A rangebound trading was witnessed as key benchmark indices hovered in positive zone in mid-afternoon trade. At 14:15 IST, the barometer index, the S&P BSE Sensex, was up 107.37 points or 0.4% at 26,775.33. The Nifty 50 index was currently up 33.60 points or 0.41% at 8,193.70. Data showing acceleration in growth in India's gross domestic product in Q4 March 2016, a sharp pick up in growth in core sector in April 2016 and fiscal deficit meeting the target for fiscal year 2015-16 aided the upmove on the bourses.
The market breadth indicating the overall health of the market was positive. On BSE, 1,346 shares rose and 1,162 shares declined. A total of 148 shares were unchanged. The BSE Mid-Cap index was currently up 0.07%, underperforming the Sensex. The BSE Small-Cap index was currently up 0.43%, outperforming the Sensex.
On the macro front, the latest data showed that India's gross domestic product (GDP) growth accelerated to 7.9% in Q4 March 2016 compared with a revised reading of a growth of 7.2% in Q3 December 2015. For the fiscal year 2015-16, GDP grew 7.6%, which was higher than 7.2% growth recorded in 2014-15. The government released the GDP data after market hours yesterday, 31 May 2016. Another data released by the government after market hours yesterday, 31 May 2016, showed the output of eight core infrastructure industries carrying 38% of the weight in the Index of Industrial Production (IIP) increased at 18-months high pace of 8.5% in April 2016.
Meanwhile, the finance ministry said that as per the provisional accounts for 2015-16, the fiscal deficit in 2015-16 stands at 3.9% of GDP, meeting the target set by the government. This is a significant improvement over the fiscal deficit of 4.1% in 2014-15 and 4.7% in 2013-14. Revenue deficit has also shown significant improvement due to a sharp increase in capital expenditure of the central government. Revenue deficit improved to 2.5% of GDP in 2015-16 from 2.9% in 2014-15. There was also an increase in the Plan Expenditure in 2015-16 despite substantial increase in share of tax devolution to the States.
Meanwhile, the outcome of a monthly survey today, 1 June 2016, showed slight expansion in growth in India's manufacturing sector in May 2016. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) edged higher to 50.7 in May from 50.5 in April. The rate of growth in output as well as new orders was well below trend. New export orders fell for the first time in 32 months. Sub-sector data highlighted intermediate goods as the best performing category in May, where growth rates for new orders and output were stronger than those seen among consumer goods producers. Investment goods firms, in contrast, saw further declines in new work and production.
Although firms passed on to their clients part of the additional increase in costs by way of raising selling prices, the rate of charge inflation eased to the weakest in the current three-month sequence of increases despite cost inflation climbing to a 14-month high.
More From This Section
In overseas stock markets, European stocks edged lower after the release of mixed manufacturing activity data from China and as a decline in oil prices weighed on sentiment, while investors awaited the release of euro zone manufacturing data due later in the day. Chinese stocks edged lower after the release of the monthly manufacturing and nonmanufacturing data. In mainland China, the Shanghai Composite index settled 0.11% lower. In Hong Kong, the Hang Seng index closed 0.26% lower. An official measure of China's manufacturing sector held steady in May while a private gauge edged down slightly. China's official purchasing managers' index for manufacturing remained at 50.1 last month, the same level as in April and the third consecutive month the index kept above 50, the line separating expansion from contraction. The competing private Caixin manufacturing PMI index slipped to 49.2 in May from 49.4 in April, the fifteenth consecutive month of contraction. Another data showed that China's official nonmanufacturing PMI fell to 53.1 from 53.5 in April.
US stocks ended mostly lower yesterday, 31 May 2016, as investors turned cautious ahead of key economic reports this week for indications on the pace and timing of the next interest rate hike. The Federal Open Market Committee next undertakes monetary policy review on 14-15 June 2016. The Federal Reserve has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015.
Bank stocks edged lower. Among public sector banks, Bank of Baroda (down 2%), State Bank of India (down 2.42%), Canara Bank (down 2.97%), Corporation Bank (down 2.23%), IDBI Bank (down 1.32%) and Punjab National Bank (down 1.26%) edged lower. Indian Bank (up 0.66%) and Central Bank of India (up 0.97%) edged higher.
Among private sector banks, Yes Bank (down 1.85%), ICICI Bank (down 1.12%), Kotak Mahindra Bank (down 0.41%), HDFC Bank (down 0.58%) and IndusInd Bank (down 0.12%) edged lower.
Axis Bank rose 0.45% at Rs 517.90 after the Reserve Bank of India (RBI) notified that registered foreign portfolios investors can now invest up to 62% of the paid up capital of the bank. The central bank yesterday, 31 May 2016, notified that Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) can now invest up to 62% of the paid-up capital of Axis Bank, from existing 49% under the Portfolio Investment Scheme (PIS). The central bank further notified that the total foreign investment from all sources i.e. Foreign Institutional Investors (FII)/Registered Foreign Portfolios Investors (RFPIs)/Foreign Direct Investment (FDI)/Non-Resident Indians (NRI)/Persons of Indian Origin (PIO)/American Depository Receipts (ADR)/Global Depository Receipts (GDR) in the bank shall not exceed 62% of paid-up capital. The central bank has stated that Axis Bank has passed resolutions at its board of directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs/RFPIs. The purchases could be made through primary market and stock exchanges, RBI said.
Pharma stocks witnessed a mixed trend. Alkem Laboratories (up 2.13%), Divi's Laboratories (up 1.85%), Wockhardt (up 1.56%), Aurobindo Pharma (up 1.25%), Lupin (up 1%) and Strides Shasun (up 0.68%) gained. Ipca Laboratories (down 0.84%), GlaxoSmithkline Pharmaceuticals (down 0.34%), Sun Pharmaceutical Industries (down 0.35%) and Cipla (down 0.34%) edged lower.
Dr Reddy's Laboratories was down 0.23% at Rs 3,177. The stock hit a high of Rs 3,219 and a low of Rs 3,173.95 so far during the day. Dr Reddy's Lab announced that its US subsidiary Promius Pharma, LLC, US launched Sernivo (betamethasone dipropionate) spray, 0.05% in the US. Sernivo spray, a prescription topical steroid approved by the Food and Drug Administration (FDA) in February 2016, is indicated for the treatment of mild to moderate plaque psoriasis in patients 18 years of age or older. The announcement was made during market hours today, 1 June 2016.
Glenmark Pharmaceuticals was off 0.07%. The company announced after market hours yesterday, 31 May 2016, that the issuance committee of the company approved raising of up to $200 million through foreign currency convertible bonds (FCCBs) to be listed on the Singapore Stock Exchange. The FCCB issue was launched yesterday, 31 May 2016. The floor price for conversion of the FCCBs shall be Rs 861.84.
The company had earlier received approval from its board and its shareholders to raise up to $500 million through issuance of securities including equity shares or equity linked securities, including through qualified institutional placement (QIP), convertible bonds, warrants, depository receipts.
Cadila Healthcare was off 0.82% at Rs 333.40. The company announced that it has received final approval from the US Food and Drug Administration to market Amantadine Hydrochloride Capsules USP, 100 milligram. The announcement was made during market hours today, 1 June 2016. Cadila Healthcare said that the estimated sales for Amantadine Hydrochloride Capsules USP as per 1MS (MAT April 2016) is $40.1 million. The drug which is used in the treatment of Parkinson's disease and select viral infections, will be produced at the group's formulations manufacturing facility at the pharma special economic zone in Ahmedabad, the company said. The group now has more than 100 approvals and has so far filed nearly 270 Abbreviated New Drug Applications (ANDAs) since the commencement of the filing process in FY 2003-2004, Cadila Healthcare said.
Mahindra & Mahindra (M&M) rose 0.72% at Rs 1,334.20 after the company during market hours today, 1 June 2016 said that its total tractor sales rose 20% to 23,018 units in May 2016 over May 2015. Domestic tractor sales rose 21% to 22,148 units in May 2016 over May 2015. Exports declined 14% to 870 units in May 2016 over May 2015.
Separately, M&M during market hours today, 1 June 2016 said its total auto sales rose 11% to 40,656 units in May 2016 over May 2015. Domestic sales rose 10% to 36,613 units in May 2016 over May 2015. Exports rose 21% to 4,043 units in May 2016 over May 2015.
Powered by Capital Market - Live News