies (down 10.89%) and Mphasis (down 0.11%) declined.
HCL Technologies (up 1.03%), TCS (up 0.15%) and Tech Mahindra (up 1.64%) rose.
Auto stocks declined. Eicher Motors (down 1.96%), Maruti Suzuki India (down 0.55%), Mahindra & Mahindra (M&M) (down 0.28%), Bajaj Auto (down 1.95%), Hero MotoCorp (down 0.13%) and TVS Motor Company (down 2.54%) fell. Escorts (up 0.29%) and Ashok Leyland (up 0.18%) gained.
Tata Motors (TML) shed 0.28%. TML announced after trading hours yesterday, 3 May 2018, that its board approved the sale of its defense business to group entity Tata Advanced Systems (TASL). This will not include the pure civilian vehicles which will continue to be with TML. TML will receive an upfront consideration of Rs 100 crore, adjusted for capex incurred and changes in working capital in the intervening period until closure date, and a deferred consideration of 3% of the revenue generated from identified specialized defence projects for upto 15 years from FY 2020 subject to a maximum of Rs 1750 crore.
Further, the board also approved the sale of its shareholding in its wholly-owned subsidiary, TAL Manufacturing Solutions (TAL) to TASL at an enterprise value of Rs 625 crore. As a condition precedent, Tata Motors will acquire the non-aerospace business from TAL at a value of Rs 10 lakh. This is in line with Tata Motor's plan to drive Turnaround 2.0, take necessary steps to further its defense business by leveraging the scale and strengths of the unified aerospace and defense entity at the group level, while monetizing its non-core assets to reduce net-debt.
Castrol India fell 4.36% after net profit rose 1.6% to Rs 181.80 crore on 5.1% increase in net sales to Rs 927.10 crore in Q1 March 2018 over Q1 March 2017. The result was announced after market hours yesterday, 3 May 2018.
In its outlook, Castrol India said that with the continued increase in crude oil price and depreciation of the Indian rupee there is likelihood of further volatility in the cost of goods.
The company added that it continues to remain optimistic about the Indian lubricant market and is confident about continuing to deliver robust business performance aligned to its long term strategy. This is underpinned by continued investments in technology and brands, aggressive expansion of distribution network, innovative marketing programmes and delivery of premium customer experience across multiple touch points.
On the macro front, India's service sector continued to improve in April, with business activity rising at a faster pace, supported by new order growth, data released today, 4 May 2018 showed. Inflationary price pressures continued to ease further, with input and output charge inflation registering below their respective historical averages. The seasonally adjusted Nikkei India Services Business Activity Index rose to 51.4 in April from 50.3 in March.
Overseas, most Asian stocks were trading lower as investors assessed the implications of ongoing trade talks between the US and China. Investors are now awaiting US jobs for April and wage growth data due later in the day. The Nikkei in Japan remained closed for a holiday.
Activity in China's service sector expanded at a faster pace in April, a private gauge showed Friday, a reading in line with official data last month. The Caixin China services purchasing managers' index rose to 52.9 in April from 52.3 in March, Caixin Media Co. and research firm Markit said. A reading above 50 indicates an expansion in activity from the previous month while a level below that points to a contraction.
US stock benchmarks ended off their lows yesterday, 3 May 2018 and the Dow ended higher in choppy trade. The Dow Jones Industrial Average rose 5.17 points, or less than 0.1%, to 23,930.15. The S&P 500 index declined 5.94 points, or 0.2%, to 2,629.75. The Nasdaq Composite Index closed 12.75 points, or 0.2%, lower at 7,088.15.
On the economic data front, the Markit services purchasing managers index for April came in at 54.6, compared with 54 in March. The Institute for Supply Management's nonmanufacturing index fell more than expected in April, dropping to 56.8, while factory orders rose 1.6% in the month.
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