Telecom stocks and index heavyweight Infosys led upmove for key benchmark indices. The barometer index, the S&P BSE Sensex, rose 136.08 points or 0.54% at 25,405.72, as per the provisional closing data. The Nifty 50 index rose 43 points or 0.56% at 7,756.05, as per the provisional closing data. The two key indices extended gains towards the last one-hour of the trading session as European stocks extended gains. Asian and European stocks edged higher after US monthly job data reinforced market expectations that the US Federal Reserve will adopt a slower path for interest-rate increases.
The Sensex rose 154.51 points or 0.61% at the day's high of 25,424.15 in late trade, its highest level since 31 March 2016. The barometer index fell 46.15 points or 0.18% at the day's low of 25,223.49 in afternoon trade. The Nifty rose 51.40 points or 0.66% at the day's high of 7,764.45 in late trade, its highest level since 31 March 2016. The index fell 8.65 points or 0.11% at the day's low of 7,704.40 in afternoon trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,645 shares rose and 967 shares fell. A total of 134 shares were unchanged. The BSE Mid-Cap index provisionally rose 0.24%. The BSE Small-Cap index provisionally rose 0.52%. Both these indices underperformed the Sensex.
In overseas stock markets, Asian and European stocks edged higher after US monthly job data reinforced market expectations that the US Federal Reserve will adopt a slower path for interest-rate increases. US stocks registered modest gains during the previous trading session on Friday, 1 April 2016, as investors bet that a spate of strong economic data, including the March jobs report, won't speed up the pace of interest-rate increases by the Federal Reserve. In a speech in New York on 29 March 2016, Federal Reserve Chairwoman Janet Yellen stressed a need for a cautious stance on interest-rate increases in the backdrop of global economic slowdown.
The total turnover on BSE amounted to Rs 1981 crore, lower than turnover of Rs 2144.57 crore registered during the previous trading session.
Telecom stocks edged higher after media reports suggested that the government has cut spectrum usage charges (SUC) from 5% of adjusted gross revenues (AGR) to 3%. Idea Cellular (up 6.08%), Bharti Airtel (up 4.04%) and Reliance Communications (up 1.89%) rose. SUC is a charge levied annually as a percentage of the AGR that mobile companies make from telecom services.
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IT stocks edged higher on renewed buying. Tech Mahindra (up 1.69%), Persistent Systems (up 1.55%), Wipro (up 0.78%), Oracle Financial Services Software (up 0.14%) and TCS (up 0.76%) rose.
Index heavyweight and IT major Infosys was up 3.45% at Rs 1,247.55. The stock hit a high of Rs 1,249.90 in intraday trade, which is a record high for the counter. The stock hit a low of Rs 1,212 in intraday trade. The company is set to announce its Q4 March 2016 results on 15 April 2016.
HCL Technologies rose 2.35% at Rs 840 after the company announced on Saturday, 2 April 2016, an agreement to acquire (through demerger) all of the business of Geometric, except the 58% stake that Geometric owns with Dassault Systemes. Shares of Geometric spurted 19.26% at Rs 233.75. In consideration of this acquisition, HCL will issue 10 equity shares of the company for every 43 equity shares held in Geometric. In total, HCL will issue 1.56 crore equity shares of Rs 2 each. The transaction is expected to be accretive on cash earnings per share, HCL said. The transaction is expected to be closed in Q2 December 2016. Geometric is one of India's leading PLM consulting, mechanical engineering and manufacturing engineering services providers. The acquisition strengthens HCL's presence significantly in the PLM consulting as well as mechanical and manufacturing engineering space. It also significantly strengthens HCL's automotive and industrial practices. The acquisition would take place through a scheme of arrangement which would be subject to the approval of the High Courts at Mumbai and Delhi in addition to the approval of the regulatory authorities, HCL Tech said.
Index heavyweight and cigarette major ITC dropped 1.46% at Rs 331.10 after the company announced that it has closed manufacturing operations at all its cigarette factories in India with effect from 1 April 2016 until clarity emerges on the quantum of mandatory pictorial health warning on cigarette packages. The announcement was made on Saturday, 2 April 2016.
Mahindra & Mahindra (M&M) rose 4.34% at Rs 1,246.45 after the company announced the launch of its new sport utility vehicle (SUV) NuvoSport built on the same new generation platform as the Scorpio. The NuvoSport's base variant is priced at Rs 7.35 lakh ex-showroom Thane. It is available in six variants. NuvoSport will be available across the company's dealerships pan India with immediate effect. The announcement was made during market hours today, 4 April 2016.
On the macro front, the finance ministry after trading hours on Friday, 1 April 2016, announced that as per initial estimates, the fiscal deficit for 2015-16 is expected to be within the target of 3.9% of GDP. It further said that the government remains committed to the path of fiscal consolidation. The government's Plan Expenditure for 2015-16 is expected to be around Rs 4.70 lakh crore, which will be higher than the budget estimate and also higher than the actual plan expenditure in 2014-15.
Meanwhile, the outcome of a monthly survey showed that the growth in India's manufacturing accelerated last month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) hit eight-month high of 52.4 in March 2016. The index rose from 51.1 in February 2016. Despite gathering momentum, growth of production and new orders still remained below trend rates. The latest monthly survey showed that inflationary pressures in India's manufacturing are on the upside, with cost burdens rising at the quickest pace in three months in March and output charge inflation reaching a 16-month high in the month just gone by. The build-up in inflationary pressures may lead the Reserve Bank of India to hold off from cutting rates, especially as solid growth was seen in March, said Pollyanna De Lima, Economist at Markit.
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