A bout of volatility was witnessed in mid-morning trade as key benchmark indices recovered after erasing almost all the intraday gains. At 11:16 IST, the barometer index, the S&P BSE Sensex was up 62.04 points or 0.25% at 25,331.68. The Nifty 50 index was currently up 21.15 points or 0.27% at 7,734.20. The market breadth indicating the overall health of the market was strong. On BSE, 1,347 shares rose and 750 shares fell. A total of 122 shares were unchanged. The BSE Mid-Cap index was currently up 0.33%. The BSE Small-Cap index was currently up 0.34%. Both these indices outperformed the Sensex.
The Sensex rose 149.55 points or 0.59% at the day's high of 25,419.19 at the onset of the trading session, its highest level since 31 March 2016. The barometer index rose 13.44 points or 0.05% at the day's low of 25,283.08 in morning trade. The Nifty rose 44.55 points or 0.57% at the day's high of 7,757.60 at the onset of the trading session, its highest level since 31 March 2016. The index rose 6.30 points or 0.08% at the day's low of 7,719.35 in morning trade.
Meanwhile, the outcome of a monthly survey showed that the growth in India's manufacturing accelerated last month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) hit eight-month high of 52.4 in March 2016. The index rose from 51.1 in February 2016. Despite gathering momentum, growth of production and new orders still remained below trend rates. The latest monthly survey showed that inflationary pressures in India's manufacturing are on the upside, with cost burdens rising at the quickest pace in three months in March and output charge inflation reaching a 16-month high in the month just gone by. The build-up in inflationary pressures may lead the Reserve Bank of India to hold off from cutting rates, especially as solid growth was seen in March, said Pollyanna De Lima, Economist at Markit.
In overseas stock markets, most Asian stocks edged higher after US monthly job data reinforced market expectations that the US Federal Reserve will adopt a slower path for interest-rate increases. US stocks registered modest gains on Friday, 1 April 2016, as investors bet that a spate of strong economic data, including the March jobs report, won't speed up the pace of interest-rate increases by the Federal Reserve. In a speech in New York on 29 March 2016, Federal Reserve Chairwoman Janet Yellen stressed a need for a cautious stance on interest-rate increases in the backdrop of global economic slowdown.
Shares of oil exploration and production (E&P) companies edged lower on decline in crude oil prices. ONGC (down 1.63%), Oil India (down 0.47%) and Cairn India (down 1.14%) edged lower. Lower crude oil prices would result in lower realization from crude sales for oil exploration firms.
Index heavyweight Reliance Industries was off 0.33% at Rs 1,030.25. The stock hit a high of Rs 1,042.45 and a low of Rs 1,024.45 so far during the day.
Shares of public sector oil marketing companies (PSU OMCs) edged higher on decline in crude oil prices. BPCL (up 0.5%), Indian Oil Corporation (up 0.45%) and HPCL (up 0.01%) edged higher. Decline in crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. The government has already decontrolled pricing of petrol and diesel.
In the global commodities markets, Brent for June settlement was currently down 40 cents at $38.27 a barrel. The contract had fallen $1.66 a barrel or 4.11% to settle at $38.67 a barrel during the previous trading session.
FMCG stocks edged higher. Procter & Gamble Hygiene and Health Care (up 1.61%), Nestle India (up 0.99%), Emami (up 0.83%), Marico (up 0.45%), Bajaj Corp (up 0.36%), Colgate-Palmolive (India) (up 0.36%), Hindustan Unilever (up 0.18%) and GlaxoSmithkline Consumer Healthcare (up 0.05%) rose. Jyothy Laboratories (down 0.96%), Britannia Industries (down 0.72%), Dabur India (down 0.68%) and Tata Global Beverages (down 0.16%) edged lower.
Godrej Consumer Products (GCPL) rose 2.21% at Rs 1,419.25 after the company announced on Saturday, 2 April 2016 that it has entered into an agreement to acquire Strength of Nature LLC (SON), a leading company making hair care products for women of African descent. The acquisition is expected to be earnings per share (EPS) accretive for GCPL from year one itself, it said. Strength of Nature LLC reported net sales of about $77.6 million for the calendar year ended December 2015. Godrej Consumer Products' 3 by 3 strategy aims at scaling up the company's international presence in emerging markets in Asia, Africa and Latin America through 3 core categories viz. hair care, home care and personal care.
Index heavyweight and cigarette major ITC dropped 1.59% at Rs 330.65 after the company announced it has closed manufacturing operation at all its cigarette factories in India with effect from 1 April 2016 until clarity emerges on the quantum of mandatory pictorial health warning on cigarette packages. The announcement was made on Saturday, 2 April 2016.
On the macro front, the finance ministry after trading hours on Friday, 1 April 2016, announced that as per initial estimates, the fiscal deficit for 2015-16 is expected to be within the target of 3.9% of GDP. It further said that the government remains committed to the path of fiscal consolidation. The government's Plan Expenditure for 2015-16 is expected to be around Rs 4.70 lakh crore, which will be higher than the budget estimate and also higher than the actual plan expenditure in 2014-15.
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