Key benchmark indices hovered in a narrow range in positive zone in afternoon trade. At 13:18 IST, the barometer index, the S&P BSE Sensex was up 40.03 points or 0.15% at 27,049.70. The gains for the Sensex were higher in percentage terms than those for the Nifty 50 index. The Nifty was currently up 6.55 points or 0.08% at 8,273.
Meanwhile, the India Meteorological Department (IMD) today, 8 June 2016, announced the arrival of the monsoon rains in Kerala. That marks the beginning of the 4-month June-September southwest monsoon season in the country. IMD has forecast above normal rains for the 2016 southwest monsoon season. Quantitatively, monsoon season rainfall for the country as a whole is likely to be 106% of the long period average (LPA) with a model error of plus/minus 4%. The quantum of the rainfall and its spatial and temporal distribution are critical for the country's agriculture.
In overseas markets, European market edged lower in early trade today, 8 June 2016, retreating after two straight days of gains, as a drop in Austrian bank Erste knocked back financial stocks. Asian stocks were mixed as weak Chinese export data offset a brightening energy sector outlook and an expected delay in interest rate hikes by the US Federal Reserve. Data showed that China's exports fell more than expected in May as global demand remained stubbornly weak, but imports beat forecasts, adding to hopes that the economy may be stabilising. In dollar terms, China's exports fell 4.1% and imports dropped 0.4% from a year earlier.
Separately, China's central bank People's Bank of China said it was keeping its economic growth forecast for 2016 year steady at 6.8% but it now expects exports to contract and fixed asset investment to grow more strongly than previously forecast. Meanwhile, Japan's economy grew faster than initially estimated in the first quarter. Japan's economy expanded at an annualized 1.9% rate in the first quarter of this year, revised up from a preliminary reading of 1.7% growth.
US stocks eked out modest gains yesterday, 7 June 2016, propelled by a sharp rally in the energy sector.
Closer home, the market breadth indicating the overall health of the market was strong. On BSE, 1,454 shares rose and 948 shares declined. A total of 142 shares were unchanged. The BSE Mid-Cap index was currently up 0.29%. The BSE Small-Cap index was currently up 0.83%. Both these indices outperformed the Sensex.
Metal shares were mixed after the release of Chinese trade data for May. Jindal Steel & Power (up 4.99%), Bhushan Steel (up 4.97%), Hindustan Copper (up 1.39%), Vedanta (up 0.86%), JSW Steel (up 0.68%) and Steel Authority of India (up 0.24%), edged higher. National Aluminium Company (down 0.36%), Hindalco Industries (down 0.37%), Tata Steel (down 0.42%), Hindustan Zinc (down 0.61%) and NMDC (down 1.09%), edged lower.
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Meanwhile, copper price edged higher in the global commodities markets. High Grade Copper for July 2016 delivery was currently up 0.34% at $2.058 per pound on the COMEX.
FMCG stocks were mixed. Bajaj Corp (up 2.77%), Colgate Palmolive (India) (up 0.62%), Hindustan Unilever (up 0.44%), Dabur India (up 0.26%), Marico (up 0.20%), Procter & Gamble Hygiene & Health Care (up 0.18%) and Tata Global Beverages (up 0.04%), edged higher. Nestle India (down 0.14%), GlaxoSmithKline Consumer Healthcare (down 0.54%), Godrej Consumer Products (down 0.54%), Britannia Industries (down 0.84%) and Jyothy Laboratories (down 0.98%), edged lower.
Defense sector stocks rose after an India-US joint statement during official visit of Prime Minister Narendra Modi to the US said that the leaders of the two countries decided to expand bilateral defense cooperation. Reliance Defence and Engineering (up 11.42%), Punj Lloyd (up 11.2%), Astra Microwave Products (up 8.38%), Bharat Electronics (up 5.05%), Zen Technologies (up 4.13%), Bharat Forge (up 2.1%), Tata Power Company (up 0.61%) and Dynamatic Technologies (up 0.66%) edged higher.
In a bilateral summit, Modi and US President Barack Obama have expressed their desire to explore agreements which would facilitate further expansion of bilateral defense cooperation in practical ways. In this regard, the leaders have welcomed the finalization of the text of the Logistics Exchange Memorandum of Agreement (LEMOA). The United States has recognized India as a major defense partner. The United States will continue to work toward facilitating technology sharing with India to a level commensurate with that of its closest allies and partners, the joint statement said.
The leaders reached an understanding under which India would receive license-free access to a wide range of dual-use technologies in conjunction with steps that India has committed to take to advance its export control objectives. In support of India's 'Make In India' initiative and to support the development of robust defense industries and their integration into the global supply chain, the United States will continue to facilitate the export of goods and technologies, consistent with US law, for projects, programs and joint ventures in support of official US-India defense cooperation. The leaders also committed to enhance cooperation in support of the Government of India's Make in India initiative and expand the co-production and co-development of technologies under the Defense Technology and Trade Initiative (DTTI).
L&T was up 0.71% after the company announced that its construction arm along with its joint venture (JV) partner in Qatar, Al Balagh Trading & Contracting, has signed a contract to build a 40,000 seater stadium in Qatar for the 2022 Fifa World Cup. The contract for the project is for a combined value of $360 million and is slated to be completed by 2019. The scope for the stadium includes main works and construction of the site, following completion of the enabling works, L&T said in a statement. The announcement was made after market hours yesterday, 7 June 2016
MOIL fell 1.38% to Rs 239.75 as the buyback price of Rs 248 per share was close to the ruling market price. The stock had risen in the run up to the announcement of the details of the share buyback. The scrip had gained 9.97% in four trading sessions to settle at Rs 243.10 yesterday, 7 June 2016, from its close of Rs 221.05 on 1 June 2016.
The buyback price of Rs 248 per share represents a premium of 2.01% to the the stock's closing price of Rs 243.10 yesterday, 7 June 2016. The company announced the buyback price before market hours today, 8 June 2016. MOIL has announced buyback of 3.48 crore equity shares, representing 20.72% of the total number of equity shares in the paid-up share capital of the company at Rs 248 per share for an aggregate consideration not exceeding Rs 863.34 crore. The buyback will be through the tender offer route.
The promoter of the company intends to participate in the proposed buyback. The central government and the Maharashtra and Madhya Pradesh state governments are the promoters of MOIL. The central government currently holds 71.57% stake, the Maharashtra state government holds 4.62% and the Madhya Pradesh state government owns 3.81% stake in MOIL (as per the shareholding pattern as on 31 March 2016).
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