A bout of volatility was witnessed as key benchmark indices trimmed gains in mid-morning trade after latest data showed that the manufacturing sector lost growth momentum last month. At 11:19 IST, the barometer index, the S&P Sensex, was up 85.17 points or 0.33% at 26,240. The gains for the Sensex were higher in percentage terms than those for the 50-unit CNX Nifty which traded near the flat line. The Nifty was up 7.35 points or 0.09% at 7,956.25. The Nifty failed to retain the psychological 8,000 level after crossing that level in early trade.
Due to slower increase in new business, the Nikkei India Manufacturing Purchasing Managers' Index (PMI) fell to seven-month low of 51.2 in September 2015 from 52.3 in August 2015.
The market breadth indicating the overall health of the market was positive. On BSE, 1,219 shares rose and 957 shares declined. A total of 99 shares were unchanged. The BSE Mid-Cap index was up 0.23%, underperforming the Sensex. The BSE Small-Cap index was up 0.34%, outperforming the Sensex.
In sectoral indices, IT stocks edged higher. Wipro (up 2.07%), Infosys (up 1.68%), Tech Mahindra (up 0.82%) and TCS (up 1.66%) edged higher. Oracle Financial Services Software (down 0.26%) and MindTree (down 1.6%) edged lower.
HCL Technologies tumbled 9.78% at Rs 886.10 after the company after market hours yesterday, 30 September 2015, in a pre-quarter earnings update said that in Q1 September 2015, its revenue growth is likely to be tepid on account of adverse currency impact, a client specific issue and skewness in revenue growth due to transition timelines for complex engagements particularly in infrastructure services vertical. During this quarter, revenues to be reported in US dollar would have an adverse impact of 80 basis points (bps) on account of sharp depreciation of multiple currencies against the US dollar, the company added.
HCL Technologies said that certain differences have arisen with one particular multi-million multi-year custom application development project being executed by the company for one of the customers in the public services vertical. The company further said that the contract is likely to be cancelled and as a matter of prudence the company is considering reserving a sum of up to $20 million in Q1 September 2015.
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Telecom stocks gained. Reliance Communications (up 5.08%), Mahanagar Telephone Nigam (up 0.31%), Tata Teleservices (Maharashtra) (up 0.65%), Idea Cellular (up 0.3%) and Bharti Airtel (up 0.4%) edged higher.
Maruti Suzuki India (MSIL) declined 1.84% at Rs 4,603.10. The stock hit a high of Rs 4,720 and a low of Rs 4,585 so far during the day. MSIL's total sales rose 3.7% to 1.13 lakh units in September 2015 over September 2014. Total domestic sales rose 6.8% to 1.06 lakh units in September 2015 over September 2014. Exports dropped 26.6% to 7,676 units in September 2015 over September 2014.
Axis Bank dropped 0.16% at Rs 494.75. The stock hit a high of Rs 503.45 and a low of Rs 490.40 so far during the day. Axis Bank has cut its base rate by 35 basis points (bps) to 9.5% with effect from 5 October 2015. Accordingly, the effective rate applicable to various fund based credit and credit limits which are linked to the bank's base ratee will reduce by 35 basis points. A number of banks have announced reduction in their base rate after the Reserve Bank of India (RBI) cut its benchmark lending rate viz. the repo rate by 50 basis points after a monetary policy review early this week.
Meanwhile, Axis Bank announced after market hours yesterday, 30 September 2015, that the board of directors has allotted 15,000 Unsecured Redeemable Non Convertible Subordinated Debentures (Basel - III Compliant Tier II Debentures) (Series - 23) of the face value of Rs 10 lakh each for cash at par aggregating to Rs 1500 crore on a private placement basis. The debentures will be listed on the Wholesale Debt Market segment of the BSE and National Stock Exchange of India. The debentures are rated "AAA" by CRISIL, CARE and ICRA.
IDBI Bank rose 1.78%. IDBI Bank has cut its base rate by 25 bps to 9.75% with effect from 5 October 2015. The bank has also reduced the Benchmark Prime Lending Rate (BPLR) by 25 bps to 14.25% p.a. with effect from 5 October 2015. The bank has also decided to reduce the retail term deposit rates in select buckets by 25 to 50 bps with effect from 5 October 2015.
Kalpataru Power Transmission (KPTL) rose 3.64% at Rs 263.65 after the company announced that it has secured new orders worth over Rs 781 crore. The company made announcement after market hours yesterday, 30 September 2015.
Among macro economic data, the eight core industries, comprising nearly 38% of the weight of items included in the Index of Industrial Production (IIP), has shown an output growth of 2.6% in August 2015 over August 2014. Its cumulative output growth during April to August 2015-16 was 2.2% compared with 5.6% growth in the corresponding period of last year.
In overseas stock markets, Asian stocks edged higher after the better-than-expected official Chinese manufacturing data and solid US private sector payroll data for September 2015. Trading in US index futures indicated that the Dow Jones Industrial Average may surge 124.50 points at the opening bell today, 1 October 2015. US stocks surged yesterday, 30 September 2015, as investors welcomed a report from the payroll processor ADP that showed better-than-expected job gains in the private sector in September, while they shrugged off a dismal reading on Chicago-area manufacturing, which dropped into contraction territory.
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