Key benchmark indices continued to hover in a small range with positive bias in early afternoon trade. At 12:20 IST, the barometer index, the S&P BSE Sensex was up 119.68 points or 0.45% at 26,645.14. The gains for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty was currently up 26.20 points or 0.32% at 8,166.95. Positive Asian stocks boosted sentiment on the domestic bourses.
In overseas markets, most Asian stocks were trading higher after the previous day's sell-off and a rebound on Wall Street, ahead of the UK's upcoming 23 June 2016 referendum vote on its future within the European Union. US stocks closed modestly higher yesterday, 16 June 2016 ending a five-day streak of losses with telecoms leading sector advancers. Meanwhile, the Bank of England yesterday, 16 June 2016 kept its key interest rate at a record low of 0.5% and made no changes to its 375-billion-pound ($530 billion) asset-purchase program. All nine rate-setting policy makers voted to hold rate unchanged. The decision marked the last before the 23 June 2016 referendum in the UK on whether the country should stay or exit the European Union (EU). A vote to leave the EU could materially alter the outlook for output and inflation, and therefore the appropriate setting of monetary policy, the BOE said in a statement. The interest rate decision was announced after close of Indian market hours yesterday, 16 June 2016.
Closer home, the market breadth, indicating the overall health of the market, was positive on BSE. 1,369 shares advanced and 933 shares declined. A total of 160 shares were unchanged. The BSE Mid-Cap index was currently up 0.24%, underperforming the Sensex. The BSE Small-Cap index was currently up 0.85%, outperforming the Sensex.
Metal and mining stocks were mostly higher as copper prices rose in global commodity markets. Vedanta (0.2%), Steel Authority of India (Sail) (up 0.33%), Hindustan Zinc (up 0.73%), Jindal Steel & Power (up 1.53%), NMDC (up 0.22%) and Hindustan Copper (up 0.38%) edged higher. Tata Steel (down 1.15%), National Aluminium Company (down 1.08%), JSW Steel (down 0.51%) and Hindalco Industries (down 0.08%) fell.
High Grade Copper for July 2016 delivery was currently up 0.9% at $2.0665 per pound on the COMEX.
FMCG stocks were mostly higher. GlaxoSmithkline Consumer Healthcare (up 0.26%), Dabur India (up 0.38%), Godrej Consumer Products (up 0.36%), Nestle India (up 0.16%), Tata Global Beverages (up 0.75%), Jyothy Laboratories (up 1.35%), Bajaj Corp (up 0.98%) rose.
Britannia Industries (down 1.28%), Colgate-Palmolive (India) (down 0.46%), Hindustan Unilever (down 0.36%), Marico (down 0.59%), Procter & Gamble Hygiene and Health Care (down 0.24%) fell.
Index heavyweight and housing finance major HDFC was up 1.27% after the company announced that the board of directors of HDFC Standard Life Insurance Company (HDFC Life), a material non listed subsidiary of the company, at its meeting held today, 17 June 2016, has approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a proposal for a potential combination through a merger of Max Life Insurance Company and Max Financial Services with HDFC Life by way of a scheme of arrangement. The announcement was made during market hours today, 17 June 2016.
Max Financial Services was up 13.62% after the company announced that the board of directors of the company at its meeting held today, 17 June 2016, approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a potential combination through a merger of Max Life Insurance Company Limited and Max Financial Services into HDFC Standard Life Insurance Company by way of a scheme of arrangement. The agreement provides for a mutually agreed exclusivity period for due diligence and discussions between the parties in relation to the proposed transaction. The proposed arrangements would be subject to due diligence, definitive documentation and applicable board, shareholder, regulatory, respective High Courts / NCLT, and other third party approvals, as may be applicable, Max Financial Services said. The announcement was made during market hours today, 17 June 2016.
Max Life is a joint venture between Max Financial Services and Mitsui Sumitomo Insurance (MSI), a Japan headquartered global leader in insurance. Max Financial Services holds 68.01% equity in Max Life, while MSI holds 26%.
HDFC Standard Life Insurance Company (HDFC Life) is a partnership between HDFC, India's leading housing finance institution and Standard Life, a global long term investment savings player. Currently HDFC holds 61.63% and Standard Life (Mauritius Holdings) 2006 holds 35% of equity in HDFC Life, while the rest is held by others.
On the macro front, India's current account deficit (CAD) narrowed sharply to $0.3 billion (0.1% of GDP) in Q4 of 2015-16, significantly lower than $7.1 billion (1.3% of GDP) in Q3 of 2015-16 and marginally lower than $0.7 billion (0.1% of GDP) in Q4 of 2014-15. The contraction in CAD was primarily on account of a lower trade deficit ($24.8 billion) than in Q4 of last year ($31.6 billion) and $34 billion in the preceding quarter. The government announced the economic data after market hours yesterday, 16 June 2016.
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