Capital goods stocks and index heavyweights HDFC and ITC led gains for key benchmark indices. The barometer index, the S&P BSE Sensex, rose 149.78 points or 0.6% at 25,251.51, as per the provisional closing data. The gains for the Nifty 50 index were lower than the Sensex's gains in percentage terms. The Nifty rose 28.95 points or 0.38% at 7,735.50, as per the provisional closing data. The market witnessed intraday volatility. After extending gains in mid-afternoon trade after the passage of Finance Bill 2016 in the Lok Sabha, the two key benchmark indices pared gains later.
The Sensex rose 292.37 points or 1.16% at the day's high of 25,394.10 in mid-afternoon trade, its highest level since 3 May 2016. The barometer index rose 61.21 points or 0.24% at the day's low of 25,162.94 in morning trade. The Nifty rose 71 points or 0.92% at the day's high of 7,777.55 in mid-afternoon trade, its highest level since 3 May 2016. The index rose 0.30 points at the day's low of 7,706.85 in afternoon trade.
The Sensex and the Nifty snapped a three-day losing streak.
The Lok Sabha passed the Finance Bill 2016 today, 5 May 2016, after Finance Minister Arun Jaitley moved 55 amendments to the Bill. The government provided a thrust on the infrastructure, agriculture and rural sectors in the Union Budget 2016-17.
In overseas stock markets, European stock markets edged higher, buoyed by some solid corporate earnings at the likes of BT. Asian stocks edged lower on data showing slowdown in growth in China's services sector last month. However, the data triggered speculation of likely stimulus for the Chinese economy, thereby aiding recovery in mainland China. The Shanghai Composite index ended 0.22% higher. In Hong Kong, the Hang Seng index ended 0.37% lower. The China Caixin services purchasing managers' index (PMI) dropped to 51.8 in April from 52.2 in March. China's official non-manufacturing PMI, a competing gauge, fell to 53.5 in April from 53.8 in March, according to data released on 1 May 2016. China's economy is the world's second biggest economy.
US stocks edged lower yesterday, 4 May 2016, after weaker-than-expected private-sector job data. The ADP employment data showed that private payrolls across the US rose by 156,000 last month. The increase is the smallest since April 2013. The report is seen as a precursor to the top-tier nonfarm-payrolls data due on Friday, 6 May 2016. The nonfarm-payrolls data has implications for the US monetary policy. The US central bank's mandate centers on maximizing employment and keeping inflation at a 2% target level. The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 14-15 June 2016.
Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 1,321 shares declined and 1,231 shares rose. A total of 152 shares were unchanged. The BSE Mid-Cap index was provisionally down 0.09%. The BSE Small-Cap index was provisionally down 0.03%. Both these indices underperformed the Sensex.
Total turnover on BSE amounted to Rs 2328 crore, lower than turnover of Rs 2486.87 crore registered during the previous trading session.
Index heavyweight and cigarette major ITC rose 1.05% at Rs 316.10. The stock hit a high of Rs 320.20 and a low of Rs 311 in intraday trade.
Shares of Idea Cellular edged lower on concerns of increase in debt burden and interest costs after a foreign brokerage reportedly said in a research note that the company may spend about Rs 8627 crore ($1.3 billion) in adding data spectrum in key markets in the upcoming spectrum auction around July 2016. The stock was down 5.31% at Rs 113.25.
Bharti Airtel also edged lower on concerns of increase in debt burden and interest costs after this same foreign brokerage said in the research note that the company may selectively buy 4G airwaves in the coveted 700 Mhz band in a few circles in the upcoming spectrum auction around July 2016. The stock was down 1.66% at Rs 354.80.
Shares of Reliance Communications were down 1.55% at Rs 54.15.
Shares of telecom towers company Bharti Infratel were down 1.32% at Rs 396.65.
Capital goods stocks edged higher on renewed buying. Crompton Greaves (up 4.13%), Siemens (up 3.84%), L&T (up 2.24%), Bharat Heavy Electricals (up 2.71%), ABB India (up 0.76%), Thermax (up 0.84%) and Havells India (up 0.78%) edged higher. Bharat Electronics (down 0.13%), BEML (down 0.26%) and Alstom T&D India (down 0.9%) edged lower.
Eicher Motors edged higher in a volatile trade after announcing strong financial performance for the quarter ended 31 March 2016. The stock was up 0.15% to Rs 19,777.05. The stock hit a high of Rs 19,999 and a low of Rs 19,208 in intraday trade. The company's consolidated net profit rose 71.3% to Rs 334.50 crore on 46.6% growth in total income from operations to Rs 3764.90 crore in the quarter ended 31 March 2016 over the quarter ended 31 March 2015. The result was announced during market hours today, 5 May 2016.
Eicher Motors' Managing Director & CEO Siddhartha Lal said that the immediate business outlook for the Royal Enfield motorcycles business remains strong. Royal Enfield will invest Rs 600 crore during the year ending 31 March 2017 (FY 2017) towards product development, enhancing manufacturing capacity and market development activities across geographies and for setting up two technical centres - one in Leicestershire, UK and another in Chennai, India.
VE Commercial Vehicles, which is a joint venture of Eicher Motors with the Volvo group, intends to invest Rs 400 crore towards product development and capacity expansion in FY 2017. VE Commercial Vehicles makes trucks and buses.
Index heavyweight and housing finance major HDFC rose 2.58% at Rs 1,160.20, with the stock extending post-result gains. HDFC's net profit rose 39.98% to Rs 2607.05 crore on 23.72% growth in total income to Rs 9225.72 crore in Q4 March 2016 over Q4 March 2015. The surge in net profit was due to profit on sale of a part of its stake in the life insurance joint venture to the company's joint venture partner Standard Life. The company announced its Q4 March 2016 results during market hours on 2 May 2016.
HDFC after trading hours yesterday, 4 May 2016, announced that it intends to raise Rs 1135 crore through private placement of senior secured redeemable non-convertible debentures. HDFC said that the coupon rate of debentures is 8.34% per annum with a tenor of 2 years and 10 months. The issue opens and closes on the same day on 6 May 2016. The object of the issue is to augment the long-term resources of the company.
Adani Ports and Special Economic Zone (APSEZ) lost 4.65% at Rs 198 on reports that a foreign brokerage has reduced its price target on the stock, citing slowdown in the company's core port earnings growth. The brokerage has retained its hold rating on the stock. The APSEZ stock slumped yesterday, 4 May 2016, on equity dilution worries after the company's board of directors decided to seek shareholders' approval to raise funds by way of issue of equity shares/convertible bonds up to Rs 10000 crore. The stock had tumbled 11.97% to settle at Rs 207.65 yesterday, 4 May 2016. APSEZ's consolidated net profit rose 38.34% to Rs 914.06 crore on 18% increase in total income to Rs 2161.65 crore in Q4 March 2016 over Q4 March 2015. EBITDA (earnings before interest, taxes, depreciation and amortization) excluding other income rose 12% to Rs 1225 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours on 3 May 2016.
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