Gains in metal and capital goods stocks along with index heavyweights Infosys and HDFC led the latest rally for the two key benchmark indices. The barometer index, the S&P BSE Sensex, rose 364.01 points or 1.5% to settle at 24,606.99. The 50-unit Nifty 50 index rose 106.75 points or 1.45% to settle at 7,475.60. The Sensex and the Nifty remained in positive zone throughout the trading session after opening with an upward gap. With third straight day of gains, the Sensex and the Nifty, both, hit their highest closing level in almost four weeks.
Data showing heavy purchases of Indian stocks by foreign portfolio investors (FPIs) during the previous trading session boosted sentiment on the domestic bourses. FPIs bought shares worth a net Rs 1708.38 crore from the secondary equity markets, yesterday, 2 March 2016, as per data from National Securities Depository (NSDL). The Sensex had risen almost 2% yesterday, 2 March 2016, mirroring a rally in Asian stocks.
Gains in Asian stocks once again aided the upmove on the domestic bourses. Asian stocks edged higher on favourable US economic data overnight. A monthly employment report showed acceleration in US private sector job addition last month.
Metal and mining stocks were in demand after favourable announcements in the Union Budget 2016-17 announced early this week. Capital goods edged higher on expectations of increase in order flow following the government's thrust on infrastructure sector in the Budget. Dr Reddy's Laboratories surged after receiving approval from the United States Food and Drug Administration (FDA) for Palonosetron Hydrochloride injection or Aloxi generic. Central Bank of India nudged higher after the state-run bank said that a special committee of the board has approved raising funds by issuing equity shares.
The broad market depicted strength. There were almost two gainers against every loser on BSE. 1,736 shares rose and 899 shares fell. A total of 138 shares were unchanged. The BSE Mid-Cap index rose 0.58%. The BSE Small-Cap index rose 1.35%. Both these indices underperformed the Sensex.
The Sensex rose 364.01 points or 1.5% to settle at 24,606.99, its highest closing level since 5 February 2016. The Sensex jumped 397.53 points or 1.63% at the day's high of 24,640.51. The barometer index rose 140.30 points or 0.57% at the day's low of 24,383.28 in morning trade.
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The Nifty rose 106.75 points or 1.45% to settle at 7,475.60, its highest closing level since 5 February 2016. The Nifty rose 115.10 points or 1.56% at the day's high of 7,483.95 in late trade. The index rose 37.20 points or 0.5% at the day's low of 7,406.05 in morning trade.
Among the sectoral indices on BSE, the S&P BSE Capital Goods index (up 4.12%), the S&P BSE Metal index (up 4.05%), the S&P BSE Industrials index (up 3.42%), the S&P BSE Basic Materials index (up 2.55%), the S&P BSE Auto index (up 2.08%), the S&P BSE Healthcare index (up 1.69%), the S&P BSE Telecom index (up 1.54%) and the S&P BSE Oil & Gas index (up 1.54%) outperfomed the Sensex. The S&P BSE IT index (up 1.44%), the S&P BSE Teck index (up 1.35%), the S&P BSE Power index (up 1.33%), the S&P BSE Utilities index (up 1.31%), the S&P BSE Energy index (up 1.18%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.97%), the S&P BSE Consumer Durables index (up 0.88%), the S&P BSE Finance index (up 0.67%), the S&P BSE Bankex (up 0.5%), the S&P BSE Realty index (up 0.42%) and the S&P BSE FMCG index (down 0.2%) underperformed the Sensex.
The total turnover on BSE amounted to Rs 2854 crore, lower than turnover of Rs 3356.08 crore registered during the previous trading session.
Index heavyweight Reliance Industries (RIL) rose 1.14% to Rs 1,012.60. The stock hit high of Rs 1,017.25 and low of Rs 997.55 in intraday trade.
Tata group stocks logged across the board gains. Tata Power Company (up 1.61%), Tata Communications (up 4.48%), Voltas (up 0.37%), Tata Chemicals (up 3.41%), Tata Metaliks (up 11.41%), Tata Coffee (up 0.63%), Tata Teleservices Maharashtra (up 3.63%), Trent (up 4.45%), Titan Industries (up 1.87%), Rallis India (up 0.66%), Tata Investment Corporation (up 1.42%) and Tata Sponge Iron (up 17.07%) gained. Tata Global Beverages shed 0.05%.
TCS rose 2.39%. TCS announced that as a new member of the GE Digital Alliance Program created by GE Digital, it will develop innovative digital solutions that increase the productivity of mobile workforces and assets in motion by leveraging Predix, GE's cloud platform for the industrial internet. TCS and GE will work together to create an innovative industry solutions ecosystem by leveraging TCS' comprehensive business and digital expertise to enrich GE's Predix platform, TCS said. The announcement was made after market hours yesterday, 2 March 2016.
Tata Motors rose 5.77%. Jaguar Land Rover (JLR) North America announced early this week that its US sales rose 25% to 7,929 units in February 2016 over February 2015.
Index heavyweight and software major Infosys rose 0.86% at Rs 1,166.15 after the company yesterday, 2 March 2016, said that Al Ahli Bank of Kuwait (ABK), a leading retail bank in Kuwait, has selected Infosys Finacle to drive its technology transformation. Infosys Finacle, part of EdgeVerve Systems, is a product subsidiary of Infosys.
Metal and mining stocks were in demand after favourable announcements in the Union Budget 2016-17 announced early this week. Hindustan Copper rose 4.65%.
Among steel makers, Steel Authority of India (Sail) (up 5.03%), JSW Steel (up 2.49%) and Jindal Steel & Power (up 10.01%) edged higher. The doubling of clean energy cess on coal from Rs 200 to 400 per tonne in Union Budget 2016-17 would further increase the input cost for domestic steel makers and hurt margins. On the flip side, the thrust on infrastructure sector in the Budget will help generate much needed demand for steel industry which is reeling under competition from imports and poor domestic demand.
Tata Steel surged 7.34% at Rs 286.75 after the company in a clarification issued during market hours today, 3 March 2016, said that the Ministry of Environment, Forest and Climate Change has granted environmental clearance for expansion of integrated steel plant located at Jamshedpur, Jharkhand. The expansion involves increase in crude steel production capacity from 9.7 mtpa to 11 mtpa at the Jamshedpur unit.
Shares of aluminium makers edged higher on renewed buying. Hindalco Industries (up 5.68%) and National Aluminium Company (up 9.7%) edged higher. Union Budget 2016-17 addressed rising import issue of the aluminium sector by increasing the custom duty on primary aluminium to 7.5% from 5% and increasing the Basic Customs Duty on other aluminium products to 10% from 7.5%. The increase in custom duty will help to check imports of aluminium. On the flip side, the reduction in export duty on bauxite to 15% from 20% would decrease domestic ore availability.
Hindustan Zinc gained 5.3% at Rs 170.90. The government raised the Basic Customs Duty on zinc alloys to 7.5% from 5% in the Union Budget 2016-17.
Vedanta was up 7.12% and NMDC rose 4.82%. In Union Budget 2016-17, Finance minister Arun Jaitley withdrew export duty on iron ore fines and iron ore lumps with iron content below 58%, which were previously charged export duty of 10% and 30%, respectively. The low grade iron ore, exported by Vedanta from Goa, has few takers in the country, which still relies of high quality iron ore to produce steel. Hence, cut in export duty on low grade iron ore augurs well for the company. The finance minister also hiked import duty on aluminium to 7.5% from 5% in a bid to save the industry from cheap imports, which is also a positive development for Vedanta. Basic customs duty on other aluminium products increased from 7.5% to 10%. Basic customs duty on zinc alloys also increased from 5% to 7.5%.
Stocks of public sector banks (PSU banks) were mixed. IDBI Bank (up 2.34%), Bank of Baroda (up 0.28%), Punjab National Bank (up 0.51%) and State Bank of India (up 1.02%) rose. Vijaya Bank (up 1.54%) and Andhra Bank (up 0.99%) rose. Allahabad bank (down 0.82%), Union Bank of India (down 0.21%), Bank of India (down 0.27%) declined.
PSU bank stocks had surged during the previous trading session after the Reserve Bank of India (RBI) announced relaxations on the treatment of certain balance sheet items for the purpose of determining banks' regulatory capital. Meanwhile, the Union Budget 2016-17 disappointed the public sector banks by maintaining the allocation of capital funds unchanged at Rs 25000 crore for FY 2017 considering higher non-performing assets (NPAs) and weak earnings. On the flip side, the Budget has announced to operationalize Banks Board Bureau (BBB) in 2016-17, which will spell out a roadmap for consolidation of public sector banks.
Central Bank of India rose 2.88% at Rs 67.95 after the bank said that a special committee of the board has approved raising funds by issuing equity shares. Central Bank of India said that the Capital Raising Committee of the board of directors of the bank at its meeting held yesterday, 2 March 2016, approved raising of additional equity capital by issuance and allotment of upto 3.14 crore equity shares of the face value of Rs 10 each at the issue price of Rs 52.66 per equity share, aggregating to Rs 165.56 crore to Life Insurance Corporation of India (LIC) on preferential basis, subject to statutory approvals. The committee also decided to hold an extraordinary general meeting (EGM) of shareholders on 30 March 2016 to seek their approval for the proposed fund raising.
Further, the committee also noted that the bank has sought approval of Government of India (GoI) for raising additional equity capital by conversion of entire 5,830 innovative perpetual debt instruments (IPDI) of the face value of Rs 10 lakh each, aggregating to Rs 583 crore, held by GoI, into equity shares to be issued and allotted to GoI on preferential basis. The bank has also sought approval of GoI for raising additional equity capital of such sum as may be sanctioned by GoI by issuance and allotment of equity shares to GoI on preferential basis. The conversion price and the issue price will be Rs 70.71 per equity share, including premium of Rs 60.71 per equity share, the bank said. The announcement was made after market hours yesterday, 2 March 2016.
Stocks of private sector banks rose. IndusInd Bank (up 1.55%), HDFC Bank (up 0.54%), Axis Bank (up 2.04%), and Kotak Mahindra Bank (up 0.53%) gained. ICICI Bank fell 1.32%.
Yes Bank rose 0.62% after the bank announced that it has acquired 5 lakh equity shares of Institutional Investor Advisory Services (liAS) equivalent to 5.006% of the paid-up capital of IiAS from BSE Limited. The announcement was made during market hours today, 3 March 2016. IiAS is a proxy advisory firm, dedicated to providing participants in the Indian market with independent opinion, research and data on corporate governance issues as well as voting recommendations on shareholder resolutions.
Index heavyweight and housing finance major HDFC rose 1.83% at Rs 1,120.35. The stock hit a high of Rs 1,134.80 and a low of Rs 1,108.95 in intraday trade. HDFC has filed term sheet for issuing secured redeemable non-convertible debentures worth Rs 2000 crore on private placement basis. HDFC said that the coupon rate on debentures is 8.75% per annum. The tenor of the debentures is five years, with redemption date being 4 March 2021. The issue opens and closes on the same day on 4 March 2016. The object of the issue is to augment long term resources of the company, HDFC said. The proceeds of the issue would be utilized for financing/refinancing the housing finance business requirements of the company. The announcement was made after market hours yesterday, 2 March 2016.
HDFC has filed another term sheet for issuing secured redeemable non-convertible debentures worth Rs 1000 crore on private placement basis. HDFC said that the coupon rate on debentures is nil. The instrument has a tenor of four years. With redemption premium of about Rs 39.89 lakh on the face value of Rs 1 crore for each debenture, the effective yield works out to 8.75% per annum. The issue opens and closes on the same day on 9 March 2016. The object of the issue is to augment long-term resources of the company, HDFC said. The announcement was made after market hours today, 3 March 2016.
Capital goods edged higher on expectations of increase in order flow following the government's thrust on infrastructure sector in the Budget. L&T (up 6.35%), Bharat Heavy Electricals (Bhel) (up 5.91%), BEML (up 0.83%), Bharat Electronics (up 2.38%), Crompton Greaves (up 0.11%), ABB India (up 5.29%) and Thermax (up 0.91%) gained. Siemens fell 0.44%.
The increased outlay in core infrastructure sectors of roads including village roads, power, ports and railways as well as incentives for affordable housing in the Union Budget 2016-17 are expected to improve the business opportunities of both domestic capital goods players as well as construction companies with increased order flow. Additionally, the rationalisation of tax structure so as to boost the domestic manufacturing under the 'Make in India' Scheme is expected to boost demand for domestic manufacturers and have cascading impact on domestic capital goods manufacturers.
Dr Reddy's Laboratories rose 5.36% at Rs 3,176 after receiving approval from the United States Food and Drug Administration (FDA) for Palonosetron Hydrochloride injection or Aloxi generic. Palonosetron Hydrochloride is used to treat chemotherapy induced nausea. This is a positive development for the company in the background of USFDA warning letters for its three plants. In November 2015, it had received a warning letter from USFDA for active pharmaceutical ingredients (APIs) manufacturing facilities at Srikakulam (Andhra Pradesh), Miryalaguda (Telengana), and oncology formulation manufacturing facility at Duvvada, Visakhapatnam, Andhra Pradesh.
In October 2015, Dr Reddy's Laboratories had entered into a settlement agreement with Helsinn Healthcare SA, a Switzerland-based pharma company for patent litigations related to Aloxi generic in the US. With this settlement, the company is permitted to market Aloxi generic on 30 September 2018 or earlier.
NBCC rose 1.65% at Rs 924.80 after the company said that its board of directors will meet on 11 March 2016 to consider a stock split proposal. The announcement was made after market hours yesterday, 2 March 2016.
The Sensex and the Nifty edged higher for the third day in a row. The Sensex has surged 1,605.99 points or 6.98% in three trading days from its close of 23,002 on 29 February 2016. The Sensex has fallen 1,507.55 points or 5.77% in calendar year 2016 so far (till 3 March 2016). From a 52-week low of 22,600.39 hit on 12 February 2016, the Sensex has risen 2,008.60 points or 8.88%. The Sensex is off 5,412.75 points or 18.02% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, the outcome of a monthly survey showed that the rate of growth in India's services sector eased last month. The seasonally adjusted Nikkei India Services Purchasing Managers' Index (PMI) fell to a three-month low of 51.4 in February 2016, from January's reading of 54.3. Service providers' confidence with regards to the 12-month outlook for business activity remained positive, with panellists indicating that improved marketing campaigns are likely to drive sales. However, the sentiment waned since January 2016.
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