Weakness persisted on the bourses as the key benchmark indices were trading with modest losses in mid-afternoon trade. At 14:20 IST, the S&P BSE Sensex was down 86.94 points or 0.31% at 28,247.61. The Nifty 50 index was currently down 18.65 points or 0.21% at 8,750.50. Weakness in global stocks weighed on sentiment.
Key indices were trading in red since morning trade after hitting over one-week high at onset of the day's trading session after the International Monetary Fund (IMF) raised India's growth forecast slightly. The Sensex rose 143.10 points or 0.51% at the day's high of 28,477.65 at onset of the day's trading session, its highest level since 26 September 2016. The barometer index lost 125.36 points or 0.44% at the day's low of 28,209.19 in afternoon trade, its lowest level since 3 October 2016. The Nifty rose 37.80 points or 0.43% at the day's high of 8,806.95 at onset of the day's trading session, its highest level since 26 September 2016. The index lost 37.75 points or 0.43% at the day's low of 8,731.40 in afternoon trade.
Meanwhile, the International Monetary Fund (IMF) has raised India's growth forecast a tad, citing the resilience of its economy and robust growth momentum. The IMF now expects the economy to expand 7.6% in 2016-17, up from its earlier projection of 7.4%.
Closer home, the market breadth indicating the overall health of the market was strong. On BSE, 1,678 shares gained and 1,071 shares fell. A total of 125 shares were unchanged. The BSE Mid-Cap index was up 0.31%. The BSE Small-Cap index was up 0.59%. Both these indices outperformed the Sensex.
Private bank stocks fell. HDFC Bank (down 0.59%), Kotak Mahindra Bank (down 0.83%), Federal Bank (down 0.61%), RBL Bank (down 0.07%), ICICI Bank (down 0.52%), Axis Bank (down 1.55%) declined. IndusInd Bank rose 0.09%.
Yes Bank rose 0.4% after the bank announced after market hours yesterday, 4 October 2016 that it has successfully raised Rs 2135 crore through senior long term infrastructure bonds. The issue was closed on 30 September 2016 and witnessed strong demand from leading domestic investors resulting in a total subscription of the issue. The issue was subscribed 2.13 times. The bonds will be listed on BSE and were raised at a coupon rate of 8% per annum with a tenor of 10 years. The proceeds will be used to finance long term projects in infrastructure and its allied sub-sectors.
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PSU bank stocks rose. State Bank of India (SBI) (up 1.33%), Andhra Bank (up 1.02%), Punjab National Bank (up 0.31%), Bank of Baroda (up 1.35%), Canara Bank (up 2.41%), Bank of India (up 1.47%) and Union Bank of India (up 1.42%) rose. IDBI Bank shed 0.21%.
UCO Bank rose 0.96% after the bank said its board is considering a proposal for issue of 7.17 crore equity shares on preferential basis to Life Insurance Corporation of India. The proposal for fund raising is placed before the board for approval by circulation. The issue price for preferential allotment will be determined later. The announcement was made after market hours yesterday, 4 October 2016.
Pharma stocks declined. Strides Shasun (down 1.32%), Cipla (down 0.11%), Dr Reddy's Laboratories (down 0.8%), Glenmark Pharmaceuticals (down 0.28%), Sun Pharmaceutical Industries (down 0.16%), Alkem Laboratories (down 0.8%), GlaxoSmithKline Pharmaceuticals (down 0.06%), Aurobindo Pharma (down 0.35%) and Wockhardt (down 0.58%) fell. Lupin (up 0.38%) and Cadila Healthcare (up 0.54%) rose.
Indo Count Industries rose 3.23% after the company said CARE has upgraded its credit rating on the company's long term bank facilities to CARE AA and short term bank facilities to CARE A1+. This upgradation in the long term bank facilities (term loan) and short term bank facilities (fund & non-fund based bank facilities) ratings reflects the company's consistent cash accruals generated in the business and its strengthened leading position in the niche home textiles segment which has led to a healthy debt coverage metrics and liquidity position for the company, CARE said. The announcement was made after market hours yesterday, 4 October 2016.
Tourism Finance Corporation of India rose 10.96% to Rs 68.35 after data showed Insync Capital Partners bought 0.53% stake in the company via bulk deal on NSE yesterday, 4 October 2016. Data showed Insync Capital Partners bought 4.25 lakh shares, or 0.53% stake, in Tourism Finance Corporation of India at an average price of Rs 56.22 on NSE yesterday, 4 October 2016. Insync Capital Partners has ace investor Rakesh Jhunjhunwala and his wife Rekha among its designated partners.
On macro front, data showed today, 5 October 2016, that the health of the Indian private sector economy improved in September, but to a lesser extent than in August. Output and new business increased at softer rates in both the manufacturing and service sectors. Meanwhile, prices charged were raised in line with higher cost burdens. Reflecting softer expansions in activity at both service providers and manufacturers, the seasonally adjusted Nikkei India Composite PMI Output Index fell from August's 42-month high of 54.6 to 52.4 in September. Nonetheless, the latest above-50 reading was the fifteenth in as many months, highlighting ongoing growth in the country. The headline seasonally adjusted Nikkei India Services Business Activity Index registered 52 in September down from August's 43-month high of 54.7, thus the latest reading pointing to a slower rate of expansion that was moderate overall.
In overseas stock markets, European stocks declined as markets digest hawkish comments from US Federal Reserve officials. Most Asian stocks dropped as concern shifted to the likelihood of a US Federal Reserve rate increase by the year's end. Mainland Chinese markets remained closed for the National Day holiday. US stocks closed lower yesterday, 4 October 2016 as investors digested data from the International Monetary Fund and remarks from a Federal Reserve official. Federal Reserve Bank of Richmond President Jeffrey Lacker stating that the central bank should pre-emptively raise short-term interest rates to stave off accelerating inflation.
Global economic growth will remain subdued this year following a slowdown in the United States and Britain's vote to leave the European Union, the IMF said in its October 2016 World Economic Outlook yesterday, 4 October 2016. The world economy will expand 3.1% this year, the IMF said, unchanged from its July projection.
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