The movement for key benchmark indices remained confined to narrow range in early afternoon trade. At 12:15 IST, the barometer index, the S&P BSE Sensex, was up 136.69 points or 0.54% at 25,573.66. The Nifty 50 index was currently up 47.90 points or 0.61% at 7,853.80. Data showing strong growth in core sector in March 2016 and overnight gains on Wall Street aided the upmove on the domestic bourses.
The market breadth indicating the overall health of the market was strong. On BSE, 1,482 shares rose and 796 shares declined. A total of 147 shares were unchanged. The BSE Mid-Cap index was currently up 0.44%, underperforming the Sensex. The BSE Small-Cap index was currently up 0.98%, outperforming the Sensex.
In overseas stock markets, Asian stocks witnessed a mixed trend. Chinese stocks saw a divergent trend after the latest data showed deceleration in China's manufacturing activity in April 2016. In mainland China, the Shanghai Composite was currently up 1.45%. In Hong Kong, the Hang Seng index was currently down 1.18%. The Caixin China general manufacturing purchasing managers' index fell to 49.4 in April 2016 from 49.7 in March 2016. A reading below 50 indicates economic contraction. China's official manufacturing PMI, a competing gauge, came in at 50.1 in April 2016 compared with 50.2 in March 2016, according to data released by the National Bureau of Statistics on 1 May 2016. Meanwhile, Chinese leaders have called for strengthening the supervision of stock market and protecting investor interests, according to reports.
US stocks closed higher yesterday, 2 May 2016, after data showed slow-but-steady economic growth unfolding in the US. Latest data from the Institute for Supply Management showed manufacturing index in US fell to 50.8 last month from 51.8 in March. The reading, coming in above 50, indicates expansion in manufacturing activity, albeit at a slower-than-expected pace. Meanwhile, the San Francisco Federal Reserve President John Williams reiterated yesterday, 2 May 2016, his view that the US economy is ready for higher interest rates, but flagged the risk of broad-based declines in asset prices as a result.
Bank stocks edged higher on renewed buying. Among public sector banks, Bank of Baroda (up 1.77%), Bank of India (up 0.55%), Canara Bank (up 1.14%), Corporation Bank (up 0.13%), IDBI Bank (up 0.87%), Indian Bank (up 0.46%), Punjab National Bank (up 1.66%), Syndicate Bank (up 1.23%) and Union Bank of India (up 1.43%) rose.
State Bank of India (SBI) rose 1.13% at Rs 188.50 after the bank announced reduction in lending rates by 5 basis points (bps) across tenures. SBI's Marginal Cost of Funds based Lending Rate (MCLR) for overnight loans will be 8.9%. MCRL for one-month loans will be 9% and for three-month loans it will be 9.05%. The MCLR on 6-month loans will be 9.1% and for one-year loans the rate would be 9.15%, the bank said. MCLR for two-year loans would be at 9.25% and loans with three-year maturity would carry an MCLR of 9.3%, the bank said. The announcement was made after trading hours yesterday, 2 May 2016.
All rupee loans sanctioned and credit limits renewed with effect from 1 April 2016 are priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which is the internal benchmark of the concerned bank. Actual lending rates are determined by adding the components of spread to the MCLR.
Among private sector banks, HDFC Bank (up 1.19%), IndusInd Bank (up 0.47%), ICICI Bank (up 0.68%), Axis Bank (up 0.23%) and Yes Bank (up 0.01%) rose. Kotak Mahindra Bank (down 0.89%) declined.
IT stocks edged lower on strong rupee. Persistent Systems (down 0.75%), Oracle Financial Services Software (down 1.2%), TCS (down 0.83%), HCL Technologies (down 0.61%) and Wipro (down 0.16%) declined. Tech Mahindra (up 0.25%) edged higher. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.
Index heavyweight and software major Infosys was down 0.24% at Rs 1,197.75. The stock hit a high of Rs 1,212.05 and a low of Rs 1,196 so far during the day.
In the foreign exchange market, the partially convertible rupee was currently hovering at 66.2525, compared with closing of 66.445 during the previous trading session.
Shares of Dr Reddy's Laboratories fell 0.97% to Rs 2,983, with the stock extending previous trading session's slide. The stock had declined 2.65% to settle at Rs 3,012.10 yesterday, 2 May 2016.
Shares of state-run coal mining giant Coal India were down 0.78% at Rs 286.45 as the company's coal production and offtake in April 2016 fell short of the company's internal target. Coal India and its subsidiaries on provisional basis achieved 90% of targeted production at 40.09 million tonnes and 83% of targeted offtake at 42.45 million tonnes in April 2016. The announcement was made after market hours yesterday, 2 May 2016.
Atul Auto slumped 7% at Rs 488.25 after the company reported 50.36% fall in sales to 1,242 units in April 2016 over April 2015. Atul Auto attributed the sharp fall in sales to its dealers in Gujarat suspending taking delivery of vehicles from 1 April 2016 due to increase in value added tax. The Gujarat state government in its Budget for 2016-17 increased the value added tax (VAT) on motor vehicles sold to dealers from 15% to 20%. Sales made by dealers to customers attract a lower VAT of 15%.
CCL Products (India) jumped 13.41% to Rs 219.95 after consolidated net profit soared 70.3% to Rs 36.66 crore on 23.1% rise in net sales to Rs 264.02 crore in Q4 March 2016 over Q4 March 2015. The company announced the results after trading hours yesterday, 2 May 2016.
On the macro front, data released by the government after market hours yesterday, 2 May 2016, showed that the core sector registered a strong growth of 6.4% in March 2016 over March 2015. The eight core industries comprising of coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity have nearly 38% weightage in the index of industrial production (IIP). The core sector registered a growth of 2.7% in the year ended 31 March 2016 over the year ended 31 March 2015.
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