A rangebound movement was witnessed as key benchmark indices languished in negative zone in mid-morning trade. At 11:15 IST, the barometer index, the S&P BSE Sensex, was down 45.24 points or 0.17% at 26,668.69. The Nifty 50 index was currently down 13.95 points or 0.17% at 8,166. The market breadth indicating the overall health of the market was negative. On BSE, 943 shares rose and 1,085 shares declined. A total of 117 shares were unchanged. The BSE Mid-Cap index was currently up 0.25%, outperforming the Sensex. The BSE Small-Cap index was currently down 0.07%. The decline in this index was lower than the Sensex's decline in percentage terms.
In overseas stock markets, Asian stocks edged higher after the latest data signalled the US economy is recovering. Japanese stocks edged lower as the yen strengthened against the dollar. The Nikkei 225 Average was currently off 1.91%. A stronger yen hurts the competitiveness of Japanese exporters. Japan's Prime Minister Shinzo Abe yesterday, 1 June 2016, said that a sales-tax increase will be postponed until 2019 from April 2017.
US stocks eked out minuscule gains yesterday, 1 June 2016, following an intraday recovery in oil prices and better-than-expected manufacturing data. The Institute for Supply Management said its manufacturing index rose to 51.3% last month from 50.8% in April. The data showed that manufacturers are expanding their businesses at a very slow pace.
Auto stocks edged higher. Ashok Leyland (up 0.48%), Mahindra & Mahindra (up 0.27%) and Eicher Motors (up 0.63%) edged higher.
Maruti Suzuki India (MSIL) dropped 0.64% as Japanese yen strengthened against the dollar. A strong yen adversely impacts Maruti's operating profit margin. Maruti pays royalty to its Japanese parent Suzuki Motor Corporation in yen terms for some of its earlier models. Maruti will reportedly start paying royalty to its Japanese parent in rupee terms on all new models from the current financial year, which began on 1 April 2016. Maruti also has an exposure to the yen to the extent it imports raw materials from Japan.
Tata Motors rose 1.17% at Rs 454.45 after the company announced monthly sales volume data for commercial and passenger vehicles. Tata Motors' total commercial and passenger vehicles sales rose 1% to 40,071 units in May 2016 over May 2015. Domestic sales of Tata commercial and passenger vehicles rose 2% to 35,643 units in May 2016 over May 2015. Exports declined 5% to 4,428 units in May 2016 over May 2015. The company announced the monthly sales volume data after market hours yesterday, 1 June 2016.
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Hero MotoCorp (HMCL) rose 1.13% at Rs 3,122.20 after the company announced monthly sales volume data. HMCL's total two-wheelers sales rose 2.32% to 5.83 lakh units in May 2016 over May 2015. Market demand was expectedly subdued in May 2016, due to the heavy retail offlake that happened in April on account of the marriage season and regional festivals in different parts of the country during that month, the company said in a statement. A good monsoon after two consecutive years of sub-normal rains could lead to a change in sentiments in the rural markets, which may lead to a positive turn-around in the industry in the second half of this fiscal, HMCL said.
In the month of May, HMCL forayed into the world of motorcycle rally racing, through a strategic alliance with Speedbrain GmbH, the German off-road racing specialist. The newly formed 'Hero MotoSports Team Rally' made its debut at the Merzouga Rally, a Dakar series race that recently concluded in Morocco.
Bajaj Auto dropped after reporting muted growth in sales volume in May 2016. The stock was off 0.76% at Rs 2,583. Bajaj Auto's total sales rose 1% to 3.47 lakh units in May 2016 over May 2015. Motorcycles sales rose 2% to 3.07 lakh units in May 2016 over May 2015. Sales of commercial vehicles declined 7% to 40,311 units in May 2016 over May 2015. Exports fell 10% to 1.43 lakh units in May 2016 over May 2015. The company announced the monthly sales volume data before market hours today, 2 June 2016.
TVS Motor Company rose 1.87% at Rs 294 after the company said its total sales rose 11% to 2.43 lakh units in May 2016 over May 2015. The announcement was made after trading hours yesterday, 1 June 2016. TVS Motor Company said that total two wheeler sales increased by 13% to 2.38 lakh units in May 2016 over May 2015. Domestic two wheeler sales grew by 17.9% to 2.06 lakh units in May 2016 over May 2015. Scooters sales of the company grew by 20.2 % to 65,434 units in May 2016 over May 2015. Motorcycles sales grew by 5.6% to 96,485 units in May 2016 over May 2015. Three wheeler sales fell 40.85% to 5,463 units in May 2016 over May 2015.
The company's total exports dropped 18.46% to 35,545 units in May 2016 over May 2015. Two wheeler exports fell 10.97% to 31,434 units in May 2016 over May 2015. TVS Motor Company said that the restricted availability of forex is affecting Indian exports to Africa including that of the company.
FMCG stocks were mixed. Jyothy Laboratories (up 4.34%), Godrej Consumer Products (up 3.11%), Dabur India (up 1.31%), Britannia Industries (up 1.08%), Colgate-Palmolive (India) (up 0.72%), Procter & Gamble Hygiene and Health Care (up 0.48%), Nestle India (up 0.09%) and Tata Global Beverages (up 0.01%) edged higher. Hindustan Unilever (down 1.74%), Bajaj Corp (down 1.15%), GlaxoSmithkline Consumer Healthcare (down 1.1%), Marico (down 1.17%) and Emami (down 1.09%) edged lower.
Tata Power Company (Tata Power) rose 0.07% at Rs 72.90. Maithon Power (MPL), a 74:26 joint venture between the company and Damodar Valley Corporation (DVC), today, 2 June 2016, announced that its power generation rose 7% to 7,172 million units in FY 2016 over FY 2015. The power project is located at Maithon in Jharkhand with a total capacity of 1,050 megawatts (MW). The project supplies power to three states namely Delhi, West Bengal and Kerala as also to DVC as per long term power purchase agreement.
Meanwhile, the central government yesterday, 1 June 2016, announced increase ranging from 1.5% to 9.2% in the minimum support prices (MSPs) of Kharif crops for the 2016-17 season. The MSPs include a bonus of Rs 425 per quintal for pulses, namely Arhar (Tur), Urad and Moong, a bonus of Rs 200 per quintal for Sesamum and a bonus of Rs 100 per quintal for other kharif oilseeds namely, Groundnut-in-shell, Sunflowerseed, Soyabean, and Nigerseed. The government said in a statement that the decision to offer bonus over MSP on pulses and oilseeds is aimed at giving a strong price signal to farmers to increase acreage and invest for increase in productivity of these crops. There is an increasing gap between the demand and domestic supply of pulses and oilseeds and the reliance on import is increasing. The increase in cultivation of leguminous pulses and oilseeds will also have additional environmental benefits as these crops are less water consuming and help in nitrogen fixation in the soil.
With a view to stabilize prices of pulses, the government is also creating buffer stocks of pulses through both domestic procurement and import.
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