A bout of volatility was witnessed as key benchmark indices trimmed losses after extending intraday losses in mid-afternoon trade. At 14:15 IST, the barometer index, the S&P BSE Sensex, was down 172.94 points or 0.68% at 25,264.03. The losses for the Nifty 50 index were lower than those for the Sensex in percentage terms. The Nifty was currently down 47.65 points or 0.61% at 7,758.25. Weakness in global stocks hit sentiment on the domestic bourses adversely.
The Sensex fell 232.75 points or 0.91% at the day's low of 25,204.22 in mid-afternoon trade, its lowest level since 12 April 2016. The barometer index rose 268.99 points or 1.05% at the day's high of 25,705.96 in early trade, its highest level since 29 April 2016. The Nifty fell 70.75 points or 0.9% at the day's low of 7,735.15 in mid-afternoon trade, its lowest level since 12 April 2016. The index rose 84.35 points or 1.08% at the day's high of 7,890.25 in early trade, its highest level since 28 April 2016.
The market breadth indicating the overall health of the market turned negative from positive in mid-afternoon trade. On BSE, 1,256 shares declined and 1,199 shares rose. A total of 155 shares were unchanged. The BSE Mid-Cap index was currently down 0.54%. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index was currently up 0.18%, outperforming the Sensex.
In overseas stock markets, European shares edged lower with Commerzbank leading the market lower after a profit slump, while mining stocks weakened as they tracked a decline in metals prices. Trading in US stock index futures pointed to losses for US stocks at the opening bell. Trading in US index futures indicated that the Dow Jones Industrial Average could slide 102 points at the opening bell today, 3 May 2016. US stocks closed higher yesterday, 2 May 2016, after data showed slow-but-steady economic growth unfolding in the US. Latest data from the Institute for Supply Management showed manufacturing index in US fell to 50.8 last month from 51.8 in March. The reading, coming in above 50, indicates expansion in manufacturing activity, albeit at a slower-than-expected pace. Meanwhile, the San Francisco Federal Reserve President John Williams reiterated yesterday, 2 May 2016, his view that the US economy is ready for higher interest rates, but flagged the risk of broad-based declines in asset prices as a result.
Asian stocks witnessed a mixed trend. Chinese stocks saw a divergent trend after the latest data showed deceleration in China's manufacturing activity in April 2016. In mainland China, the Shanghai Composite ended 1.85% higher. In Hong Kong, the Hang Seng index closed 1.85% lower. The Caixin China general manufacturing purchasing managers' index fell to 49.4 in April 2016 from 49.7 in March 2016. A reading below 50 indicates economic contraction. China's official manufacturing PMI, a competing gauge, came in at 50.1 in April 2016 compared with 50.2 in March 2016, according to data released by the National Bureau of Statistics on 1 May 2016. Meanwhile, Chinese leaders have called for strengthening the supervision of stock market and protecting investor interests, according to reports.
Index heavyweight and cigarette major ITC was down 1.23% at Rs 316.95. The stock hit a high of Rs 323.25 and a low of Rs 314.50 so far during the day.
Index heavyweight and software major Infosys fell 1.45% at Rs 1,183.30. The stock hit a high of Rs 1,212.05 and a low of Rs 1,174.30 so far during the day.
Metal and mining stocks witnessed a mixed trend. Jindal Steel & Power (down 1.77%), Steel Authority of India (down 2.11%), Hindalco Industries (down 0.86%), Hindustan Copper (down 0.64%), JSW Steel (down 0.3%) and Hindustan Zinc (down 0.17%) edged lower. NMDC (up 0.36%), National Aluminium Company (up 1.83%), Tata Steel (up 0.92%) and Vedanta (up 1.58%) edged higher.
Copper prices declined in global commodities markets. High Grade Copper for July 2016 delivery was currently down 0.53% at $2.2545 per pound on the COMEX.
Meanwhile, the Rajya Sabha yesterday, 2 May 2016, passed the Mines and Minerals (Development and Regulation) (Amendment) Bill, 2016. The bill has already been passed in the Lok Sabha. Once the bill becomes a law after the President's signature, it will allow companies to transfer captive mines attached to a manufacturing unit along with the sale of the unit in case of mergers and acquisitions (M&A). In 2015, the government brought the Mines and Minerals (Development and Regulation) Amendment Bill, replacing a 1957 legislation, which stipulated that mining licences could only be auctioned. This amended law allowed transfer of mines allotted through auctions but was silent on captive mining licences handed out in the past on the basis of recommendations of a screening committee.
Capital goods stocks edged lower. Suzlon Energy (down 1.61%), Havells India (down 1.63%), Bharat Electronics (down 0.75%), Praj Industries (down 1.13%), ABB India (down 1.24%), Crompton Greaves (down 0.26%) and Thermax (down 0.05%) declined. Siemens (up 0.44%), L&T (up 1.11%), Alstom T&D India (up 1.47%) and BEML (up 0.41%) edged higher.
Bharat Heavy Electricals (Bhel) was off 1.06% at Rs 126.45. The company during market hours today, 3 May 2016, announced that it has successfully commissioned a 600 megawatts (MW) coal-based thermal power plant in Madhya Pradesh. The unit has been commissioned at the 600 MW Jhabua thermal project in Seoni district in Madhya Pradesh. This project is being developed by Jhabua Power (JPL), a subsidiary of Avantha Power & Infrastructure (APIL).
Index heavyweight and housing finance major HDFC rose 0.72% at Rs 1,100.65, with the stock extending post-result gains. The stock had risen 0.36% to settle at Rs 1,092.75 yesterday, 2 May 2016, after the company announced Q4 March 2016 results during market hours on that day. 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.
Meanwhile, HDFC during market hours today, 3 May 2016 said it proposes to raise Rs 500 crore through issue of secured redeemable non-convertible debentures (NCD) on private placement basis. The coupon rate on debentures is 8.32% per annum with a tenor of 10 years. The issue opens and closes on 4 May 2016. The object of the issue is to augment the long-term resources of the company, HDFC said. The proceeds of the present issue would be utilized for financing/refinancing the housing finance business requirements of the company, it added.
On the macro front, data released by the government after market hours yesterday, 2 May 2016, showed that the core sector registered a strong growth of 6.4% in March 2016 over March 2015. The eight core industries comprising of coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity have nearly 38% weightage in the index of industrial production (IIP). The core sector registered a growth of 2.7% in the year ended 31 March 2016 over the year ended 31 March 2015.
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