Key benchmark indices edged higher in early trade. At 9:25 IST, the barometer index, the S&P BSE Sensex was up 51.74 points or 0.19% at 26,719.70. The Nifty 50 index was currently up 20.05 points or 0.25% at 8,180.15.
In overseas stock markets, Asian stocks were trading mixed. US stocks closed mixed yesterday, 31 May 2016, as investors eyed economic reports for indications on the timing of the next rate hike. The Fed has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015. The Federal Open Market Committee next undertakes monetary policy review on 14-15 June 2016.
Closer home, the market breadth indicating the overall health of the market was strong. On BSE, 739 shares rose and 348 shares declined. A total of 53 shares were unchanged. The BSE Mid-Cap index was currently up 0.15%, underperforming the Sensex. The BSE Small-Cap index was currently up 0.22%, outperforming the Sensex.
Shares of public sector oil marketing companies (PSU OMCs) rose after announcing a hike in petrol and diesel prices. BPCL (up 1.4%), HPCL (up 1.09%) and Indian Oil Corporation (up 1.83%) edged higher. Indian Oil Corporation (IOCL) yesterday, 31 May 2016, announced an increase in the price of petrol and diesel with effect from the midnight of 31 May 2016. Petrol price was hiked by Rs 2.58 per litre and diesel price was raised by Rs 2.26 a litre at Delhi (including state levies) with corresponding price revision in other states. After the latest revision, petrol in Delhi costs Rs 65.60 per litre and diesel costs Rs 53.93 a litre.
In the global commodities markets, Brent for August settlement was currently down 38 cents at $49.51 a barrel.
Index heavyweight Reliance Industries (RIL) rose 0.08% at Rs 959.70. RIL announced that due to lower release of dam water and the significantly increased salinity of water supply to the company's Dahej manufacturing complex in district Bharuch of Gujarat, there is shortage of the right quality of industrial water at Dahej complex. As a response, RIL is running on reduced capacity in some of the plants and has temporarily shut down its PTA and PET plants. RIL has 2.3 MMTPA of PTA capacity and 650 KTPA of PET capacity at its Dahej manufacturing complex. RIL said it has initiated alternative arrangements for water and is closely monitoring the situation. It has also used the current situation to carry out planned maintenance and reliability activities. It is in a state of readiness to resume full supplies as soon as the water availability and water quality issues are resolved, the company said. RIL said it is ensuring a continued supply of PTA to the domestic market from its Hazira and Patalganga manufacturing complexes. The announcement was made after market hours yesterday, 31 May 2016.
Maruti Suzuki India (MSIL) rose 0.46% at Rs 4,187 after the company announced after market hours yesterday, 31 May 2016, that it will resume manufacture of vehicles at its Gurgaon facilities from second half of 1 June 2016. Certain operations in the Manesar campus, including casting and manufacture of transmissions, will also resume in the second half on 1 June 2016, MSIL said. Subros and MSIL are jointly working on options to obtain supply of components from other facilities and gradually bring operations back to normal, MSIL said. The company had to suspend operations at its facilities from second half of 29 May 2016, owing to a fire accident at the Manesar facilities of its supplier Subros.
Axis Bank was up 2.43% at Rs 528.15 after the Reserve Bank of India (RBI) yesterday, 31 May 2016, notified that Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) can now invest up to 62% of the paid-up capital of Axis Bank, from existing 49% under the Portfolio Investment Scheme (PIS). The central bank further notified that the total foreign investment from all sources i.e. Foreign Institutional Investors (FII)/Registered Foreign Portfolios Investors (RFPIs)/Foreign Direct Investment (FDI)/Non-Resident Indians (NRI)/ Persons of Indian Origin (PIO)/American Depository Receipts (ADR)/Global Depository Receipts (GDR) in the bank shall not exceed 62% of paid-up capital. The central bank has stated that Axis Bank has passed resolutions at its board of directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs/RFPIs. The purchases could be made through primary market and stock exchanges, RBI said.
Tata Steel rose 0.66% at Rs 336.65 after Tata Steel UK announced the completion of the sale of its Long Products Europe business to Greybull Capital LLP. With the completion of the transaction, the Long Products Europe business, which in the UK includes the Scunthorpe steelworks, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities, as well as a rail mill in northern France, will trade under the name of British Steel. All together the business employs 4,800 people viz. 4,400 in the UK and 400 in France.
Tata Steel Europe had put Tata Steel UK on the block due to the deteriorating financial performance of the UK subsidiary.
ONGC was up 0.66% at Rs 212.55 after the company announced after market hours yesterday, 31 May 2016, that its wholly-owned subsidiary, ONGC Videsh, on 31 May 2016 completed the acquisition of 15% stake in Russia's JSC Vankorneft from Rosneft Oil Company. JSC Vankorneft is a company organized under the law of Russian Federation, which is the owner of Vankor Field and North Vankor license. Rosneft, the national oil company of Russia continues to hold the remaining 85% shares of JSC Vankorneft.
Earlier in September 2015, ONGC Videsh had signed an agreement to acquire not less than 15% shares in JSC Vankorneft for $1268 million.
Vankor is Rosneft's (and Russia's) second largest field by production and accounts for 4% of Russian crude oil production. The daily peak production from the field is around 442,000 barrels of oil per day (bopd). With 15% shareholding, ONGC Videsh's share of daily oil production would be about 66,000 bopd.
The present transaction strengthens ONGC Videsh's presence in Russia and is consistent with its stated strategic objective of adding high quality international assets to its existing exploration & production (E&P) portfolio. This acquisition also has significant strategic importance to India, both in terms of augmentation of India's energy security, as well as adding a new dimension to the relationship between Rosneft and ONGC Videsh besides further strengthening the cooperation between the two countries, the Indian company said.
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