A divergent trend continued on the domestic bourses in early afternoon trade as the S&P BSE Sensex regained positive terrain after slipping into the red for a brief period while the Nifty 50 index hovered in the negative terrain. Both the indices traded near the flat line. At 12:18 IST, the barometer index, the S&P BSE Sensex was up 5.99 points or 0.02% at 27,171.87. The Nifty was down 10.50 points or 0.13% at 8,325.45.
In overseas stock markets, Asian stocks were mixed as investors became cautious ahead of the release of the influential monthly US nonfarm payroll report. The US government will announce nonfarm payroll report for June 2016 tomorrow, 8 July 2016. US stocks rose yesterday, 6 July 2016, recovering from previous sessions' fall as the most beaten-down sectors in recent weeks logged the biggest gains. The Institute for Supply Management's nonmanufacturing purchasing managers index rose in June to its highest reading since November, a turnaround from earlier in the year. The minutes from the Federal Reserve's June meeting revealed a split among officials about the health of the economy and how to proceed on interest rate decisions. The officials at the June meeting sparred over the health of the labor market, the outlook for growth and whether inflation is picking up. They agreed that it was prudent to wait for additional economic data before deciding when to raise interest rates.
Closer home, the market breadth indicating strength of the market was positive. On BSE, 1,466 shares rose and 1,016 shares fell. A total of 128 shares were unchanged The BSE Mid-Cap index was down 0.12%, underperforming the Sensex. The BSE Small-Cap index was currently up 0.32%, outperforming the Sensex.
Metal & mining stocks gained. Bhushan Steel (up 0.94%), Hindustan Copper (up 7.79%), Hindalco Industries (up 3.56%), Hindustan Zinc (up 0.97%), Jindal Steel & Power (up 0.62%), Steel Authority of India (Sail) (up 0.42%), and National Aluminum Company (up 1.03%) gained. JSW Steel (down 0.31%) and Tata Steel (down 0.45%) declined.
Stocks of mining companies rose after Piyush Goyal was given additional charge of the mines ministry (Independent Charge). Vedanta (up 3.1%) and NMDC (up 0.52%) gained. The reshuffle of the portfolios has seen Chaudhary Birender Singh getting the steel ministry. Narendra Singh Tomar was earlier holding both mines and steel ministry portfolios.
The BSE Metal index had outperformed the market over the past month till 5 July 2016, rising 8.49% compared with Sensex's 1.21% rise. The index also outperformed the market in past one quarter, gaining 19.85% as against Sensex's 9.18% gain.
High Grade Copper for September 2016 delivery was currently down 0.19% at $2.1495 per pound on the COMEX.
Capital goods stocks were mixed. BEML (up 0.16%), Bharat Heavy Electricals (Bhel) (up 0.47%), and Thermax (up 2.28%) rose. Havells India (down 2.33%), L&T (down 0.87%), Crompton Greaves (down 0.34%) and Siemens (down 0.44%) declined.
The BSE Capital Goods index had outperformed the market over the past month till 5 July 2016, rising 7.46% compared with Sensex's 1.21% rise. The index also outperformed the market in past one quarter, gaining 21.68% as against Sensex's 9.18% gain.
Axis Bank rose 1.05% to Rs 545.35 after the Union Cabinet approved increase in the ceiling on foreign investment in the private sector bank to 74% of equity capital on a fully fungible basis from 62% earlier. With the hike in foreign investment ceiling, foreign direct investment to the tune of Rs 12973.14 crore will be received in the country with an estimated creation of 6,000 to 7,000 jobs over the next three years, according to a government statement. Foreign institutional investors held 40.86% stake in Axis Bank as on 31 March 2016. The holding through Global Depository Receipts (GDR) in the bank stood at 3.36% as on 31 March 2016.
Meanwhile, shares of Axis Bank turned ex-dividend today, 7 July 2016, for dividend of Rs 5 per share for the year ended 31 March 2016. Before turning ex-dividend, the stock offered a dividend yield of 0.91% based on its closing price of Rs 543.90 on the BSE on Tuesday, 5 July 2016. The stock market was closed yesterday, 6 July 2016, for a holiday.
3i Infotech rose 4.78% to Rs 5.35 after the company said that a special committee of the board has approved issuing new foreign currency convertible bonds in exchange for two separate sets of existing FCCBs. The company announced that a special committee of the board of directors entrusted with the task of restructuring the company's foreign currency convertible bonds (FBBCs) approved issuing new FCCBs of up to $52 million in exchange for the existing $125.35 million 5% FCCBs due 2017 and the $2.43 million 4.75% FCCBs due 2017. The committee also approved amendment to the terms of the existing FCCBs to the extent not exchanged pursuant to the exchange offer.
The new bonds will be listed on Singapore Exchange Securities Trading. The FCCB issue opened on 5 July 2016. The floor price for the conversion of the bonds shall be Rs 10 (the face value). The company has issued notices to convene a meeting of the holders of the existing FCCBs on 27 July 2016 for approving the proposed amendments to the terms of the existing bonds.
Meanwhile, Prime Minister Narendra Modi after expanding the Council of Ministers with 19 new members, also reshuffled some portfolios in his Cabinet on Tuesday, 5 July 2016. Prakash Javadekar, who was earlier promoted to Cabinet rank, was given the HRD Ministry. He had been the Minister of State (Independent charge) for Environment and Forests. Smriti Irani has been shifted from HRD Ministry to Textiles Ministry. Other than that, Finance Minister Arun Jaitley has shed Information and Broadcasting (I&B) portfolio and Venkaiah Naidu has been given additional charge of I&B. The government at the centre appointed Manoj Sinha as new Minister of Communications with independent charge in place of Ravi Shankar Prasad after splitting the Communications and Electronics & Information Technology ministry. Prasad continues to remain the minister of Electronics & Information Technology. Besides Mr. Javadekar, 19 new Ministers (17 new faces and two old hands) took oath as Ministers of State. The Council of Ministers now has 77 members. The previous strength of the government was 63. Five Ministers of State tendered their resignation on Tuesday, leaving 58 Ministers in the earlier batch. The total strength of the Union Council of Ministers has been capped at 82.
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