Gains in index heavyweights Infosys, ITC and HDFC aided upmove for key benchmark indices. At 13:18 IST, the barometer index, the S&P BSE Sensex, was up 156.53 points or 0.61% at 25,778.46. The Nifty 50 index was currently up 46.60 points or 0.59% at 7,897.05. The two key benchmark indices extended gains in afternoon trade.
The Sensex hit 15-week high when it jumped 243.28 points or 0.94% at the day's high of 25,870.03 at the onset of trading session. The barometer index gained 7.37 points or 0.02% at the day's low of 25,634.12 in early trade. The Nifty, too, hit 15-week high when it rose 62.20 points or 0.79% at the day's high of 7,912.65 at the onset of trading session, its highest level since 4 January 2016. The index fell 7.70 points or 0.09% at the day's low of 7,842.75 in early trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,321 shares gained and 1,092 shares declined. A total of 144 shares were unchanged. The BSE Mid-Cap index was currently up 1.01%. The BSE Small-Cap index was currently up 0.86%. Both these indices outperformed the Sensex.
In overseas stock markets, Asian and European stocks dropped after the world's major oil producers at a meeting held in Doha, Qatar failed to reach an agreement yesterday, 17 April 2016, to freeze production. Japanese stocks led decline in Asian stocks as the yen strengthened against the dollar in the wake of earthquakes in the Kumamoto prefecture since last week, including on Saturday, 16 April 2016. The Nikkei 225 Average settled 3.4% lower. The stronger yen makes Japanese exports less competitive and cuts into the value of repatriated earnings.
Trading in US index futures indicated that the Dow Jones Industrial Average could fall 102 points at the opening bell today, 18 April 2016. US stocks closed modestly lower during the previous trading session on Friday, 15 April 2016, as a retreat in oil prices weighed on energy shares.
Realty stocks were mixed. DLF (up 0.78%), Sobha (up 1.77%), NBCC (up 0.21%), Housing Development & Infrastructure (HDIL) (up 1.17%), and Oberoi Realty (up 6.41%) edged higher. D B Realty (down 0.42%), Indiabulls Real Estate (down 0.73%), Unitech (down 1.18%), and Godrej Properties (down 1.13%) declined.
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Most auto stocks declined. Tata Motors (down 0.75%), Ashok Leyland (down 1.54%), Maruti Suzuki India (down 0.38%), Hero MotoCorp (down 2.17%), and Bajaj Auto (down 1.6%) declined. Eicher Motors (up 1.44%) and TVS Motor Company (up 1.29%) gained.
Mahindra & Mahindra (M&M) edged higher in volatile trade after a top official of the company said that the company is working on a range of gasoline engine options. The stock was currently up 0.17% to Rs 1,334.90. The stock hit high of Rs 1,354.70 and low of Rs 1,316.50 sofar during the day. M&M's Executive Director and Group President, Auto and Farm Equipment Sectors & Member of the Group Executive Board Dr. Pawan Goenka said in an interaction with auto industry analysts on 13 April 2016 that the company intends to launch gasoline options for its sports utility vehicles Scorpio and XUV500 within the next 12 months. KUV100 has received good response from customers. Currently, KUV100 has a waiting period of 6-8 weeks. The gasoline variant of KUV100 has received good response and contributes to about 45% of KUV100 sales. Goenka expects the ongoing momentum in M&M's exports growth to continue with the neighboring markets as well as Africa and South American markets.
With regard to the tractors business, Goenka said that the company is very well poised to take advantage of the expected growth in the tractors industry in India with a strong launch of its 'Yuvo' series (5 tractor models) in the mainstream segment of 30-45 hp which accounts for 80% of the tractors market size. The Yuvo has been developed after significant understanding of customer insights, he said.
Goenka said that complying with safety norms would mean an average cost of Rs 25,000 to Rs 30,000 per vehicle and complying with BSVI norms would increase the price by around Rs 1.50 lakh per vehicle (approximate cost increase of Rs 90,000 plus taxes) based on current technologies for complying with these norms. The capex requirement for M&M for BSVI compliance would be around Rs 500 crore. There will be additional capex to be incurred at the vendors end, Goenka said.
Index heavyweight and cigarette maker ITC rose after the company on Friday, 15 April 2016, announced that consequent upon a High Court order passed in favour of the company, the company will soon resume manufacture of cigarettes in its factories. The stock was currently up 1.19% at Rs 334.90. The stock hit high of Rs 338.40 and low of Rs 331.10 so far during the day. Early this month, ITC announced temporary closure of manufacturing operations at all its cigarette factories in India with effect from 1 April 2016 due to lack of clarity on the quantum of mandatory pictorial health warning on cigarette packages.
Alkem Laboratories fell 4.4% on reports that German authorities had accused the company of fudging data in some clinical trials. The European Medicines Agency (EMA) is investigating the medicines after Germany reported its findings to EMA and urged it to take action, reports suggested. Alkem said that the Federal Institute of Drug and Medical Devices (BfArM), Germany, and the Health Care Inspectorate (IGZ), Ministry of Health of the Netherlands performed a joint inspection in March 2015 at Alkem's bioequivalence facility at Taloja. The inspection refers to bioequivalence studies conducted for the period between March 2013 and March 2015 and in particular to bioequivalence trials of two products, of which one is commercialized and another is yet to be commercialized, Alkem said. Alkem said that it would be submitting a suitable clarification to EMA within the stipulated timelines to enable the Committee for Medicinal Products for Human Use (CHMP) take a balanced risk-benefit view with respect to these two products. Currently, sales from Europe contributes less than 1% to Alkem's total consolidated sales for the nine months of FY 2016, the company said.
Alkem said that the company responded to BfArM's inspection with a robust remediation plan. The company said that it has been implementing several measures, which include changes in staffing, upgrading equipment and improving quality assurance systems to ensure proper controls during bioequivalence studies and thorough review of the acquired data.
On the macro front, data released by the government today, 18 April 2016, showed that inflation based on the wholesale price index (WPI) remained in negative zone last month. WPI stood at negative 0.85% in March 2016 as compared to a reading of negative 0.91% in February 2016. Build up inflation rate in the financial year so far was minus 0.85% compared to a build up rate of minus 2.33% in the corresponding period of the previous year. Meanwhile, WPI for January 2016 was revised to a reading of negative 1.07% compared with a provisional reading of 0.9% reported on 15 February 2016.
Reserve Bank of India (RBI) Governor Raghuram Rajan said in an interview to a newspaper in Washington on Thursday, 14 April 2016, that if the monsoon is good, if inflation continues on a downward path and if there is continuing progress on food management reforms that reduce costs it will provide room for the RBI to further reduce policy interest rate. Recently, the weather office forecast good rains during the June-September 2016 southwest monsoon season. The RBI cut its benchmark policy rate viz. the repo rate by 25 basis points to 6.5% from 6.75% after a scheduled policy review on 5 April 2016. At that time, Rajan had indicated in his monetary policy statement that the RBI might cut the repo rate further in the coming months if macroeconomic and financial developments provide room for further rate cut. The RBI next undertakes monetary policy review on 7 June 2016.
Meanwhile, the finance ministry has clarified that taxes, cesses or duties such as excise duty, customs duty, Service Tax, State VAT, CST, income tax, wealth tax, stamp duty, taxes on professions, trades, callings or employment, octroi, entertainment tax, luxury tax and property tax are not liable to service tax. The government issued the clarification after the Union Budget 2016-17 slapped service tax on all services provided by the government or a local authority to a business entity with effect from 1 April 2016.
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