A bout of volatility was witnessed as the barometer index, the S&P BSE Sensex and the Nifty 50 index trimmed losses after both these indices hit their lowest level in more than three weeks. At 10:15 IST, Sensex was down 60.45 points or 0.24% at 25,169.25. The decline for the Nifty 50 index was lower than the Sensex's fall in percentage terms. The Nifty was currently down 9.40 points or 0.12% at 7,737.60.
The Sensex hit its lowest level in more than three weeks when it lost 125.31 points or 0.49% at the day's low of 25,104.39 in morning trade. The barometer index lost 18.83 points or 0.07% at the day's high of 25,210.87 in opening trade. The Nifty, too, hit its lowest level in more than three weeks when it lost 35.10 points or 0.45% at the day's low of 7,711.90 in morning trade. The index lost 8.80 points or 0.11% at the day's high of 7,738.20 at the onset of trading session.
In overseas stock markets, Asian stocks edged lower amid renewed global growth concerns in the wake of weaker-than-expected Chinese manufacturing data. The Caixin China general manufacturing purchasing managers' index fell to 49.4 in April 2016 from 49.7 in March 2016. A reading below 50 indicates economic contraction. The data was released during trading hours in Asia yesterday, 3 May 2016. China's official manufacturing PMI, a competing gauge, came in at 50.1 in April 2016 compared with 50.2 in March 2016, according to data released by the National Bureau of Statistics on 1 May 2016. The Chinese economy is the world's second biggest economy after the United States.
A surprise interest-rate cut by Australia's central bank has added to global economic jitters. The Reserve Bank of Australia yesterday, 3 May 2016, cut its benchmark interest rate by 25 basis points to record low of 1.75% in a bid to combat record-low inflation and a strong local currency. The decision was announced during trading hours in Asia. US stocks closed lower yesterday, 3 May 2016, led by declines in energy and materials stocks amid renewed global growth worries. Cleveland Fed President Loretta Mester yesterday, 3 May 2016, said in a speech that waiting for global financial markets to calm down before raising interest rates may backfire and just lead to more volatility. Mester said she would like to see gradual interest-rate hikes this year. Mester is a voting member of the policy-setting Federal Open Market Committee this year.
Closer home, the market breadth indicating the overall health of the market was weak. On BSE, 1,053 shares declined and 665 shares rose. A total of 86 shares were unchanged. The BSE Mid-Cap index was currently down 0.16%. The BSE Small-Cap index was currently down 0.17%. The losses for both these indices were lower than the Sensex's decline in percentage terms.
Metal and mining stocks edged lower as copper prices declined in global commodities markets. Hindalco Industries (down 3.2%), National Aluminium Company (down 2.24%), Vedanta (down 2.95%), JSW Steel (down 1.77%), Steel Authority of India (down 1.74%), Hindustan Zinc (down 1.24%), Hindustan Copper (down 0.28%) and NMDC (down 0.62%) edged lower.
High Grade Copper for July 2016 delivery was currently down 0.23% at $2.214 per pound on the COMEX.
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Tata Steel lost 2.24% at Rs 340.65. Global metals group Liberty House Group yesterday, 3 May 2016, formally submitted a letter of intent to Tata Steel Europe containing its indicative bid for the entire issued share capital of Tata Steel UK. Liberty has put in the bid for all of Tata Steel's UK assets, excluding its Long Products division, which is in the process of being sold separately, and the Scottish Plate Assets that Liberty already acquired from Tata Steel. Tata Steel has put Tata Steel, UK on the block due to the deteriorating financial performance of the UK subsidiary.
The bid is based on Liberty's GREENSTEEL business model and would involve a transition from steelmaking in blast furnaces to recycling steel in electric arc furnaces over time while ensuring the company continues to meet key customers' quality requirements. Steelmaking would be ultimately powered by renewable energy sources. Liberty said in a statement that it believes that the UK steel industry can achieve long-term viability if based on an agile, sustainable, non-cyclical model which integrates liquid steel making from recycling with downstream production and the manufacture of advanced engineering products.
In order to take the bid forward Liberty has appointed an internal project team and a panel of leading external advisers to work on this acquisition, dubbed "Project GREENSTEEL Pluto".
Jindal Steel & Power (JSPL) was off 0.43%. The stock hit a high of Rs 71.45 and a low of Rs 68.60 so far during the day. The company's board of directors at its meeting held yesterday, 3 May 2016, approved the divestment of 1,000 megawatts (MW) power plant unit in Chhattisgarh of its power subsidiary Jindal Power (JPL) into a special purpose vehicle (SPV), for purposes of transferring the unit to JSW Energy through sale of the entire share capital and other securities of the unit in terms of the share purchase agreement for an enterprise value of Rs 6500 crore plus the value of net current assets as on the closing date. The valuation may vary based upon the achievement of power purchase agreements (PPAs) as prescribed in the agreement subject to minimum of Rs 4000 crore plus the value of net current assets as on the closing date, JSPL said in a statement. The announcement was made before market hours today, 4 May 2016. Shares of JSW Energy were down 0.3% at Rs 66.40.
Cement stocks declined. UltraTech Cement (down 1.11%), Ambuja Cements (down 0.8%) and ACC (down 0.66%) edged lower. Shares of Shree Cement were flat at Rs 12,399.35.
Grasim Industries was down 0.71%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
Adani Ports and Special Economic Zone (APSEZ) tumbled 10.13% at Rs 212 on equity dilution worries after the company's board sought shareholders' approval to raise funds by issue of equity shares/convertible bonds up to Rs 10000 crore. The board has also decided to seek shareholders' approval to issue secured/unsecured redeemable non-convertible debentures on private placement basis within the overall borrowing limits of the company.
APSEZ's consolidated net profit rose 38.34% to Rs 914.06 crore on 18% increase in total income to Rs 2161.65 crore in Q4 March 2016 over Q4 March 2015. EBITDA (earnings before interest, taxes, depreciation and amortization) excluding other income rose 12% to Rs 1225 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 3 May 2016.
Cargo across all ports handled by the company rose 5% to 152 million metric tonnes (MMT) in the year ended 31 March 2016 over the year ended 31 March 2015. The company has given guidance of 10% to 15% growth in cargo volumes for the year ending 31 March 2017 (FY 2017). It has given guidance of 10% to 15% growth in net profit for FY 2017.
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