A bout of volatility was witnessed as key benchmark indices regained positive zone in afternoon trade. While the barometer index, the S&P BSE Sensex, was trading with small gains, the 50-unit CNX Nifty hovered near the flat line. At 13:18 IST, the Sensex was up 47.83 points or 0.17% at 26,833.38. The Nifty was up 1.80 points or 0.02% at 8,121.10. The Sensex failed to retain the psychological 27,000 mark after surpassing that mark in early trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,398 shares rose and 1,072 shares declined. A total of 144 shares were unchanged. The BSE Mid-Cap index was up 0.18%. The BSE Small-Cap index was up 0.55%. Both of these indices outperformed the Sensex.
In overseas stock markets, European shares edged lower in early trade, with mixed corporate updates providing little clear direction for the market. Asian stocks edged higher on prospects of a delay in the US Federal Reserve's plan to raise interest rates and signs of some stability in oil and commodity markets. US stocks jumped yesterday, 5 October 2015, with the S&P 500 index rising for the fifth day in a row, as rising oil prices boosted energy stocks and investors bet the Federal Reserve would not raise interest rates in calendar year 2015.
Tata Motors (up 5.06%), Cipla (up 3.15%) and GAIL (India) (up 2.95%) were the major gainers from the Sensex pack.
Cement stocks declined. ACC (down 1.09%), UltraTech Cement (down 1.86%), Ambuja Cements (down 0.26%) and Shree Cement (down 0.53%) fell.
Grasim Industries was off 0.92% at Rs 3,578.95. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
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Telecom stocks were in demand on renewed buying. Idea Cellular (up 2.96%), MTNL (up 2.77%), Tata Teleservices (Maharashtra) (up 1.9%) and Bharti Airtel (up 0.45%) gained. Reliance Communications shed 0.14%.
REC (down 4.88%), Power Finance Corporation (down 3.09%), Emami (down 2.96%), Cummins India (down 2.39%) and UCO Bank (down 2.32%) were the major losers from the BSE's 'A' group.
Canara Bank rose 1.34% after the bank said its board of directors approved reduction in the bank's base rate by 25 basis points to 9.65% from 9.9% with effect from 7 October 2015. The announcement was made after market hours yesterday, 5 October 2015.
Alok Industries fell 1.07% to Rs 6.46 on profit booking after the stock rose 7.57% in the preceding five trading sessions to Rs 6.53 yesterday, 5 October 2015, from a recent low of Rs 6.07 on 24 September 2015.
Meanwhile, the outcome of a monthly survey from Markit Economics showed that the growth in India's services sector activity eased last month. The Nikkei India Business Activity index dropped to 51.3 in September 2015 from 51.8 in August 2015. The slowdown in growth in the services sector comes close on the heels of another data showing slowdown in growth momentum in the manufacturing sector in September 2015.
Meanwhile, the finance ministry yesterday, 5 October 2015, announced that the central government's expenditure on major subsidies has come down to 1.6% of GDP in 2015-16 from 2.5% of GDP in 2012-13. There could be a shortfall of around 5% to the estimated target of tax collection of Rs 14.5 lakh crore for the current fiscal year. The government is committed to achieving this year's fiscal deficit target as well as the fiscal glide path laid out in the budget, the finance ministry said. The central government's infrastructure spending has picked-up on the back of accelerated spending on highways, railways and the power sector. The central government's Plan Cap-EX has increased by over 30% this year. This is beginning to crowd-in private investment. The public private partnership projects which had been stalled are also now picking up.
With regard to inflation, the finance ministry said that the government's proactive food management to augment domestic supplies will ensure that food inflation is contained in the wake of scanty rains. The government and the Reserve Bank of India (RBI) will work together to consolidate the gains achieved in inflation control through the inflation targeting framework and the associated institutional arrangements. The finance ministry further said that the government will play its part to ensure that the benefits of falling interest rates are transmitted to the economy at large. A number of commercial banks have announced a reduction in their base rate during the past few days in the wake of a steeper-than-expected 50 basis points cut in the repo rate announced by the RBI after a regular monetary policy review early last week.
The finance ministry issued the statement after a press conference held by various secretaries to the Ministry of Finance and Chief Economic Adviser (CEA) Dr Arvind Subramanian on the completion of six months of financial year 2015-16 on 30 September 2015.
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