Volatility continued as key benchmark indices once again slipped into the red from green in afternoon trade. At 13:17 IST, the barometer index, the S&P BSE Sensex, was down 1.75 points or 0.01% at 24,823.08. The losses for the 50-unit Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was currently down 10.55 points or 0.14% at 7,545.40. Key indices turned volatile in the aftermath of the Reserve Bank of India's (RBI) decision to keep its benchmark interest rate viz. the repo rate unchanged at 6.75% after a monetary policy review.
The Sensex rose 103.92 points or 0.41% at the day's high of 24,928.75 in early afternoon trade. The index lost 114.84 points or 0.46% at the day's low of 24,709.99 in mid-morning trade, its lowest level since 29 January 2016. The Nifty rose 20.35 points or 0.26% at the day's high of 7,576.30 in early afternoon trade. The index lost 47.05 points or 0.62% at the day's low of 7,508.90 in mid-morning trade, its lowest level since 29 January 2016.
The market breadth indicating the overall health of the market once again turned negative from positive. On BSE, 1,226 shares fell and 1,179 shares rose. A total of 109 shares were unchanged. The breadth has alternately turned positive and negative since mid-morning trade.
The BSE Mid-Cap index was currently down 0.13%. The decline for this index was higher in percentage terms than the Sensex's decline. The BSE Small-Cap index was currently up 0.14%, outperforming the Sensex.
While retaining accommodative stance of the monetary policy, RBI Governor Raghuram Rajan said in a statement that structural reforms in the Union Budget 2016-17 that boost growth while controlling spending will create more space for monetary policy to support growth. With unfavourable base effects on the ebb and benign prices of fruits and vegetables and crude oil, the January 2016 consumer price inflation target of 6% should be met, the RBI said. Consumer price inflation stood at 5.61% in December 2015.
Going forward, under the assumption of a normal monsoon and the current level of international crude oil prices and exchange rates, inflation is expected to be inertial and be around 5% by the end of fiscal 2016-17, RBI said. However, the implementation of the VII Central Pay Commission award, which has not been factored into these projections, will impart upward momentum to this trajectory for a period of one to two years, the RBI said. The RBI kept the cash reserve ratio (CRR) unchanged at 4% of net demand and time liability (NDTL).
According to Rajan, the current momentum of economic growth in India is reasonable but it is below what should be expected over the medium term. The RBI has retained the projected growth in GVA (Gross Value Added) unchanged at 7.4% for 2015-16 with a downside bias. The central bank expects acceleration in GVA growth to 7.6% in 2016-17. Expectations of a normal monsoon after two consecutive years of rainfall deficiency, the large positive terms of trade gain, improving real incomes of households and lower input costs of firms should contribute to strengthening the growth momentum.
Auto stocks gained after the RBI kept the repo rate unchanged after the latest policy review. Ashok Leyland (up 1.42%), Maruti Suzuki India (up 0.45%), and TVS Motor Company (up 1.2%) gained. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.
Tata Motors rose 0.04% after the company said total sales of Tata Motors passenger and commercial vehicles rose 10% at 47,034 vehicles in January 2016 over January 2015. The announcement was made by the company after market hours yesterday, 1 February 2016. The domestic sales of Tata commercial and passenger vehicles rose 7% at 41,398 units in January 2016 over January 2015. In commercial vehicles, medium & heavy commercial vehicles (MHCV) sales grew 30% at 14,693 units in January 2016 over January 2015. The light & small commercial vehicle sales has witnessed a growth of 12% at 15,977 units in January 2016 over January 2015. Tata Motors' sales of commercial vehicles in domestic market rose 20% at 30,670 units in January 2016 over January 2015. This significant increase has been enabled by light commercial vehicles (LCV) growth supplementing the already prevailing M&HCV growth. This is the second consecutive month of growth in LCVs, after many months, and if sustained, could see return of growth in this segment, albeit on a low base, company said.
Tata Motors' passenger vehicles sales fell 18% at 10,728 units in January 2016 over January 2015. The company's sales from exports rose 42% to 5,636 units in January 2016 over January 2015.
Mahindra & Mahindra (M&M) rose 0.09% after the company announced that it has completed the sale of equity shares in its subsidiary Swaraj Automotives. M&M said it has received a consideration of Rs 24.83 crore from the sale of shares. The announcement was made after market hours yesterday, 1 February 2016.
Bajaj Auto gained 1.2%. The company's total sales rose 2% to 2.93 lakh units in January 2016 over January 2015. Sales of motorcycles rose 2% to 2.52 lakh units in January 2016 over January 2015. Sales of commercial vehicles declined 2% to 40,951 units in January 2016 over January 2015. Exports dropped 8% to 1.32 lakh units in January 2016 over January 2015. The company announced the sales volume data before market hours today, 2 February 2016.
Hero MotoCorp declined 0.08% to Rs 2,522.25. The stock was volatile after the company reported monthly sales figures. The stock hit high of Rs 2,545.50 and low of Rs 2,510.25 so far during the day. The company said its two-wheeler sales rose 0.89% at 5.63 lakh units in January 2016 over January 2015. Riding on the success of scooter range, driven by the new Maestro Edge and Duet, the company continues to expand its market share in the scooter segment, Hero MotoCorp said. Hero MotoCorp scooter sales rose 20% in January 2016 over January 2015.
Cement stocks were mixed. ACC (down 0.19%) and Ambuja Cements (down 0.83%) declined. Shree Cement (up 0.16%) and UltraTech Cement (up 0.17%) gained.
Grasim Industries rose 0.19%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Tata Elxsi (up 5.44%), Union Bank of India (up 4.66%), IFCI (up 4.49%), Shriram City Union Finance (up 4.11%) and Vakrangee (up 3.73%) were the major gainers from the BSE's 'A' group.
In overseas stock markets, Asian equities edged lower on fresh weakness in oil prices. But Chinese stocks edged higher after the country's central bank injected more liquidity into the financial system, in a move to stave off potential liquidity squeezes ahead of the weeklong Lunar New Year holiday that starts on 7 February 2016. The Shanghai Composite index settled 2.26% higher. US stocks pared sharp opening losses to finish nearly unchanged for the day yesterday, 1 February 2016, as weak US manufacturing data were taken as an indication that the Federal Reserve will hold off on its plans to raise interest rates later this year.
Powered by Capital Market - Live News
