Key benchmark indices slipped into the red and hit fresh intraday low in early afternoon trade. Losses were small. At 12:19 IST, the barometer index, the S&P BSE Sensex was down 37.81 points or 0.14% at 26,805.22. The Nifty 50 index was currently down 7.90 points or 0.1% at 8,212.90. Key indices hovered within a narrow range around the flat line so far during the trading session.
In overseas markets, most Asian stocks rose today, 6 June 2016 after US nonfarm payrolls data showed the slowest job growth in more than five years, quashing expectations for a near-term US interest rate hike by the US Federal Reserve. Fed rate hike is expected to drain liquidity from global emerging markets and redirect it to developed economies. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets.
US stocks fell on Friday, 3 June 2016 after data showed that US employers in May added the fewest jobs in more than five years. The Labor Department said on Friday, 3 June 2016 that nonfarm payrolls rose by 38,000 in May, the weakest performance since September 2010. Federal Reserve Governor Lael Brainard on Friday, 3 June 2016 called for the central bank to wait for more data before lifting interest rates as she said the jobs report shows the labor market has slowed. The Federal Open Market Committee next undertakes monetary policy review on 14-15 June 2016. The US central bank had lifted rates in December 2015 for the first time in nearly a decade.
Closer home, the market breadth indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,196 shares fell and 1,107 shares rose. A total of 113 shares were unchanged. The BSE Mid-Cap index was currently down 0.03%. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index was currently up 0.16%, outperforming the Sensex.
Most auto stocks declined ahead of Reserve Bank of India's monetary policy review scheduled tomorrow, 7 June 2016. Ashok Leyland (down 1.03%), Hero MotoCorp (down 0.36%), Bajaj Auto (down 0.29%) and TVS Motor Company (down 0.37%) declined. Eicher Motors rose 1.08%. Purchases of cars, utility vehicles and commercial vehicles are largely driven by finance.
Mahindra & Mahindra (M&M) rose 1.59% after India's weather department the India Meteorological Department (IMD) said in its report today, 6 June 2016 that conditions continue to remain favorable for onset of the southwest monsoon over Kerala during next 2-3 days. Good rains boost demand for company's tractor vehicles.
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Maruti Suzuki India (MSIL) dropped as Japanese yen strengthened against the dollar. The stock fell 2.1%. A strong yen adversely impacts Maruti's operating profit margin. Maruti pays royalty to its Japanese parent Suzuki Motor Corporation in yen terms for some of its earlier models. Maruti will reportedly start paying royalty to its Japanese parent in rupee terms on all new models from the current financial year, which began on 1 April 2016. Maruti also has an exposure to the yen to the extent it imports raw materials from Japan.
Meanwhile, Maruti after market hours on Friday, 3 June 2016 reported a 1.57% growth in its total production at 1.29 lakh units in May 2016 over May 2015.
IT stocks were mixed. Tech Mahindra (down 1.35%), TCS (down 0.37%), and Wipro (down 0.47%) declined. HCL Technologies (up 0.08%) and Infosys (up 0.09%) gained.
Lupin declined 0.28%. Lupin announced that its US subsidiary, Gavis Pharmaceuticals LLC., has received final approvals for its Voriconazole Tablets, 50 mg & 200 mg and Voriconazole Oral Suspension, 40 mg/mL from the United States Food and Drug Administration (FDA), Voriconazole Tablets, 50 mg & 200 mg and Voriconazole Oral Suspension, 40 mg/mL are the AB rated generic equivalent of PF Prism C.V's Vfend Tablets, 50 mg & 200 mg and Vfend Oral Suspension, 40 mg/mL. Lupin shall commence promoting the products in the US shortly. It is indicated for use in patients 12 years of age and older in the treatment of some fungal infections. Vfend Tablets, 50mg & 200mg had annual US sales of $92.8 million as per IMS MAT March 2016 data while Vfend Oral Suspension, 40 mg/mL had annual US sales of $15.9 million as per IMS MAT March 2016 data. The announcement was made during market hours today, 6 June 2016.
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