Key benchmark indices hovered between gains and losses near the flat line after cutting losses in mid-afternoon trade. At 14:20 IST, the barometer index, the S&P BSE Sensex was up 42.90 points or 0.15% at 27,870.43. The Nifty 50 index was up 9.70 points or 0.11% at 8,600.95.
Key indices rose on bargain hunting after suffering steep losses yesterday, 29 September 2016 triggered by flare up in India-Pakistan tension after Indian Army in a press conference yesterday, 29 September 2016 revealed that it conducted surgical strikes against terror launchpads inside Pakistan occupied Kashmir. However, gains were capped by weakness in global stocks.
The broad market depicted strength. There were more than two gainers against every loser on BSE, 1,785 shares rose and 740 shares fell. A total of 186 shares were unchanged. The BSE Mid-Cap index was currently up 1.64%. The BSE Small-Cap index was currently up 1.6%. Both these indices outperformed the Sensex.
In overseas stock markets, European stocks were sharply lower as shares of Deutsche Bank AG traded at the weakest level on record, triggering losses across the financial sector. Asian stocks fell tracking lower finish for US stocks yesterday, 29 September 2016 as Deutsche Bank shares slumped to a record low after a report that trading clients had withdrawn excess cash and positions held in the largest German lender. The cause of Deutsche's crisis is a fine, disputed by Deutsche, of up to $14 billion by the US Department of Justice over its sale of mortgage-backed securities.
Meanwhile, revised data suggest that the US economy's performance in the spring was slightly better than expected, as business investment wasn't nearly as weak as previously reported. The gross domestic product grew a 1.4% pace in the second quarter. Philadelphia Federal Reserve President Patrick Harker said he backs a December rate increase if the economy continues to grow as expected, while Atlanta Fed President Dennis Lockhart said he expects the Fed to be in a position to raise rates soon. Fed Gov. Jerome Powell on the other hand said the Fed can afford to be patient in gradually raising rates as the economy slowly improves.
Pharma stocks were mixed. Sun Pharmaceutical Industries (up 0.07%), Aurobindo Pharma (up 3.56%), Lupin (up 0.48%), Wockhardt (up 1.2%), Glenmark Pharmaceuticals (up 0.58%) and Cadila Healthcare (up 0.79%) gained. Dr Reddy's Laboratories (down 0.55%), and Divi's Laboratories (down 0.45%) declined.
Cipla fell 3.15% after the company said the US drug regulator issued four observations across three facilities in Goa. The announcement was made during trading hours today, 30 September 2016. Cipla said that United States Food and Drug Administration (USFDA) recently concluded audit of the company's three manufacturing facilities at Goa and issued 4 observations across these three facilities. These observations were primarily procedural in nature and the company has already responded to these observations. Cipla said it continues to operate its facilities with a high level of compliance and control.
Alkem Laboratories slumped 6.65% after the company said it has received 13 observations from the US drug regulator for the manufacturing facility at Daman. The announcement was made after market hours yesterday, 29 September 2016. The company said that US Food and Drug Administration (USFDA) had conducted an inspection at the company's manufacturing facility located at Daman, India from 20 September 2016 to 29 September 2016. In this regard, the company has received the inspection report which contains thirteen 483 observations. The company said it will put together a detailed response with adequate corrective and preventive measures to address the USFDA observations and the same is proposed to be filed within the timeline stipulated by USFDA.
Bank stocks gained. Among public sector banks, UCO Bank (up 0.83%), Syndicate Bank (up 0.01%), Punjab National Bank (up 2.12%), Allahabad Bank (up 0.53%), Bank of Baroda (up 2.63%), State Bank of India (SBI) (up 0.83%), Union Bank of India (up 0.63%), Canara Bank (up 2.69%), Bank of India (up 2.47%) and United Bank of India (up 0.99%) edged higher.
Corporation Bank rose 0.48% after the bank announced lending rates based on marginal cost of funds to be effective from 1 October 2016. The announcement was made after market hours yesterday, 29 September 2016. Corporation Bank's Marginal Cost of Funds based Lending Rate (MCLR) for overnight loans will be 9.05%, for one month will be 9.15% and for three months will be 9.30%. The MCLR on 6-month loans will be 9.40% and for one-year loans the rate would be 9.50%, the bank said.
Among private sector banks, Axis Bank (up 0.11%), ICICI Bank (up 0.14%), Kotak Mahindra Bank (up 0.25%), Federal Bank (up 1.28%), and Yes Bank (up 1.22%) gained. IndusInd Bank (down 0.61%) and HDFC Bank (down 0.14%) declined.
Meanwhile, the Reserve Bank of India Act, 1934 (RBI Act) has been amended by the Finance Act, 2016, to provide for a statutory and institutionalized framework for a Monetary Policy Committee, for maintaining price stability, while keeping in mind the objective of growth and notified yesterday, 29 September 2016. The Monetary Policy Committee would be entrusted with the task of fixing the benchmark policy rate (repo rate) required to contain inflation within the specified target level. A Committee-based approach for determining the Monetary Policy will add lot of value and transparency to monetary policy decisions. The meetings of the Monetary Policy Committee shall be held at least 4 times a year and it shall publish its decisions after each such meeting. The factors constituting failure to meet inflation target under the Monetary Policy Committee Framework have also been notified. The Government, in consultation with RBI, has notified the inflation target in the Gazette of India Extraordinary dated 5 August 2016 for the period beginning from the date of publication of this notification and ending on the 31 March 2021, with inflation target of 4% with upper and lower tolerance level of 2%.
As per the provisions of the RBI Act, out of the six members of Monetary Policy Committee, three members will be from the RBI and the other three members of MPC will be appointed by the Central Government. The members of the Monetary Policy Committee appointed by the Central Government shall hold office for a period of four years, with immediate effect or until further orders, whichever is earlier.
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