Key benchmark indices cut losses in afternoon trade. At 13:25 IST, the barometer index, the S&P BSE Sensex was down 40.79 points or 0.15% at 27,786.74. The Nifty 50 index was down 10.45 points or 0.12% at 8,580.80. Fall in domestic bourses triggered by weakness in global stocks was capped by overnight data showing huge buying of equity shares by foreign portfolio investors and domestic institutional investors. Earlier, key indices hovered within a narrow range near the flat line. The buying was witnessed in select mid-cap and small-cap stocks.
Closer home, foreign portfolio investors (FPIs) bought shares worth a net Rs 3413.37 crore yesterday, 29 September 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1630.88 crore yesterday, 29 September 2016, as per provisional data.
The broad market depicted strength. There were more than two gainers against every loser on BSE. 1,689 shares rose and 775 shares fell. A total of 180 shares were unchanged. The BSE Mid-Cap index was currently up 1.12%. The BSE Small-Cap index was currently up 1.1%. Both these indices outperformed the Sensex.
In overseas stock markets, European stocks were sharply lower in early trade as concerns over the systemic risk posed by German banks weighed on investor sentiment. Asian stocks fell tracking lower finish for US stocks yesterday, 29 September 2016 as Deutsche Bank shares slumped to a record low after a report that trading clients had withdrawn excess cash and positions held in the largest German lender. The cause of Deutsche's crisis is a fine, disputed by Deutsche, of up to $14 billion by the US Department of Justice over its sale of mortgage-backed securities.
Meanwhile, revised data suggest that the US economy's performance in the spring was slightly better than expected, as business investment wasn't nearly as weak as previously reported. The gross domestic product grew a 1.4% pace in the second quarter. Philadelphia Federal Reserve President Patrick Harker said he backs a December rate increase if the economy continues to grow as expected, while Atlanta Fed President Dennis Lockhart said he expects the Fed to be in a position to raise rates soon. Fed Gov. Jerome Powell on the other hand said the Fed can afford to be patient in gradually raising rates as the economy slowly improves.
IT stocks saw mixed trend. Infosys (up 1.17%), Wipro (up 1.3%), Oracle Financial Services Software (up 0.41%), Tech Mahindra (up 0.39%) rose. TCS (down 0.28%), MindTree (down 0.36%), Hexaware Technologies (down 0.29%) and MphasiS (down 0.51%) fell.
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HCL Technologies rose 0.76% after the company and IBM entered a 15-year partnership for automation and development & operations (DevOps) solutions. The announcement was made after market hours yesterday, 29 September 2016.
Firstsource Solutions rose 3.16% after the company said its subsidiary made repayment of debt. Firstsource Solutions said that Firstsource Group USA, Inc, a wholly-owned subsidiary of the company, has successfully made its sixth quarterly repayment of $11.25 million on its outstanding debt on 30 September 2016. With this, the company's subsidiary repaid $67.50 million of debt so far since 30 June 2015. The announcement was made during trading hours today, 30 September 2016.
Most metal and mining stocks rose. JSW Steel (up 1.43%), Steel Authority of India (Sail) (up 1.22%), Hindustan Zinc (up 2.66%), Jindal Steel & Power (up 0.67%), Hindalco Industries (up 0.6%), NMDC (up 1.22%) rose.
Hindustan Copper (down 2.33%), National Aluminium Company (down 1.1%), Vedanta (down 0.48%) and Tata Steel (down 0.05%) fell.
Copper edged lower in the global commodities market. High Grade Copper for December 2016 delivery was currently off 0.37% at $2.182 per pound on the COMEX.
Meanwhile, the Reserve Bank of India Act, 1934 (RBI Act) has been amended by the Finance Act, 2016, to provide for a statutory and institutionalized framework for a Monetary Policy Committee, for maintaining price stability, while keeping in mind the objective of growth and notified yesterday, 29 September 2016. The Monetary Policy Committee would be entrusted with the task of fixing the benchmark policy rate (repo rate) required to contain inflation within the specified target level. A Committee-based approach for determining the Monetary Policy will add lot of value and transparency to monetary policy decisions. The meetings of the Monetary Policy Committee shall be held at least 4 times a year and it shall publish its decisions after each such meeting. The factors constituting failure to meet inflation target under the Monetary Policy Committee Framework have also been notified. The Government, in consultation with RBI, has notified the inflation target in the Gazette of India Extraordinary dated 5 August 2016 for the period beginning from the date of publication of this notification and ending on the 31 March 2021, with inflation target of 4% with upper and lower tolerance level of 2%.
As per the provisions of the RBI Act, out of the six members of Monetary Policy Committee, three members will be from the RBI and the other three members of MPC will be appointed by the Central Government. The members of the Monetary Policy Committee appointed by the Central Government shall hold office for a period of four years, with immediate effect or until further orders, whichever is earlier.
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