Key benchmark indices extended intraday gains in afternoon trade. The gains for the benchmark indices were currently small. The barometer index, the S&P BSE Sensex, was currently up 62.62 points or 0.22% at 28,322.76. The market breadth indicating the overall health of the market was strong.
Meanwhile, a weaker-than-expected US jobs data released on Friday, 3 April 2015, has led to investors delaying expectations of an increase in the US Federal Reserve's key interest rate. Meanwhile, the outcome of a survey today, 6 April 2015, showed that growth in India's services sector moderated last month.
Bank stocks were mixed ahead of a monetary policy review from the Reserve Bank of India (RBI) scheduled tomorrow, 7 April 2015. Shares of Kotak Mahindra Bank and ING Vysya Bank, both, extended gains registered during the previous trading session triggered by Reserve Bank of India (RBI) approving the merger of ING Vysya Bank with Kotak Mahindra Bank. ONGC edged higher after the company said that promoters of ONGC Tripura Company (OTPC) with ONGC as one of the promoters have entered into definitive agreements with India Infrastructure Fund II by which the latter will be acquiring 23.5% stake in OTPC.
Earlier, key benchmark indices hit their highest level in almost two weeks at the onset of the trading session after opening with an upward gap.
The Reserve Bank of India (RBI) is widely expected to keep its benchmark lending rate viz. the repo rate unchanged at first bi-monthly Monetary Policy for 2015-16 scheduled tomorrow, 7 April 2015, as Governor Raghuram Rajan waits to see how RBI's recent rate cuts percolate through the country's financial system.
The government after trading hours on Wednesday, 1 April 2015, in its five-year Foreign Trade Policy 2015-20 (FTP 2015-20) announced the launch of a new Merchandise Exports from India Scheme (MEIS) for export of specified goods to specified markets. Meanwhile, the outcome of a survey on Thursday, 2 April 2015, showed that manufacturing activity in India witnessed an overall improvement last month.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 209.87 crore during the previous trading session on Wednesday, 1 April 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 197.25 crore on Wednesday, 1 April 2015, as per provisional data. The stock market was closed on 2 April and 3 April on account of holidays.
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In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged higher after Saudi Arabia raised prices for crude sales to Asia for a second month, signalling better demand in the region.
In overseas markets, Asian stocks were mixed. US stock index futures fell as disappointing job data for March 2015 which was announced on Friday, 3 April 2015, when the US stock market was closed on account of Good Friday triggered concerns about the coming corporate reporting season.
At 13:16 IST, the S&P BSE Sensex was up 62.62 points or 0.22% at 28,322.76. The index jumped 107.44 points at the day's high of 28,367.58 in early trade, its highest level since 24 March 2015. The index fell 38.15 points at the day's low of 28,221.99 in early afternoon trade
The CNX Nifty was up 13.70 points or 0.16% at 8,599.95. The index hit a high of 8,619.15 in intraday trade, its highest level since 24 March 2015. The index hit a low of 8,573.75 in intraday trade.
The BSE Mid-Cap index was up 66.81 points or 0.62% at 10,817.23. The BSE Small-Cap index was up 107.93 points or 0.97% at 11,254.65. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,523 shares gained and 914 shares fell. A total of 110 shares were unchanged.
Bank stocks were mixed ahead of a monetary policy review from the Reserve Bank of India (RBI) scheduled tomorrow, 7 April 2015. Among public sector banks, Union Bank of India (down 2.1%), Syndicate Bank (down 1.84%), IDBI Bank (down 1.58%), UCO Bank (down 1.52%), Andhra Bank (down 1.55%), Oriental Bank of Commerce (down 1.21%), Central Bank of India (down 1.14%), Punjab National Bank (down 1.02%), Bank of Baroda (down 0.62%), and State Bank of India (down 0.37%) edged lower. Corporation Bank (up 1.29%), Bank of Maharashtra (up 1.06%), United Bank of India (up 1.21%), Bank of India (up 0.73%) and Dena Bank (up 0.39%) edged higher.
Among private sector banks, Federal Bank (down 2.1%), HDFC Bank (down 1.19%), Karnataka Bank (down 0.86%), and ICICI Bank (down 1.77%) edged lower. South Indian Bank (up 1.94%) and Yes Bank (up 0.03%) edged higher.
Reserve Bank of India (RBI) on 1 April 2015 announced that the entire amount due to a bank in respect of fraud committed by borrowers shall be provided for over a period not exceeding four quarters commencing with the quarter in which the fraud has been detected. This is irrespective of the quantum of security held against such fraud accounts, the RBI said. The RBI also said that in case of delay by the concerned bank in reporting the fraud to the RBI, the entire provisioning is required to be made at once. In addition, in such cases, the RBI may also initiate appropriate supervisory action where there has been a delay by the bank in reporting the fraud or provisioning there against.
Meanwhile, RBI governor Raghuram Rajan on Thursday, 2 April 2015, said the nation has enormous financing needs in infrastructure and far too many of banks already have too much exposure to the infrastructure sector. The RBI governor cautioned that the required national push to finance infrastructure should not override financial stability, which is key to national security. He suggested that going forward, the RBI needs to develop new sources of risk capital so that India's infrastructure needs can be financed with moderate amount of debt.
Shares of Kotak Mahindra Bank and ING Vysya Bank, both, extended gains registered during the previous trading session triggered by Reserve Bank of India (RBI) approving the merger of ING Vysya Bank with Kotak Mahindra Bank. Shares of Kotak Mahindra Bank were up 2.13%. Shares of ING Vysya Bank were up 1.71%. The merger came into effect from 1 April 2015. It may be recalled that Kotak Mahindra Bank and ING Vysya Bank had on 20 November 2014 announced an all-stock amalgamation of ING Vysya Bank with Kotak Mahindra Bank. As part of the scheme, 725 equity share of Rs 5 each of Kotak Mahindra Bank will be allotted for every 1,000 equity shares of Rs 10 each held in ING Vysya Bank.
IndusInd Bank fell 0.92% at Rs 918.55. The stock hit a high of Rs 940 and a low of Rs 914 so far during the day. IndusInd Bank after market hours on Wednesday, 1 April 2015, said that the bank has allotted 5,000 rated, listed, senior unsecured redeemable, non-convertible bonds in the nature of debentures for face value of Rs 10 lakh each on 31 March 2015 to the identified investor(s) on private placement basis, for an amount of Rs 500 crore.
Maruti Suzuki India fell 0.34% at Rs 3,630. The stock hit a high of Rs 3,670 and a low of Rs 3,622.35 so far during the day. Maruti Suzuki India during market hours today, 6 April 2015, said its total production rose 12.96% to 1.22 lakh units in March 2015 over March 2014.
ONGC edged higher after the company said that promoters of ONGC Tripura Company (OTPC) with ONGC as one of the promoters have entered into definitive agreements with India Infrastructure Fund II by which the latter will be acquiring 23.5% stake in OTPC. The stock was up 2.37% at Rs 313.70. ONGC, IL&FS Energy Development Company (IEDCL) and Government of Tripura, the three promoters of ONGC Tripura Company (OTPC), have entered into definitive agreements with India Infrastructure Fund II by which the latter will be acquiring 23.5% stake in OTPC. The announcement was made on Friday, 3 April 2015. The total consideration of the transaction is about Rs 426 crore, ONGC said. Post this transaction, ONGC will hold 50% stake, IEDCL will own 26%, India Infrastructure Fund II will hold 23.5% and the Government of Tripura will hold 0.5% stake in OTPC. The investment by India Infrastructure Fund II brings on board a credible infrastructure partner, further strengthening the core development theme of the project, ONGC said.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.1775, compared with its close of 62.49 during the previous trading session on 31 March 2015. The foreign exchange market was closed from 1 April to 3 April 2015.
Brent crude oil futures edged higher after Saudi Arabia raised prices for crude sales to Asia for a second month, signalling better demand in the region. Brent for May settlement was up $1.85 a barrel at $56.80 a barrel. While Saudi Arabia's state-run oil company Saudi Aramco Oil Co. raised price differentials for all its crude grades sold to Asia, it lowered most prices for the US, reflecting weaker Nymex crude prices and an oversupply in the US market.
Closer home, the Reserve Bank of India (RBI) is widely expected to keep its benchmark lending rate viz. the repo rate unchanged at first bi-monthly Monetary Policy for 2015-16 scheduled tomorrow, 7 April 2015, as Governor Raghuram Rajan waits to see how RBI's recent rate cuts percolate through the country's financial system. The RBI had surprised financial markets by announcing reduction in repo rate by 25 basis points to 7.5% in an unscheduled monetary policy review on 4 March 2015. Earlier, the RBI had on 15 January 2015 announced a cut in the repo rate by 25 basis points to 7.75%. Despite a cumulative rate cut of 50 basis points from the RBI, most commercial banks have refrained from cutting their lending rates.
The government after trading hours on Wednesday, 1 April 2015, in its five-year Foreign Trade Policy 2015-20 (FTP 2015-20) announced the launch of a new Merchandise Exports from India Scheme (MEIS) for export of specified goods to specified markets. For grant of rewards under MEIS, the countries have been categorized into 3 groups whereas the rates of rewards under MEIS range from 2% to 5%. MEIS has replaced 5 different schemes of earlier Foreign Trade Policy. Under the FTP 2015-20, Served from India Scheme (SFIS) has been replaced with Service Exports from India Scheme (SEIS) for increasing exports of notified services from India. Under SEIS, the selected services would be rewarded at the rates of 3% and 5%.
Growth in India's services sector moderated last month, the outcome of a survey showed today, 6 April 2015. The seasonally adjusted HSBC India Services Business Activity Index dropped to 53 in March 2015 from 53.9 in February 2015. The latest reading was indicative of a moderate rate of expansion that was slightly weaker than in the prior month. Anecdotal evidence highlighted sustained new business growth. Output rose in four of the six broad areas of the service economy, the exceptions being Financial Intermediation and Hotels & Restaurants. Service providers remain upbeat towards the prospects for business activity over the next 12 months. Over 25% of survey members anticipate output growth over the course of the next year, citing strengthening demand conditions.
Manufacturing activity in India witnessed an overall improvement last month, the outcome of a survey showed on Thursday, 2 April 2015. The headline HSBC India Purchasing Managers' Index (PMI) nudged higher at 52.1 in March 2015 from 51.2 in February 2015. Underpinning the expansion in output was a quicker rise in new order flows. There was a marked increase in input costs for manufacturing companies which has resulted in firms raising their tariffs once again. Markit economist Pollyanna De Lima said that greater cost burdens add to the pressure on margins which could potentially be squeezed by competitive pressures. Faster increases in incoming new work, buying levels and backlogs at manufacturing firms indicate that the subdued labour market is likely to recover in coming months, according to the survey.
Meanwhile, the government reportedly re-promulgated the land acquisition ordinance on Friday, 3 April 2015, after President Pranab Mukherjee gave his assent for the same. The ordinance will now be presented in both houses of parliament again. The ordinance includes nine amendments made when a bill to replace it was passed in the Lok Sabha last month. The second half of the Budget session of the parliaments begins on 20 April 2015 and concludes on 8 May 2015.
In overseas markets, European stock markets were closed today, 6 April 2015, for Easter holiday.
In Greece, Greek Finance Minister Yanis Varoufakis reportedly said yesterday, 5 April 2015, after holding bilateral talks with International Monetary Fund Managing (IMF) Director Christine Lagarde that Greece intends to meet all obligations to all its creditors. His comments come as Greece has to make a roughly 450 million euro loan repayment to the IMF on Thursday, 9 April 2015. Varoufakis held informal talks on the Greek government's reform program with Lagarde. The IMF MD said that due diligence efforts in Athens and talks with teams in Brussels over the terms of Greece's bailout would resume promptly on Monday, 6 April 2015.
Asian markets were mixed today, 6 April 2015. Key indices in Indonesia and South Korea rose by 0.05% to 0.45%. Key indices in Singapore and Japan fell by 0.01% to 0.19%. Chinese stock markets remain closed today, 6 April 2015. Markets in Australia and Hong Kong remain closed for Easter today, 6 April 2015. Hong Kong will also be closed tomorrow, 7 April 2015, for Ching Ming Festival.
In China, data on Friday, 3 April 2015, showed that a gauge of service sector activity, the HSBC China Services Purchasing Managers' Index, came in stronger at 52.3 in March 2015 from 52 in February 2015.
US stock index futures fell after worse-than-expected US jobs data for March 2015 which was announced on Friday, 3 April 2015, when US stock market was closed on account of Good Friday. Trading in US index futures indicates that the Dow Jones industrial average could slide 140.50 points at the opening bell today, 6 April 2015.
US employers added the fewest number of jobs in more than a year in March, the latest sign of weakness in the economy and one likely to further delay an anticipated interest rate increase by the Federal Reserve nonfarm payrolls rose 126,000 last month, less than half February's pace and the smallest gain since December 2013, the Labor Department said on Friday, 3 April 2015. Average hourly wages rose 0.3% in March, but was offset by a drop in hours worked in the month. Nearly all sectors of the economy saw the pace of hiring slow in the month.
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