A divergent trend was witnessed between the two key benchmark indices in early afternoon trade with the barometer index, the S&P BSE Sensex, trading with minuscule losses and the Nifty 50 index trading with tiny gains. At 12:15 IST, the Sensex was down 4.45 points or 0.02% at 25,265.19. The Nifty was currently up 6.95 points or 0.09% at 7,720. The Sensex alternately swung between positive and negative zone near the flat line in early afternoon trade. The Nifty has remained in green so far during trading session.
The Sensex fell 11.09 points or 0.04% at the day's low of 25,258.55 in early afternoon trade. The barometer index rose 149.55 points or 0.59% at the day's high of 25,419.19 at the onset of the trading session, its highest level since 31 March 2016. The Nifty rose 44.55 points or 0.57% at the day's high of 7,757.60 at the onset of the trading session, its highest level since 31 March 2016. The index rose 3.30 points or 0.04% at the day's low of 7,716.35 in early afternoon trade.
In overseas stock markets, most Asian stocks edged higher after US monthly job data reinforced market expectations that the US Federal Reserve will adopt a slower path for interest-rate increases. US stocks registered modest gains during the previous trading session on Friday, 1 April 2016, as investors bet that a spate of strong economic data, including the March jobs report, won't speed up the pace of interest-rate increases by the Federal Reserve. In a speech in New York on 29 March 2016, Federal Reserve Chairwoman Janet Yellen stressed a need for a cautious stance on interest-rate increases in the backdrop of global economic slowdown.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,350 shares rose and 909 shares fell. A total of 132 shares were unchanged. The BSE Mid-Cap index was currently up 0.11%. The BSE Small-Cap index was currently up 0.2%. Both these indices outperformed the Sensex.
Aviation stocks edged higher on lower crude oil prices. SpiceJet (up 2.5%), Jet Airways (India) (up 2.16%) and InterGlobe Aviation (up 2.49%) rose. Lower crude oil prices benefit aviation firms as jet fuel prices, which typically constitute about 50% of airlines' operating costs, are directly linked to international crude oil prices.
Crude oil prices fell in the global commodities markets after a media report suggested that Iran would continue increasing its oil production and exports until it reaches the market position it enjoyed before the imposition of sanctions. Brent for June settlement was currently down 40 cents at $38.27 a barrel. The contract had fallen $1.66 a barrel or 4.11% to settle at $38.67 a barrel during the previous trading session.
The world's major crude oil producers led by Russia and Saudi Arabia have convened a meeting on 17 April 2016 in Doha, Qatar to discuss measures to stabilise prices, including a proposal to freeze output.
Realty stocks were mixed ahead of the Reserve Bank of India (RBI) monetary policy review. D B Realty (up 1.81%), Prestige Estates Projects (up 0.58%), Godrej Properties (up 1.12%) and Sobha (up 0.53%) edged higher. Oberoi Realty (down 0.23%), DLF (down 1.37%), Indiabulls Real Estate (down 1.64%), Housing Development & Infrastructure (down 1.04%) and Unitech (down 1.33%) edged lower.
The Reserve Bank of India (RBI) will announce the First Bi-monthly Monetary Policy Statement, 2016-17 at 11:00 IST tomorrow, 5 April 2016. Market expectations are that the RBI will cut its benchmark lending rate viz. the repo rate by atleast 25 basis points on 5 April 2016, with the government sticking to its fiscal deficit target for year 2016-17 in the Union Budget 2016-17 on 29 February 2016. Purchases of both residential and commercial property are largely driven by finance.
E-commerce firm Infibeam Incorporation made a lacklustre debut on the bourses. The stock was currently trading at Rs 453.50 on BSE, a premium of 4.97% compared with initial public offer (IPO) price of Rs 432. The stock debuted at Rs 458, a premium of 6.01% compared with its IPO price. The stock hit a high of Rs 466.90 and a low of Rs 439.90 so far during the day. Infibeam Incorporation is an e-commerce company focused on developing an integrated and synergistic e-commerce business model.
On the macro front, the finance ministry after trading hours on Friday, 1 April 2016, announced that as per initial estimates, the fiscal deficit for 2015-16 is expected to be within the target of 3.9% of GDP. It further said that the government remains committed to the path of fiscal consolidation. The government's Plan Expenditure for 2015-16 is expected to be around Rs 4.70 lakh crore, which will be higher than the budget estimate and also higher than the actual plan expenditure in 2014-15.
Meanwhile, the outcome of a monthly survey showed that the growth in India's manufacturing accelerated last month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) hit eight-month high of 52.4 in March 2016. The index rose from 51.1 in February 2016. Despite gathering momentum, growth of production and new orders still remained below trend rates. The latest monthly survey showed that inflationary pressures in India's manufacturing are on the upside, with cost burdens rising at the quickest pace in three months in March and output charge inflation reaching a 16-month high in the month just gone by. The build-up in inflationary pressures may lead the Reserve Bank of India to hold off from cutting rates, especially as solid growth was seen in March, said Pollyanna De Lima, Economist at Markit.
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