Key benchmark indices saw divergent trend in mid-afternoon trade, with the barometer index, the S&P BSE Sensex, trading with minuscule gains and the Nifty 50 index hovering a tad below the flat line. At 14:18 IST, the Sensex was up 11.73 points or 0.04% at 27,819.87. The Nifty was currently down 2.65 points or 0.03% at 8,518.40. The movement for the two key benchmark indices was confined to a narrow range.
The market breadth indicating the overall health of the market was weak. On BSE, 1,710 shares fell and 932 shares rose. A total of 150 shares were unchanged. The BSE Mid-Cap index was currently off 0.56%. The BSE Small-Cap index was currently off 0.66%. Both these indices underperformed the Sensex.
In overseas stock markets, benchmark indices in Germany, France, UK, and Spain alternately swung between positive and negative zone. In the UK, the FTSE 100 index was currently off 0.06%. Britain's interior minister Theresa May is set to take over as the country's prime minister today, 13 July 2016, evening avoiding months of uncertainty in the wake of the Brexit vote.
Asian stocks rose, adding to the gains in the past few sessions amid improved risk appetite following the positive lead overnight from Wall Street. Japanese shares extended strong gains registered early this week after Japan's Chief Cabinet Secretary Yoshihide Suga said that the government is planning to introduce a comprehensive and bold economic stimulus. The Nikkei 225 Average ended 0.84% higher. The Nikkei surged early this week after Prime Minister Shinzo Abe's ruling-coalition victory in the upper-house election stoked speculation of more fiscal stimulus. Meanwhile, Suga today, 13 July 2016, denied a local media report that said aides to Prime Minister Abe are considering the so-called helicopter money that involves a central bank directly buying government bonds to finance government spending or tax cuts as a possible policy measure.
US stocks edged higher yesterday, 12 July 2016, with Dow Jones Industrial Average and the S&P 500 index, both, finishing at record high, reflecting hopes about stimulus from Japan and China along with optimism that the Bank of England will lower rates to help the UK economy sidestep the pitfalls of the so-called Brexit.
Bank stocks fell. Among private bank stocks, HDFC Bank (down 0.3%), Federal Bank (down 1.6%), Axis Bank (down 0.62%), IndusInd Bank (down 1.21%) and Yes Bank (down 0.75%) declined. Kotak Mahindra Bank (up 1.06%) and ICICI Bank (up 0.31%) rose.
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Among PSU bank stocks, Corporation Bank (down 2.27%), Andhra Bank (down 2.24%), Syndicate Bank (down 2.07%), Punjab National Bank (down 0.44%), Bank of Baroda (down 0.06%), Canara Bank (down 0.21%), IDBI Bank (down 1.78%), Bank of India (down 1.58%) and Union Bank of India (down 1.63%) dropped. State Bank of India (SBI) rose 0.4%.
Andhra Bank fell 2.48% to Rs 60.95 as the stock turned ex-dividend today, 13 July 2016 for dividend of Rs 0.50 per share for the year ended 31 March 2016 (FY 2016). Before turning ex-dividend, the stock offered a dividend yield of 0.8% based on its closing price of Rs 62.50 on the BSE yesterday, 12 July 2016.
ONGC and Oil India rose on reports the government has approved 25 paise per litre hike in kerosene prices per month till April 2017. ONGC was up 4.04%. The stock price of Oil India was up 2.23%. According to reports, the government has asked state-owned oil marketing companies (OMCs) -- Indian Oil Corporation (IOC), HPCL and BPCL -- to raise the price of subsidised kerosene by 25 paise per litre till April 2017 to bring it closer to the market-determined price. The first hike in prices of 25 paise a litre took place on 1 July 2016. The decision to hike kerosene prices would benefit OMCs as well as upstream companies such as ONGC and Oil India as kerosene and LPG are sold well below their cost of production. Media reports suggest that currently, under-recoveries on kerosene and LPG are Rs 13.10 a litre and Rs 116 per cylinder, respectively. The government gives a subsidy of Rs 12 per litre on kerosene while the balance is borne by upstream petroleum companies such as Oil India and ONGC. Among OMCs, IOC, with more than 67% market share, will gain the most.
In the past two fiscals, the government incurred under-recoveries of Rs 24799 crore and Rs 11496 crore on kerosene, reports suggested.
Stocks of OMCs saw mixed trend. HPCL dropped 1.37%. Shares of BPCL fell 2.33% to Rs 547. Indian Oil Corporation rose 0.41%.
Pharma shares saw mixed trend. Cadila Healthcare (down 1.68%), Dr Reddy's Laboratories (down 0.21%), Lupin (down 0.48%), Sun Pharmaceutical Industries (down 0.36%), Aurobindo Pharma (down 0.53%) and Wockhardt (down 0.55%) fell. Cipla (up 0.46%), Divi's Laboratories (up 0.32%), Glenmark Pharmaceuticals (up 0.33%), Alkem Laboratories (up 0.67%), GlaxoSmithKline Pharmaceuticals (up 0.26%) rose.
RPP Infra Projects rose 5.48% after the company said that its wholly-owned subsidiary situated in Sri Lanka bagged order worth $10.36 million from High Commission of India. The order involves construction and completion of a cultural centre at Jaffna. Jaffna is the capital city of the Northern Province of Sri Lanka. The announcement was made during trading hours today, 13 July 2016.
On the macro front, data released by government after market hours yesterday, 12 July 2016, showed that India's industrial production increased 1.2% in May 2016 over May 2015, while snapping 1.35% dip recorded in the previous month. The manufacturing sector production rebounded 0.7%, after two months of decline, contributing to the rise in industrial output in May 2016.
Another data released by government after market hours yesterday, 12 July 2016, showed that inflation based on the consumer price index (CPI) accelerated to 5.77% in June 2016 from 5.76% in May 2016. Increase in food prices was responsible for the acceleration in consumer price inflation. The consumer food price index rose to 7.79% in June 2016 from 7.47% in May 2016. The core CPI inflation fell to 4.39% in June 2016 from 4.49% in May 2016.
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