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Metal stocks nudge higher as growth in China's services sector accelerates

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Last Updated : Apr 06 2016 | 12:01 PM IST

Key benchmark indices hovered near the flat line in mid-morning trade. At 11:15 IST, the barometer index, the S&P BSE Sensex was down 5.51 points or 0.02% at 24,878.08. The Nifty 50 index was currently up 3.05 points or 0.04% at 7,606.25. The Sensex failed to retain the psychologically important 25,000 level which it had crossed at the onset of trading session. The market breadth indicating the overall health of the market was strong. On BSE, 1,223 shares rose and 769 shares fell. A total of 105 shares were unchanged. The BSE Mid-Cap index was currently off 0.19%. The decline in this index was higher than Sensex's decline in percentage terms. The BSE Small-Cap index was currently up 0.34%, outperforming the Sensex.

Meanwhile, the outcome of a monthly survey showed that growth in India's services sector accelerated last month on the back of a marked and accelerated increase in new business. On the flip slide, the latest data indicated that businesses still operated below capacity, as backlogs declined at the quickest rate in seven years. The seasonally adjusted Nikkei India Services purchasing managers' index (PMI) edged higher to 54.3 in March from 51.4 in February. Sub-sector data indicated that the services sector activity rose in five out six categories, with the sole exception being Transport & Storage. Services input costs and output charges rose at relatively weak rates. Indian services companies remained optimistic that activity will increase further over the coming 12 months. The level of confidence was at a nine-month high, with positivity linked to favourable government policies and forecasts of a pick-up in demand.

In overseas stock markets, Asian stocks witnessed a mixed trend. US stocks closed lower yesterday, 5 April 2016, on concerns about the upcoming corporate results and slowdown in global growth.

Metal and mining stocks edged higher after the outcome of a monthly survey showed acceleration in growth in China's services sector last month. Hindalco Industries (up 3.71%), Tata Steel (up 2.88%), Jindal Steel & Power (up 2.08%), NMDC (up 2.3%), Vedanta (up 1.92%), JSW Steel (up 1.38%), National Aluminium Company (up 1.05%), Steel Authority of India (up 0.59%) and Hindustan Copper (up 0.3%) edged higher. China is the world's largest consumer of steel, copper and aluminum.

The Caixin China services purchasing managers' index rose to 52.2 in March from 51.2 in February. China's official nonmanufacturing PMI, a competing gauge, also showed faster growth in March, according to data released last week.

Meanwhile, copper edged higher in the global commodities markets. High Grade Copper for May 2016 delivery was currently up 0.56% at $2.15 per pound on the COMEX.

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Hindustan Zinc dropped 13.55% at Rs 161.70 on turning ex-dividend for special dividend of Rs 24 per share for the year ended 31 March 2016. Before turning ex-dividend, the stock offered a dividend yield of 12.83% based on the stock's closing price of Rs 187.05 on the BSE yesterday, 5 April 2016. It may be recalled that the board of directors of the company at a meeting held on 30 March 2016, had declared a special golden jubilee dividend of Rs 24 per share for the financial year ended 31 March 2016.

Aviation stocks edged higher on media reports that the civil aviation ministry is likely to abolish the 5/20 rule which restricts companies from flying abroad unless they have flown in India for five years and have a fleet size of 20 aircraft. SpiceJet (up 2.04%), Jet Airways (India) (up 2.33%) and InterGlobe Aviation (up 0.43%) rose.

GM Breweries was up 2.8% at Rs 1,055 after net profit jumped 204.54% to Rs 17.42 crore on 17.71% growth in total income to Rs 91.72 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 5 April 2016. GM Breweries' board of directors at its meeting held yesterday, 5 April 2016, recommended a 1:4 bonus issue of shares.

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First Published: Apr 06 2016 | 11:15 AM IST

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