Intraday recovery in shares of state-run banks and further gains in index heavyweight ITC helped key benchmark indices extend gains in mid-afternoon trade. At 14:19 IST, the barometer index, the S&P BSE Sensex, was up 181.42 points or 0.68% at 26,966.97. The gains for the Sensex were higher in percentage terms than those for the 50-unit CNX Nifty index. The Nifty was up 39.35 points or 0.48% at 8,158.65. The Sensex failed to retain the psychological 27,000 mark after surpassing that mark in early trade. Pharma, oil and metal sector stocks were in demand.
In overseas stock markets, European shares reversed initial losses triggered by disappointing German manufacturing orders data. Asian stocks edged higher on prospects of a delay in the US Federal Reserve's plan to raise interest rates and signs of some stability in oil and commodity markets. US stocks jumped yesterday, 5 October 2015, with the S&P 500 index rising for the fifth day in a row, as rising oil prices boosted energy stocks and investors bet the Federal Reserve would not raise interest rates in calendar year 2015.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,492 shares rose and 1,082 shares declined. A total of 172 shares were unchanged. The BSE Mid-Cap index was up 0.31%. The index underperformed the Sensex. The BSE Small-Cap index was up 0.81%. The index outperformed the Sensex.
Shares of power generation and power distribution companies gained after the finance ministry said that it is preparing a financial restructuring plan for power distribution companies operated by state-government run entities. NTPC (up 0.43%), NHPC (up 1.76%), Adani Power (up 2.61%), Power Grid Corporation of India (up 0.45%), Reliance Infrastructure (up 0.63%) and Reliance Power (up 1.12%) gained. Torrent Power declined 0.17%.
Tata Power Company rose 3.28%. Tata Power Strategic Engineering Division (Tata Power SED) and Secusmart, the global expert in secure mobile communications, announced a comprehensive partnership for the Indian market. The announcement was made during market hours today, 6 October 2015. The two companies have signed a term sheet (MoU) providing a framework for the collaboration, the aim of which is to evaluate the design, development and marketing of a highly secure mobile communications system tailored to the needs of government customers in India.
The proposed collaboration is aimed at leveraging Tata Power SED's expertise in security, software and hardware design and manufacturing and Secusmart's expertise in software and security to provide a highly capable and secure communication solution meeting stringent government requires, Tata Power said in a statement. Secusmart GmbH, a subsidiary of BlackBerry, is a leading expert in the development and implementation of comprehensive solutions for protecting businesses and public authorities from electronic eavesdropping.
FMCG stocks gained. Nestle India (up 0.45%), Britannia Industries (up 1.26%), Jyothy Laboratories (up 2.25%), Procter & Gamble Hygiene and Health Care (up 0.12%), Hindustan Unilever (HUL) (up 2.3%), Dabur India (up 0.27%), GlaxoSmithkline Consumer Healthcare (up 0.05%), Godrej Consumer Products (up 0.94%), and Bajaj Corp (up 0.17%) gained. Tata Global Beverages (down 1.25%), Marico (down 0.07%), and Colgate Palmolive India (down 0.25%) declined.
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Tata Motors jumped 5.65%, with the stock extending a rally registered during the previous trading session. Jaguar Land Rover North America announced on 1 October 2015 that its US sales rose 61% to 6,850 units in September 2015 over September 2014.
Meanwhile, the outcome of a monthly survey from Markit Economics showed that the growth in India's services sector activity eased last month. The Nikkei India Business Activity index dropped to 51.3 in September 2015 from 51.8 in August 2015. The slowdown in growth in the services sector comes close on the heels of another data showing slowdown in growth momentum in the manufacturing sector in September 2015.
Meanwhile, the finance ministry yesterday, 5 October 2015, announced that the central government's expenditure on major subsidies has come down to 1.6% of GDP in 2015-16 from 2.5% of GDP in 2012-13. There could be a shortfall of around 5% to the estimated target of tax collection of Rs 14.5 lakh crore for the current fiscal year. The government is committed to achieving this year's fiscal deficit target as well as the fiscal glide path laid out in the budget, the finance ministry said. The central government's infrastructure spending has picked-up on the back of accelerated spending on highways, railways and the power sector. The central government's Plan Cap-EX has increased by over 30% this year. This is beginning to crowd-in private investment. The public private partnership projects which had been stalled are also now picking up.
With regard to inflation, the finance ministry said that the government's proactive food management to augment domestic supplies will ensure that food inflation is contained in the wake of scanty rains. The government and the Reserve Bank of India (RBI) will work together to consolidate the gains achieved in inflation control through the inflation targeting framework and the associated institutional arrangements. The finance ministry further said that the government will play its part to ensure that the benefits of falling interest rates are transmitted to the economy at large. A number of commercial banks have announced a reduction in their base rate during the past few days in the wake of a steeper-than-expected 50 basis points cut in the repo rate announced by the RBI after a regular monetary policy review early last week.
The finance ministry issued the statement after a press conference held by various secretaries to the Ministry of Finance and Chief Economic Adviser (CEA) Dr Arvind Subramanian on the completion of six months of financial year 2015-16 on 30 September 2015.
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