Gains for banking sector stocks, public sector companies and metal stocks offset losses for IT and telecom stocks, with key benchmark indices registering minuscule gains. The barometer index, the S&P BSE Sensex, rose 39.49 points or 0.16% to settle at 24,646.48. The 50-unit Nifty 50 index rose 9.75 points or 0.13% to settle at 7,485.35. The two key benchmark indices witnessed intraday volatility, swinging alternately between positive and negative zone. With fourth straight day of gains, the Sensex attained 4-1/2-week closing high and the Nifty reached 4-week closing high.
Metal and mining stocks gained as copper prices rose in global commodity markets and as iron ore prices scaled fresh four-month highs buoyed by firmer steel prices in China and expectations that the Chinese government will launch more measures to stimulate the economy. IT stocks edged lower as rupee edged higher against the dollar. Shares of public sector oil marketing companies (PSU OMCs) edged higher as recent gains in rupee against the dollar will help reduce cost of crude oil imports.
Dr Reddy's Laboratories extended previous trading session's gains triggered by the company receiving approval from the United States Food and Drug Administration (FDA) for Palonosetron Hydrochloride injection or Aloxi generic. Bharat Heavy Electricals (Bhel) moved higher after the company announced that it has successfully commissioned its first 700 megawatts (MW) supercritical thermal unit at Bellary Thermal Power Project (TPP) in Karnataka. Bharti Airtel and Idea Cellular edged lower on media reports that a foreign brokerage has reduced its earnings forecast for these two companies for three financial years starting from the current financial year in anticipation of increased spectrum costs and higher capex intensity.
In overseas stock markets, European stocks traded with small gains. Earlier during the global day, most markets in Asia edged higher after a batch of positive US economic data overnight. US stocks closed slightly higher yesterday, 3 March 2016, as oil prices stabilized. The latest data showed US factory orders rose in January after two straight monthly declines and the service sector index showed continued expansion.
The Sensex rose 39.49 points or 0.16% to settle at 24,646.48, its highest closing level since 1 February 2016. The index rose 112.06 points or 0.45% at the day's high of 24,719.05. The index lost 75.19 points or 0.3% at the day's low of 24,531.80.
The Nifty rose 9.75 points or 0.13% to settle at 7,485.35, its highest closing level since 5 February 2016. The index rose 30.30 points or 0.4% at the day's high of 7,505.90. The index lost 31.50 points or 0.42% at the day's low of 7,444.10.
The BSE Mid-Cap index rose 1.13%. The BSE Small-Cap index rose 0.75%. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,524 shares rose and 1,079 shares fell. A total of 145 shares were unchanged.
Among the sectoral indices on BSE, the S&P BSE Finance index (up 1.18%), the BSE Bankex index (up 1.28%), the BSE Metal index (up 2.15%), the BSE Power index (up 1.19%) and the BSE Realty index (up 1%) outperformed the Sensex. The S&P BSE IT index (down 0.46%), the BSE Telecom index (down 0.7%) and the BSE Teck index (down 0.41%) underperformed the Sensex.
Index heavyweight and housing finance major HDFC rose 0.44% at Rs 1,128.50 after the company said it has filed term sheet for issuing secured redeemable non-convertible debentures worth Rs 1000 crore on private placement basis. HDFC said that the coupon rate on debentures is nil. The instrument has a tenor of four years. With redemption premium of about Rs 39.89 lakh on the face value of Rs 1 crore for each debenture, the effective yield works out to 8.75% per annum. The issue opens and closes on the same day on 9 March 2016. The object of the issue is to augment long-term resources of the company, HDFC said. The announcement was made after market hours yesterday, 3 March 2016.
Asian Paints edged lower in volatile trade. The stock lost 1.48% at Rs 867.10. The stock hit a high of Rs 890 and a low of Rs 860.65 in intraday trade. Asian Paints after market hours yesterday, 3 March 2016, announced that the operations at the company's paint plant situated at Rohtak, Haryana, have restarted. The company had halted production at the unit from 19 February 2016 due to the agitation by the Jat community in the state for quota.
Pharma stocks rose on renewed buying. Divi's Laboratories (up 3.63%), Cipla (up 2.06%), Glenmark Pharmaceuticals (up 2.06%), Cadila Healthcare (up 1.58%), GlaxoSmithkline Pharmaceuticals (up 1.76%), Aurobindo Pharma (up 0.68%), Ipca Laboratories (up 0.65%) and Alkem Laboratories (up 0.52%) gained. Sun Pharmaceutical Industries (down 1.51%), Wockhardt (down 0.63%) and Lupin (down 0.38%) declined.
Dr Reddy's Laboratories (DRL) rose 1.74% at Rs 3,243.75, with the stock extending previous trading session's gains triggered by the company receiving approval from the United States Food and Drug Administration (FDA) for Palonosetron Hydrochloride injection or Aloxi generic. The stock surged 5.77% to settle at Rs 3,188.35 yesterday, 3 March 2016. Palonosetron Hydrochloride is used to treat chemotherapy induced nausea. In October 2015, DRL had entered into a settlement agreement with Helsinn Healthcare SA, a Switzerland-based pharma company for patent litigations related to Aloxi generic in the US. With this settlement, the company is permitted to market Aloxi generic on 30 September 2018 or earlier.
Auto stocks edged higher. Tata Motors (up 2.14%), Bajaj Auto (up 1.12%), TVS Motor Company (up 0.44%), Hero MotoCorp (up 0.39%) and Mahindra & Mahindra (up 0.22%) gained. Maruti Suzuki India (down 1.28%), Ashok Leyland (down 0.53%) and Eicher Motors (down 0.12%) declined.
Finance minister Arun Jaitley in the Union Budget 2016-17 early this week, imposed infrastructure cess of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs.
Metal and mining stocks gained as copper prices rose in global commodity markets and as iron ore prices scaled fresh four-month highs buoyed by firmer steel prices in China and expectations that the Chinese government will launch more measures to stimulate the economy. Vedanta (up 4.24%), JSW Steel (up 2.41%), Tata Steel (up 0.72%), Steel Authority of India (Sail) (up 1.01%), National Aluminium Company (up 2.46%), Hindustan Zinc (up 1.82%), Hindalco Industries (up 0.06%), NMDC (up 0.96%), Hindustan Copper (up 1.45%) edged higher. Jindal Steel & Power (down 0.24%) edged lower. China is the world's largest consumer of steel, copper and aluminum.
High Grade Copper for May 2016 delivery was currently up 1.04% at $2.2315 per pound on the COMEX.
Chinese Premier Li Keqiang will on Saturday, 5 March 2016, outline the government budget and official gross domestic product (GDP) target for 2016 at the opening of the National People's Congress (NPC). Li will also release a five-year development plan. The annual plenary session begins in Beijing on 5 March 2016 and runs through 16 March 2016. The annual meeting is China's biggest political event and primarily serves as a rubberstamp to the annual budget and various government reports.
Stocks of key public sector companies (PSU stocks) edged higher. Coal India (up 3.3%), Power Grid Corporation of India (up 2.29%), Rural Electrification Corporation (up 3.65%) and Bharat Electronics (up 2.25%) gained.
Bharat Heavy Electricals (Bhel) rose 4.03% at Rs 107.25 after the company announced that it has successfully commissioned its first 700 megawatts (MW) supercritical thermal unit at Bellary Thermal Power Project (TPP) in Karnataka. Bhel is presently executing a 1,600 MW supercritical thermal power project at Yeramarus and a 370 MW gas-based Yelahanka combined cycle power project in the state. The announcement was made during market hours today, 4 March 2016.
Shares of oil exploration and production (E&P) firms were mixed. ONGC (up 1.75%) and Oil India (up 0.15%) edged higher. Cairn India (down 1.35%) and Reliance Industries (down 0.6%) edged lower.
Shares of public sector oil marketing companies (PSU OMCs) edged higher as recent gains in rupee against the dollar will help reduce cost of crude oil imports. BPCL (up 3.61%) and HPCL (up 3.07%) rose. Indian Oil Corporation (down 1.23%) edged lower. India imports about 80% of its crude oil requirements and recent gains in rupee against the dollar will help reduce cost of imports.
Meanwhile, in the global commodities markets, Brent for May settlement was currently down 7 cents at $37 a barrel. The contract had risen 14 cents or 0.37% to settle at $37.07 a barrel during the previous trading session.
IT stocks edged lower as rupee edged higher against the dollar. HCL Technologies (down 2.74%), Tech Mahindra (down 2.1%), Wipro (down 0.98%), and Persistent Systems (down 0.16%) and TCS (down 0.77%) edged lower. Infosys (up 0.12%) and Oracle Financial Services Software (up 4.49%) rose. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.
In the foreign exchange market, the partially convertible rupee was currently hovering at 67.175, compared with its close of 67.335 during the previous trading session.
Meanwhile, the Union Budget 2016-17 is mixed for the technology and services sector. Industry association Nasscom believes, in the backdrop of global economic volatility, there are unmet expectations on policy announcements in the budget that enable ease of doing business for the IT sector. The budget partially covers its wish list on policy bottlenecks, including ease of business, nurturing start-ups, products and e-commerce sector. The budget also left IT services sector disappointed as various demands such as clarity on transfer pricing, exemption from minimum alternate tax (MAT) for SEZ units, relief from service tax and VAT double taxation have not been addressed. Domestic IT services and software companies such as TCS, Infosys, and Persistent Systems can look forward to service the technological initiatives announced in the budget and convert them into opportunities for growing their domestic business as well as help the government to increasingly digitize the economy.
Bharti Airtel and Idea Cellular edged lower on media reports that a foreign brokerage has reduced its earnings forecast for these two companies for three financial years starting from the current financial year in anticipation of increased spectrum costs and higher capex intensity. Idea Cellular lost 2.36% at Rs 105.70. Bharti Airtel shed 1% at Rs 330.10. The foreign brokerage reportedly said that Bharti Airtel and Idea Cellular are likely to face sustained cash flow challenges through FY 2016-18 amid pricing pressure, rising capex intensity on data network rollouts and mounting spectrum-linked costs.
Stocks of public sector banks (PSU banks) led upmove in banking sector stocks. Indian Bank (up 8.85%), IDBI Bank (up 4.2%), Punjab National Bank (up 4.93%), State Bank of India (up 3.23%), Union Bank of India (up 3.88%) and Bank of Baroda (up 2.48%) rose. Central Bank of India (down 0.81%) edged lower.
The finance ministry has convened a two-day conference in Gurgaon staring today, 4 March 2016, to provide an informal academic environment to take forward the government's commitment to reforms in the banking and financial sector. Top management of PSU banks, state-run insurance companies and other state-run financial institutions (FIs), finance sector regulators and finance ministry officials will participate in the second such conference called Gyan Sangam.
Meanwhile, the Union Budget 2016-17 disappointed the public sector banks by maintaining the allocation of capital funds unchanged at Rs 25000 crore for FY 2017 considering higher non-performing assets (NPAs) and weak earnings. On the flip side, the Budget has announced to operationalize Banks Board Bureau (BBB) in 2016-17, which will spell out a roadmap for consolidation of public sector banks.
Among private sector banks, IndusInd Bank (up 2.26%), ICICI Bank (up 1.19%), HDFC Bank (up 0.71%), Yes Bank (up 0.28%) and Kotak Mahindra Bank (up 1.57%) edged higher. Axis Bank (down 0.25%) edged lower.
The Reserve Bank of India (RBI) early this week announced relaxations on the treatment of certain balance sheet items for the purpose of determining banks' regulatory capital.
The Sensex and the Nifty edged higher for the fourth day in a row. The Sensex has surged 1,644.48 points or 7.14% in four trading days from its close of 23,002 on 29 February 2016. The Sensex has fallen 1,471.06 points or 5.63% in calendar year 2016 so far (till 4 March 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the Sensex has risen 2,151.87 points or 9.56%. The Sensex is off 5,378.26 points or 17.91% from a record high of 30,024.74 hit on 4 March 2015.
India's stock market remains closed on Monday, 7 March 2016, on account of Mahashivratri.
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