A divergent trend was witnessed between the two key benchmark indices, with the barometer index, the S&P BSE Sensex, registering minuscule losses and the 50-unit Nifty 50 index registering small gains. The Sensex fell 5.11 points or 0.02% to settle at 24677.37. The Nifty rose 13.80 points or 0.18% to settle at 7,512.55. The rally on the domestic bourses fizzled out at the fag end of the trading session as European stocks reversed initial gains. For almost throughout the trading session, the Sensex and the Nifty hovered in positive zone following a dovish statement from the US Federal Reserve at the conclusion of a two-day monetary policy review yesterday, 16 March 2016.
Shares of public sector oil marketing companies (PSU OMCs) rose after announcing a hike in petrol and diesel prices. Shares of oil exploration and production firms rose after a surge in international crude oil prices. ONGC moved higher after the company said that its overseas investment arm ONGC Videsh and Rosneft have signed a memorandum of understanding (MoU) for the acquisition of 11% shares in Vankorneft, a wholly owned subsidiary of Rosneft. GAIL (India) surged after piped and natural gas regulator Petroleum and Natural Gas Regulatory Board (PNGRB) raised the tariff on GAIL's K.G. Basin natural gas pipeline network sharply.
Most metal and mining stocks gained as copper prices rose in global commodity markets. Pharma stocks declined on firm rupee.
In overseas stock markets, European stocks reversed initial gains as strength in euro against the dollar raised concerns on exports front. Earlier during the global day, Asian edged higher after the Fed slashed its projections for rate increases to two in 2016 from an earlier projection of four after keeping rates unchanged at the conclusion of a two-day monetary policy review yesterday, 16 March 2016. Fewer US interest rates hikes could support demand for emerging-market assets because investors have less incentive to draw out money from risky assets in their search for higher yields in the US.
US stocks rose yesterday, 16 March 2016, in the aftermath of the Fed statement. The Fed concluded a two-day policy meeting by leaving interest rates untouched, as expected, and signalling fewer rate hikes in coming months as the United States continues to face risks from an uncertain global economy. In light of the current shortfall of inflation from 2 percent, the committee will carefully monitor actual and expected progress toward its inflation goal, the Fed said in a statement. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation, it said.
The Sensex fell 5.11 points or 0.02% to settle at 24,677.37, its lowest closing level since 15 March 2016. The index shed 105.96 points or 0.42% at the day's low of 24,576.52. The barometer index rose 265.82 points or 1.07% at the day's high of 24,948.30.
The Nifty 50 index rose 13.80 points or 0.18% to settle at 7,512.55, its highest closing level since 14 March 2016. The index dropped 19.35 points or 0.25% at the day's low of 7,479.40. The index rose 86.55 points or 1.15% at the day's high of 7,585.30.
The BSE Mid-Cap index rose 0.52%. The BSE Small-Cap index rose 0.07%. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market turned negative from positive in late trade. On BSE, 1,310 shares fell and 1,303 shares rose. A total of 182 shares were unchanged.
The total turnover on BSE amounted to Rs 2529 crore, higher than turnover of Rs 2249.88 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Oil & Gas index (up 2.26%), the S&P BSE Basic Materials index (up 1.28%), the S&P BSE Capital Goods index (up 1.08%), the S&P BSE IT index (up 0.88%), the S&P BSE Teck index (up 0.88%), the S&P BSE Telecom index (up 0.77%), the S&P BSE Industrials index (up 0.74%), the S&P BSE Energy index (up 0.69%), the S&P BSE FMCG index (up 0.48%), the S&P BSE Utilities index (up 0.36%), the S&P BSE Power index (up 0.27%) and the S&P BSE Consumer Durables index (up 0.06%), outperformed the Sensex. The S&P BSE Bankex (down 0.06%), the S&P BSE Metal index (down 0.1%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.12%), the S&P BSE Auto index (down 0.19%), the S&P BSE Finance index (down 0.27%), the S&P BSE Realty index (down 0.94%) and the S&P BSE Healthcare index (down 1.24%), underperformed the Sensex.
Index heavyweight and housing finance major HDFC fell 1.44% to Rs 1,109.70. The stock hit a high of Rs 1,151.15 and a low of Rs 1,104.40 in intraday trade.
Index heavyweight Reliance Industries (RIL) fell 0.61% to Rs 1,015.55. The stock hit a high of Rs 1,036.40 and a low of Rs 1,012.40 in intraday trade.
GAIL (India) surged after piped and natural gas regulator Petroleum and Natural Gas Regulatory Board (PNGRB) raised the tariff on GAIL's K.G. Basin natural gas pipeline network sharply to Rs 45.32 per mmbtu on Gross Calorific Value (GCV) basis from Rs 5.56 per mmbtu with effect from 1 April 2016. The stock rose 4.04% to Rs 353.10. PNGRB in its tariff order set tariff at Rs 5.56 per mmbtu for the K.G. Basin natural gas pipeline for the period from 20 November 2008 to 31 March 2016 and Rs 45.32 per mmbtu for the period from 1 April 2016 to 11 February 2017. The economic life of GAIL's K.G. Basin natural gas pipeline ends on 11 February 2017.
Pharma stocks declined on firm rupee. Lupin (down 4.23%), Strides Shasun (down 2.45%), Glenmark Pharmaceuticals (down 2.04%), Cipla (down 1.54%), Dr Reddy's Laboratories (down 1.07%), Sun Pharmaceutical Industries (down 1.01%), Wockhardt (down 0.84%), Divi's Laboratories (down 0.53%), Cadila Healthcare (down 0.52%), Aurobindo Pharma (down 0.05%) and IPCA Laboratories (down 0.02%), edged lower. Piramal Enterprises (up 0.12%), Alkem Laboratories (up 0.15%) and GlaxoSmithKline Pharmaceuticals (up 0.95%), edged higher. Firmness in rupee could adversely affect sales of pharma companies in rupee terms as pharma firms derive substantial revenue from exports.
In the foreign exchange market, the partially convertible rupee was currently hovering at 66.685, compared with closing of 67.23 during the previous trading session.
Cement stocks surged on renewed buying. ACC (up 2.92%), Shree Cement (up 1.33%), Ambuja Cements (up 5.64%), and UltraTech Cement (up 1.58%) gained.
Grasim Industries advanced 0.85%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Bank shares were mixed. Among state-run banks, Corporation Bank (down 2.44%), Punjab and Sind Bank (down 1.3%), Andhra Bank (down 0.98%), Bank of India (down 0.89%), Vijaya Bank (down 0.8%), Bank of Baroda (down 0.66%), Dena Bank (down 0.52%), Canara Bank (down 0.45%), UCO Bank (down 0.27%), Central Bank of India (down 0.22%), Syndicate Bank (down 0.16%), Punjab National Bank (down 0.06%), edged lower. Union Bank of India (up 0.04%), Allahabad Bank (up 0.19%), Bank of Maharashtra (up 0.34%), State Bank of India (up 0.57%), United Bank of India (up 1.04%), IDBI Bank (up 1.60%) and Indian Bank (up 2.58%), edged higher.
Among private sector banks, IndusInd Bank (down 1.41%), HDFC Bank (down 1.25%), Kotak Mahindra Bank (down 0.84%) and Yes Bank (down 0.63%) edged lower. ICICI Bank (up 0.49%), Axis Bank (up 0.87%), City Union Bank (up 1.84%) and Federal Bank (up 3.21%), edged higher.
Most metal and mining stocks gained as copper prices rose in global commodity markets. Hindustan Copper (up 4.93%), NMDC (up 3.06%), National Aluminium Company (up 0.76%), and Hindustan Zinc (up 0.09%), edged higher. Hindalco Industries (down 0.55%) edged lower. Vedanta ended flat at Rs 86.35.
High Grade Copper for May 2016 delivery was currently up 2.66% at $2.2935 per pound on the COMEX.
Steel stocks witnessed a mixed trend. Bhushan Steel (up 1.51%), Steel Authority of India (up 0.71%) and Jindal Steel & Power (up 0.26%), edged higher. Tata Steel (down 1.14%) and JSW Steel (down 0.15%) edged lower. As per media reports, an arm of the finance ministry has recommended maintaining import duties on some steel products until March 2018. It may be recalled that, last month, the government set the minimum import price (MIP) on 173 steel products to check the influx of cheap imports. In September 2015, the government imposed a provisional safeguard duty of 20% on hot-rolled flat products of non-alloy and other alloy steel, in coils of a width of 600 mm or more, for a period of 200 days.
Shares of public sector oil marketing companies (PSU OMCs) rose after announcing a hike in petrol and diesel prices. BPCL (up 5.67%), HPCL (up 3.28%) and Indian Oil Corporation (up 2.64%) edged higher. Indian Oil Corporation (IOCL) yesterday, 16 March 2016, announced an increase in the price of petrol and diesel with effect from the midnight of 16/17 March 2016. Petrol price was hiked by Rs 3.07 per litre and diesel price was raised by Rs 1.90 a litre at Delhi (including state levies) with corresponding price revision in other states. After the latest revision, petrol in Delhi costs Rs 59.68 per litre and diesel costs Rs 48.33 a litre.
Shares of oil exploration and production firms rose after a surge in international crude oil prices. Cairn India (up 2.76%) and Oil India (up 0.89%) edged higher. Higher crude oil prices would result in higher realization from crude sales for oil exploration firms.
In the global commodities markets, Brent futures edged higher after news reports said that Qatar will host a meeting of the world's major producers, both in and outside of the Organization of the Petroleum Exporting Countries on 17 April 2016 to discuss oil supply freeze. Brent for May settlement was currently up 81 cents at $41.14 a barrel. The contract had jumped $1.59 a barrel or 4.1% to settle at $40.33 a barrel during the previous trading session.
ONGC moved higher after the company said that its overseas investment arm ONGC Videsh and Rosneft have signed a memorandum of understanding (MoU) for the acquisition of 11% shares in Vankorneft, a wholly owned subsidiary of Rosneft. The stock rose 2.95%. The acquisition is in addition to the 15% shares for which the definitive agreements were signed in September 2015. The MoU also provides for the parties to explore the possibility to conclude long-term crude oil and feedstock supply agreements whereunder Rosneft would supply oil to the refineries of ONGC Videsh located in India. The announcement was made during market hours today, 17 March 2016.
Meanwhile, Finance Minister Arun Jaitley was today, 17 March 2016, quoted as saying that it would be difficult for the government to accept the opposition Congress party's demand to cap the goods and services tax (GST) rate in the GST constitution amendment bill stuck in parliament. The Congress wants Jaitley to cap the rate of GST at less than 20%. Considered as a major indirect tax reform in the country, GST aims to remove barriers across states and unite the country into a common market. GST will subsume central indirect taxes such as excise duty and service tax at the central level and value added tax at the state level besides other local levies such as octroi and entry tax.
The Sensex has risen 1,678.37 points or 7.3% in this month so far (till 17 March 2016). The Sensex has fallen 1,436.17 points or 5.5% in calendar year 2016 so far (till 17 March 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the Sensex has risen 2,184.76 points or 9.71%. The Sensex is off 4,416.24 points or 15.18% from a 52-week high of 29,094.61 hit on 15 April 2015. The Sensex is off 5,347.37 points or 17.81% from a record high of 30,024.74 hit on 4 March 2015.
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