Volatility continued in morning trade as the key benchmark indices traded near flat line with divergent trend following mixed cues from Asian stocks. At 10:21 IST, the barometer index, the S&P BSE Sensex was down 5.94 points or 0.02% to 27,924.27. The Nifty 50 index was currently up 6.70 points or 0.08% at 8,632.40.
The Sensex rose 61.68 points or 0.22% at the day's high of 27,991.89 at onset of the day's trading session. The barometer index fell 58.06 points or 0.21% at the day's low of 27,872.15 in early trade, its lowest level since 28 October 2016. The Nifty rose 27.70 points or 0.32% at the day's high of 8,653.40 trade at onset of the day's trading session. The index fell 11.20 points or 0.13% at the day's low of 8,614.50 in early trade, its lowest level since 28 October 2016.
In overseas stock markets, Chinese stocks were trading higher after the release of encouraging purchasing managers index data from China. Other Asian stocks were trading mixed. China's official manufacturing PMI rose to 51.2 in October from 50.4 in September, adding to signs that the world's second-largest economy is stabilizing. China's official non-manufacturing purchasing managers index, a measure of activity outside factory gates, edged up to 54 in October from 53.7 in September. The Caixin manufacturing PMI for China was 51.2 in October, up from 50.1 in September. Japan's central bank largely held fire in a policy update today, 1 November 2016. The Bank of Japan (BOJ) said it would keep its deposit rate steady at -0.1%, and would continue to target a zero yield for 10-year Japan government bonds. Its only notable move was to push back the timeline for achieving 2% inflation by one year, to fiscal 2018. US stocks closed lower yesterday, 31 October 2016 as stronger-than-expected consumer spending data underlined the view that the economy is growing at a steady pace, while a drop in oil prices and election uncertainty weighed on the minds of investors.
Closer home, the market breadth indicating the overall health of the market was just about positive. On BSE, 1,099 shares rose and 1,046 shares fell. A total of 68 shares were unchanged. The BSE Mid-Cap index was currently up 0.11%, outperforming the Sensex. The BSE Small-Cap index was currently down 0.08%. The fall in this index was higher than the Sensex's decline in percentage terms.
Metal and mining stocks rose after the release of encouraging purchasing managers index data from China, the world's largest consumer of steel, copper and aluminum.
Vedanta (up 3.41%), National Aluminium Company (up 0.82%), Hindustan Zinc (up 5.66%), Jindal Steel & Power (up 0.27%), Hindalco Industries (up 2.5%), NMDC (up 2.7%) and Hindustan Copper (up 1.25%) edged higher. JSW Steel (down 0.58%) and Steel Authority of India (Sail) (down 0.29%) fell.
Copper edged lower in the global commodities market. High Grade Copper for December 2016 delivery was currently up 0.2% at $2.2095 per pound on the COMEX.
Tata Steel rose 0.32%. The company announced yesterday, 31 October 2016 that ratings agency Brickwork Ratings downgraded the company's credit rating to BWR AA from BWR AA+, with negative outlook for the unsecured non-convertible debenture (NCD) issues of Rs 4000 crore. The ratings agency also downgraded ratings to BWR AA- from BWR AA for the company's unsecured subordinated perpetual debt issues of Rs 2500 crore, with negative outlook. The sudden change of guard at the holding company/group level has not only heightened the management risk for Tata Steel, but also has exposed it to uncertainty over continuity of critical decisions on cost cutting and deleveraging the balance sheet concerning the unprofitable UK operations and restructuring its European business, the ratings agency said. Unless the company takes appropriate measures in this regard, it may lead to a further deterioration in financial profile of the company, as also a rating action, the agency added.
In economic data, China's official manufacturing PMI rose to 51.2 in October from 50.4 in September, adding to signs that the world's second-largest economy is stabilizing. China's official non-manufacturing purchasing managers index, a measure of activity outside factory gates, edged up to 54 in October from 53.7 in September. The Caixin manufacturing PMI for China was 51.2 in October, up from 50.1 in September.
Telecom stocks were mixed. Idea Cellular (up 0.2%), MTNL (up 2.02%) and Reliance Communications (up 0.11%) rose. Bharti Airtel (down 0.17%) and Tata Teleservices (Maharashtra) (down 0.28%) fell.
Shares of Bharti Infratel rose 2.21%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.
Among macro economic data, Markit Economics will announce the India Manufacturing Purchasing Managers' Index (PMI) data for October 2016 today, 1 November 2016. The seasonally adjusted Nikkei India Manufacturing PMI fell to 52.1 in September from 52.6 in August.
The growth in the Index of Eight Core Industries stood at 5% in September 2016, stronger than the 3.2% growth seen in August, data released by the government yesterday, 31 October 2016 showed. The Eight Core Industries comprise nearly 38% of the weight of items included in the Index of Industrial Production (IIP).
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