Key benchmark indices regained strength in afternoon trade after European stocks showed a positive start to the session. At 13:20 IST, the barometer index, the S&P BSE Sensex was up 178.77 points or 0.6% at 30,073.57. The Nifty 50 index advanced 26.45 points or 0.28% at 9,338.40. The Sensex was currently trading above the psychological 30,000 level after regaining that mark in opening trade.
Investors' sentiment was also boosted in the wake of reports the Union Cabinet approved promulgation of an ordinance to amend the Banking Regulation Act for resolution of the bad loan crisis facing banks.
Capital goods stocks gained. Most metal and mining stocks declined after economic data in China showed its service sector expanded at the slowest pace in nearly a year in April.
After opening with strong gains, key indices held in the positive terrain so far during the session.
Among secondary indices, the BSE Mid-Cap index rose 0.29%. The BSE Small-Cap index advanced 0.31%. Both these indices underperformed the Sensex.
The breadth, indicating the overall health of the market, was positive. On the BSE, 1,376 shares rose and 1,293 shares declined. A total of 147 shares were unchanged.
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Most metal and mining stocks declined after economic data in China showed its service sector expanded at the slowest pace in nearly a year in April. Vedanta (down 3.23%), NMDC (down 1.29%), Hindalco Industries (down 2.97%), Hindustan Zinc (down 1.34%) and National Aluminium Company (down 0.01%) edged lower. China is the world's largest consumer of steel, copper and aluminum.
Steel stocks were mixed. Jindal Steel & Power (down 0.22%), Tata Steel (down 0.73%), and JSW Steel (down 0.67%) declined. Bhushan Steel (up 0.95%) and Steel Authority of India (up 0.08%) gained.
Meanwhile, the Union Cabinet chaired by the Prime Minister Narendra Modi has given its approval for National Steel Policy (NSP) 2017 yesterday, 3 May 2017. The new Steel Policy enshrines the long term vision of the Government to give impetus to the steel sector. It seeks to enhance domestic steel consumption and ensure high quality steel production and create a technologically advanced and globally competitive steel industry.
The policy projects crude steel capacity of 300 million tonnes (MT), production of 255 MT and a robust finished steel per capita consumption of 158 kgs by 2030 - 31, as against the current consumption of 61 Kgs. The policy also envisages to domestically meet the entire demand of high grade automotive steel, electrical steel, special steels and alloys for strategic applications and increase domestic availability of washed coking coal so as to reduce import dependence on coking coal from about 85% to around 65% by 2030-31.
Capital goods stocks gained. Havells India (up 0.6%), ABB India (up 0.29%), Bharat Electronics (up 0.36%), L&T (up 0.49%), Thermax (up 0.56%), and Siemens (up 1.53%) gained. Bharat Heavy Electricals (Bhel) declined 0.49%.
Everest Industries spurted 5.77% after net profit rose 18.5% to Rs 14.09 crore on 3.9% decrease in net sales to Rs 320.66 crore in Q4 March 2017 over Q4 March 2016. The result was announced after market hours yesterday, 3 May 2017.
On the macro front, data released by Markit Economics during market hours today, 4 May 2017 showed that the rate of increase in Indian service sector activity weakened in April 2017. The headline seasonally adjusted Nikkei Services PMI Business Activity Index was down at 50.2 in April, from 51.5 in March.
Overseas, European stocks edged higher in early trade. Asian stocks witnessed a mixed trend after the US Federal Reserve indicated it remains on track to deliver two more rate increases by year-end.
China's service sector expanded at the slowest pace in nearly a year, a private gauge showed, pointing to possible softness in the sector. The Caixin China services purchasing managers' index slipped to 51.5 in April--the lowest since May 2016--from 52.2 in March, Caixin Media Co. and research firm Markit said.
US stocks closed little lower yesterday, 3 May 2017, as gains in banking shares were offset by declines in media stocks and Apple shares.
The US Federal Reserve yesterday, 3 May 2017, left monetary policy unchanged, as expected, and indicated it remains on track to deliver two more rate increases by year-end.
The Fed said that it would not change its interest rate target this month. However, the Fed also stated that a recent economic slowdown was transitory, fuelling hopes among investors for future rate rises.
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