The movement for the two key benchmark indices remained confined to a narrow range in afternoon trade. At 13:15 IST, the barometer index, the S&P BSE Sensex, was down 32.98 points or 0.12% at 26,680.95. The Nifty 50 index was currently down 12.90 points or 0.16% at 8,167.05. The market breadth indicating the overall health of the market was negative. On BSE, 1,033 shares rose and 1,355 shares declined. A total of 155 shares were unchanged. The BSE Mid-Cap index was currently up 0.26%. The BSE Small-Cap index was currently up 0.02%. Both these indices outperformed the Sensex.
In overseas stock markets, European equities witnessed a mixed trend ahead of the outcome of the European Central Bank's (ECB) policy meeting later in the global day. The ECB is widely expected to keep its monetary policy unchanged but will probably raise growth and inflation forecasts. The central bank's President Mario Draghi will hold a press conference after the policy decision is announced.
Asian stocks edged higher after the latest data signalled the US economy is recovering. The US economy is the world's biggest economy. Japanese stocks edged lower as the yen strengthened against the dollar. The Nikkei 225 Average settled 2.32% lower. A stronger yen hurts the competitiveness of Japanese exporters. Japan's Prime Minister Shinzo Abe yesterday, 1 June 2016, said that a sales-tax increase will be postponed until 2019 from April 2017.
US stocks eked out minuscule gains yesterday, 1 June 2016, following an intraday recovery in oil prices and better-than-expected manufacturing data. The Institute for Supply Management said its manufacturing index rose to 51.3% last month from 50.8% in April. The data showed that manufacturers are expanding their businesses at a very slow pace.
Power generation stocks edged lower. Jaiprakash Power Ventures (down 2.88%), NHPC (down 1.67%), GMR Infrastructure (down 1.51%), Torrent Power (down 1.33%), JSW Energy (down 1.06%), CESC (down 0.55%), Reliance Power (down 0.1%) and NTPC 0.14%), edged lower. Reliance Infrastructure (up 1.03%) and Adani Power (up 1.51%), edged higher.
Tata Power Company (Tata Power) was down 0.62% at Rs 72.40. Maithon Power (MPL), a 74:26 joint venture between the company and Damodar Valley Corporation (DVC), today, 2 June 2016, announced that its power generation rose 7% to 7,172 million units in FY 2016 over FY 2015. The power project is located at Maithon in Jharkhand with a total capacity of 1,050 megawatts (MW). The project supplies power to three states namely Delhi, West Bengal and Kerala as also to DVC as per long term power purchase agreement.
Pharmaceutical shares were mixed. Cadila Healthcare (down 2.97%), IPCA Laboratories (down 2.08%), Glenmark Pharmaceuticals (down 1.32%), Sun Pharmaceutical Industries (down 1.32%), Lupin (down 1.29%), Aurobindo Pharma (down 0.95%), Strides Shasun (down 0.51%), Dr Reddy's Laboratories (down 0.38%) and GlaxoSmithKline Pharmaceuticals (down 0.24%) edged lower. Alkem Laboratories (up 0.37%), Cipla (up 0.39%), Piramal Enterprises (up 0.47%), Wockhardt (up 0.47%) and Divi's Laboratories (up 0.87%) edged higher.
Meanwhile, the central government yesterday, 1 June 2016, announced increase ranging from 1.5% to 9.2% in the minimum support prices (MSPs) of Kharif crops for the 2016-17 season. The MSPs include a bonus of Rs 425 per quintal for pulses, namely Arhar (Tur), Urad and Moong, a bonus of Rs 200 per quintal for Sesamum and a bonus of Rs 100 per quintal for other kharif oilseeds namely, Groundnut-in-shell, Sunflowerseed, Soyabean, and Nigerseed. The government said in a statement that the decision to offer bonus over MSP on pulses and oilseeds is aimed at giving a strong price signal to farmers to increase acreage and invest for increase in productivity of these crops. There is an increasing gap between the demand and domestic supply of pulses and oilseeds and the reliance on import is increasing. The increase in cultivation of leguminous pulses and oilseeds will also have additional environmental benefits as these crops are less water consuming and help in nitrogen fixation in the soil.
With a view to stabilize prices of pulses, the government is also creating buffer stocks of pulses through both domestic procurement and import.
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