Key benchmark indices traded off intraday high early afternoon trade. At 12:15 IST, the barometer index, the S&P BSE Sensex was up 54.96 points or 0.2% at 26,898.10. The Nifty 50 index was currently up 21.35 points or 0.26% at 8,240.30. The Sensex was currently trading below the psychologically important 27,000 level. It had briefly surpassed that level in early trade. The market sentiment was positive after the India Meteorological Department (IMD) in its second stage forecast stuck to its preliminary forecast of above normal rains for the 2016 southwest monsoon season (June to September).
The market breadth indicating the overall health of the market was positive. On BSE, 1,223 shares rose and 1,039 shares declined. A total of 159 shares were unchanged. The BSE Mid-Cap index was currently up 0.51%. The BSE Small-Cap index was currently up 0.31%. Both these indices outperformed the Sensex.
In overseas stock markets, Asian stocks edged higher after data overnight showed US private-sector employment gains accelerated in May 2016 and another data showed filings for unemployment benefits in the US declined for a third consecutive week. The US economy is the world's biggest economy. Chinese stocks shrugged off data showing slowdown in growth in China's services sector last month. In mainland China, the Shanghai Composite index was currently up 0.42%. In Hong Kong, the Hang Seng index was currently up 0.47%. The Caixin China services purchasing managers index (PMI) eased to a three-month low of 51.2 in May from 51.8 in April.
US stocks registered modest gains yesterday, 2 June 2016, on signs of steady job gains in the world's biggest economy. Private-sector employment gains accelerated slightly in May 2016, according to data from Automatic Data Processing Inc. Employers added 173,000 jobs during the month.
In Europe, the European Central Bank (ECB) left key interest rates unchanged after a monetary policy review yesterday, 2 June 2016, in line with investors' expectations. ECB President Mario Draghi said that the central bank remains ready to use all the tools within its mandate to make sure that the low-inflation environment doesn't become entrenched. Draghi said that the central bank could push interest rates further into negative territory if needed.
IT stocks edged higher on renewed buying. Tech Mahindra (up 1.03%), Oracle Financial Services Software (up 1%) and HCL Technologies (up 0.61%) edged higher. TCS (down 0.94%) edged lower.
Index heavyweight and software major Infosys was up 0.93% at Rs 1,272. The stock hit a record high of Rs 1,278 in intraday trade. The stock hit a low of Rs 1,264 so far during the day.
Wipro rose 0.28% at Rs 541.75 after the company announced that it has open sourced its big data product, Big Data Ready Enterprise (BDRE), which makes big data technology adoption simpler and faster by optimizing big data workloads under an integrated unified framework. The product addresses the complete lifecycle of managing data across enterprise data lakes, making it possible to ingest, organize, enrich, process, analyze, govern and extract data at a fast pace, significantly accelerating the big data implementation in a cost effective manner. The announcement was made after market hours yesterday, 2 June 2016.
Pharma stocks were mostly lower. Cipla (down 0.05%), Lupin (down 1.31%), Cadila Healthcare (down 1.3%), Glenmark Pharmaceuticals (down 1.32%), Divi's Laboratories (down 0.7%), Strides Shasun (down 0.88%), Dr Reddy's Laboratories (down 0.68%) and GlaxoSmithkline Pharmaceuticals (down 0.12%) edged lower. Alkem Laboratories (up 2.75%), Wockhardt (up 1.14%), Ipca Laboratories (up 1%), Aurobindo Pharma (up 0.51%) and Sun Pharmaceutical Industries (up 0.18%) edged higher.
Idea Cellular tumbled on reports that US based private equity firm Providence Equity Partners has put on the block about half of its stake in the company. The stock was off 9.84% at Rs 106.70. The stock slumped on huge volumes. On BSE, so far 2.29 crore shares exchanged hands in the counter compared with average daily volume of 7.30 lakh shares in the past one quarter. As per the shareholding pattern of Idea Cellular as on 31 March 2016, Providence Equity Partners owns 6.81% stake in Idea Cellular through its arm P5 Asia Investments (Mauritius) Limited.
Hero MotoCorp (HMCL) was up 1.96% at Rs 3,198.90 after the company's announcement that it has further augmented its senior leadership team with the appointment of Malo Le Masson as the Head of Global Product Planning. Malo, formerly with Infiniti Premium car brand will spearhead HMCL's entire product planning for its global markets, including the domestic market in India. The appointment of Malo, close on the heels of HMCL making its Centre of Innovation and Technology (CIT) in Jaipur operational, significantly ramps-up its newly created function of global product planning, HMCL said in a statement. The announcement was made during market hours today, 3 June 2016.
Dabur India rose 1.86% at Rs 303.80 after the company said that its wholly owned subsidiaries-Dabur UK and Dabur International have incorporated a new subsidiary namely, DABUR PARS, a limited liability company in Iran. Dabur UK holds 99% while Dabur International holds 1% in the subsidiary. DABUR PARS will manufacture cosmetic products including toothpaste, hair oils, hair shampoo and skin care products. The announcement was made after market hours yesterday, 2 June 2016.
Meanwhile, the outcome of monthly survey showed that the rate of growth in India's services sector eased last month as new business inflows expanded at the slowest rate since July 2015. The Nikkei India Services Purchasing Managers' Index (PMI) fell to 51 in May 2016 from 53.7 in April 2016. Output rose in three of the six tracked categories, namely Transport & Storage, Post & Telecommunication and Financial Intermediation. Although some service providers took on additional staff in May 2016, the overall pace of job creation was fractional. Input costs rose again, leading to a further increase in prices charged by service providers. Although service providers remained optimistic that output will expand in the year ahead, the level of confidence was the lowest recorded since February 2016.
Meanwhile, India's weather office India Meteorological Department (IMD) in its second stage monsoon forecast issued after trading hours yesterday, 2 June 2016, said that rainfall over the country as a whole for the 2016 southwest monsoon season is most likely to be above normal. Quantitatively, monsoon season rainfall for the country as a whole is likely to be 106% of the long period average (LPA) with a model error of plus/minus 4%. In its first stage forecast issued on 12 April 2016, the IMD had forecast rainfall to be 106% of the LPA with a model error of plus/minus 5%.
In its region wise forecast, the IMD said that the rainfall is likely to be 108% of LPA in North-West India, 113% of LPA in Central India, 113% of LPA in South Peninsula and 94% of LPA in North-East India, all with a model error of plus/minus 8%. The rainfall over the country as whole is likely to be 107% of its LPA during July 2016 and 104% of LPA during August 2016 both with a model error of plus/minus 9%. The quantum of the rainfall and its spatial and temporal distribution are critical for the country's agriculture.
The IMD said that the rapidly declining El Nino conditions became weak in early May 2016 and now have turned to neutral ENSO conditions. Recent changes in the atmospheric conditions over the Pacific also reflect the weakening El Nino conditions. Latest forecast from IMD-IITM coupled model indicates about 50% probability of La Nina conditions to establish during the monsoon season. Most of the other models also suggest development of La Nina conditions during the latter part of the monsoon season. El Nino conditions cause deficient rains in India whereas La Nina conditions trigger abundant rains in the country.
IMD also said on 2 June 2016 that the conditions are becoming favorable for onset of southwest monsoon over Kerala during next 4-5 days. The arrival of the rains at the Kerala coast marks the onset of the June-September southwest monsoon season in India. The IMD on 15 May 2016 predicted a delay of 6 days for the onset of the monsoon rains in Kerala this year from the normal onset date which is 1 June.
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