A bout of volatility was witnessed as key benchmark indices hovered in green in mid-morning trade after the latest data showed that India's manufacturing sector returned to expansion mode in January 2016. At 11:15 IST, the barometer index, the S&P BSE Sensex was up 56.53 points or 0.23% at 24,927.22. The gains for the 50-unit Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was currently up 25.55 points or 0.34% at 7,589.10. The Sensex was currently trading below the psychological 25,000 level. Earlier, it had briefly surpassed that level in morning trade.
The Sensex hit 2-1/2-week high when it rose 131.63 points or 0.52% at the day's high of 25,002.32 in morning trade. The index lost 24.45 points or 0.09% at the day's low of 24,846.24 in early trade. The Nifty also hit its highest level in 2-1/2-weeks when it rose 36.90 points or 0.48% at the day's high of 7,600.45 in morning trade. The index lost 6.75 points or 0.08% at the day's low of 7,556.80 in early trade.
India's manufacturing sector returned to expansion mode in January 2016 as the industry recovered following the contraction seen at the end of calendar year 2015. Alongside a resumption of output at some firms impacted by December's flooding in Tamil Nadu, manufacturers also benefited from rising inflows of new business from domestic and export clients. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) rose to 51.1 in January 2016 from 49.1 in December 2015.
In overseas stock markets, Asian stocks witnessed mixed trend. Chinese stocks edged lower amid more signs of weakening in the Chinese economy. The Shanghai Composite index was currently off 1.53%. In Hong Kong, the Hang Seng index was currently off 0.77%. China's statistics bureau reported today, 1 February 2016, that the official manufacturing purchasing managers index fell to 49.4 in January from 49.7 in December--the sixth consecutive month of contraction. Meanwhile, Japanese stocks extended a rally registered during the previous trading session on Friday, 29 January 2016, triggered by the Bank of Japan's surprise decision to cut interest rates to negative territory. The Nikkei Stock Average was currently up 1.98%..
US stocks closed sharply higher on Friday, 29 January 2016, amid a global equity rally following a surprise decision by the Bank of Japan to push a key interest rate into negative territory
Closer home, the broad market depicted strength. There were more than two gainers against every loser on BSE. 1,508 shares rose and 742 shares declined. A total of 84 shares were unchanged. The BSE Mid-Cap index was currently up 0.66%. The BSE Small-Cap index was currently up 0.9%. Both these indices outperformed the Sensex.
Telecom stocks edged higher. Bharti Airtel (up 1.73%), Idea Cellular (up 1.5%) and Tata Teleservices (Maharashtra) (up 3.29%) gained. Reliance Communications (down 0.81%) edged lower. Mahanagar Telephone Nigam was unchanged at Rs 18.75.
Capital goods stocks rose. Siemens (up 1.73%), Crompton Greaves (up 1.29%), Bharat Heavy Electricals (up 1.37%), Havells India (up 1.37%), Praj Industries (up 1.08%), ABB India (up 1.81%), Alstom T&D India (up 0.47%), Bharat Electronics (up 0.7%) and BEML (up 0.84%) gained.
L&T surged after announcing Q3 earnings. The stock was up 4.84% at Rs 1,155.75. The company's consolidated net profit rose 19% to Rs 1035 crore on 8.4% growth in gross revenue to Rs 26058 crore in Q3 December 2015 over Q3 December 2014. The result was announced after market hours on Friday, 29 January 2016. The bottom line was boosted by a sharp surge in non-operational income or the so called other income. The other income jumped 90.8% to Rs 451.68 crore in Q3 December 2015 over Q3 December 2014
The company garnered fresh orders worth Rs 38528 crore in Q3 December 2015. The company's order inflow rose 11% on year-on-year (y-o-y) basis in Q3 December 2015. L&T has reduced the order inflow guidance for the year ending 31 March 2016 (FY 2016). The management expects flat to slight 1-2% growth in order inflow in FY 2016 as compared to previous guidance of 5-7% growth. In a post-result conference call, L&T's management said that the order inflow pipeline is very healthy at around Rs 2 lakh crore. The management has retained the guidance of 10-15% growth in net sales for FY 2016. The management expects increase in EBIDTA margin in FY 2016. However, according to the management, it is difficult to quantify the extent of expected increase in profit margin. The management had previously guided a 100 bps y-o-y improvement in EBIDTA for FY 2016.
L&T's consolidated order book rose 14% on year-on-year basis at Rs 256458 crore as at 31 December 2015. International order book constituted 27% of the total order book.
Thermax fell 1.24% at Rs 826.20 after net profit fell 10.94% to Rs 67.86 crore on 7.07% decline in total income to Rs 1052.03 crore in Q3 December 2015 over Q3 December 2014. The result was announced after market hours on Friday, 29 January 2016.
Thermax's order intake declined 29.31% to Rs 868 crore in Q3 December 2015 over Q3 December 2014. The order booking continues to face headwind due to subdued market conditions, Thermax said in a statement.
Maruti Suzuki India dropped 1.96% at Rs 4,016.95 after the company reported a 2.6% decline in its total sales to 1.13 lakh units in January 2016 over January 2015. Domestic sales rose 0.8% to 1.06 lakh units in January 2016 over January 2015. Domestic sales would have been higher, but lesser number of working days in January 2016 impacted overall production and dispatch, Maruti Suzuki said in a statement. Exports fell 34.6% to 7,223 units in January 2016 over January 2015. The company announced the sales volume data during market hours today, 1 February 2016.
The Reserve Bank of India (RBI) is scheduled to announce its sixth bi-monthly monetary policy for the year 2015-16 at 11:00 IST tomorrow, 2 February 2016. In the fifth bi-monthly monetary policy on 1 December 2015, the RBI kept its benchmark interest rate viz. the repo rate unchanged at 6.75% and the cash reserve ratio (CRR) for commercial banks unchanged at 4% of net demand and time liability (NDTL).
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