A bout of volatility was witnessed as the barometer index, the S&P BSE Sensex, once again slipped into the red after reversing intraday losses in morning trade. At 10:18 IST, the Sensex was down 15.55 points or 0.06% at 25,673.31. The Nifty 50 index was currently down 10.85 points or 0.14% at 7,855.20. The Nifty fell 15.95 points or 0.2% at the day's low of 7,850.10, in morning trade. The index gained 7.95 points or 0.1% at the day's high of 7,874 at the onset of the trading session, its highest level since 3 May 2016. The Sensex shed 39.57 points or 0.15% at the day's low of 25,629.74 in morning trade. The barometer index rose 21.80 points or 0.08% at the day's high of 25,710.69 at the onset of the trading session, its highest level since 29 April 2016.
In overseas stock markets, Japanese stocks led gains in Asian equities after Japanese finance minister Taro Aso's comments that it would be natural for the Japanese government to intervene if the yen were to gain abruptly against the US dollar. The Nikkei 225 Average was currently up 2.14%. A strong local currency puts pressure on the earnings of exporters because it can make their goods more expensive overseas.
Chinese stocks witnessed a mixed trend after inflation data. In mainland China, the Shanghai Composite index was currently up 0.17%. In Hong Kong, the Hang Seng index was currently off 0.12%. The latest data showed that China's consumer price index remained unchanged at 2.3% in April from a year earlier. The producer price index declined 3.4% in April from a year earlier, compared with a 4.3% on-year drop in March.
Most US stocks edged higher yesterday, 9 May 2016, as gains for drug companies were almost cancelled by sharp losses for metals and energy companies. Minneapolis Fed President Neel Kashkari said in a speech yesterday, 9 May 2016, that he supported the current dovish stance of the Federal Reserve. Chicago Fed President Charles Evans said in a speech in London yesterday, 9 May 2016, that a stronger labor market is underpinning growth prospects. The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 14-15 June 2016.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 919 shares rose and 710 shares fell. A total of 84 shares were unchanged. The BSE Mid-Cap index was currently up 0.24%. The BSE Small-Cap index was currently up 0.27%. Both these indices outperformed the Sensex.
Auto stocks declined. Tata Motors (down 2.47%), Mahindra & Mahindra (M&M) (down 0.33%), Ashok Leyland (down 0.19%), Maruti Suzuki India (down 0.19%), Eicher Motors (down 0.63%), Hero MotoCorp (down 0.14%), Bajaj Auto (down 0.55%) and TVS Motor Company (down 0.33%) declined.
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Capital goods stocks gained. BEML (up 1.18%), Bharat Electronics (up 0.89%), ABB India (up 0.8%), L&T (up 0.28%), Thermax (up 0.06%), and Siemens (up 0.52%) gained. Bharat Heavy Electricals (Bhel) (down 0.35%), and Havells India (down 1.63%) declined.
ALSTOM India lost 1.68% after net profit declined 61.9% to Rs 27.40 crore on 53.2% fall in total income to Rs 396.85 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 9 May 2016. ALSTOM India said that over the last 2-3 years the capital investments in the power sector, particularly in hydro and thermal have slowed down. In addition, several projects in hydro and thermal sector are stalled due to external factors, blocking company's financial resources and creating large work in progress. All these have led to lower sales and revenue generation impacting the company's financial performance over the last few quarters, ALSTOM India said. In the overall business interest of the company, it has been decided to right-size the scale of operations. This will lead to rationalizing the work force to match with the current backlog and operating levels, the company said. This rationalization is being carried on as part of the ongoing steps taken by the company to reduce the operating costs, improve the competitiveness and contain the operating losses. The cost of rationalization would be factored in the financials for the forthcoming quarters. The rationalization exercise is not expected to disrupt or adversely affect the commercial production or operations of any unit or division of the company, it added.
The company's board of directors has not recommended any dividend for the year ended 31 March 2016.
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