A bout of volatility was witnessed as key benchmark indices recovered from lower level after trimming gains in early afternoon trade. At 12:15 IST, the barometer index, the S&P BSE Sensex, was up 250.92 points or 1.04% at 24,493.90. The gains for the 50-unit Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty was currently up 67.55 points or 0.92% at 7,436.40. In overseas stock markets, Asian stocks moved higher on favourable US economic data overnight. The Sensex and the Nifty have remained in positive zone so far during the trading session after opening with an upward gap.
Closer home, data showing substantial purchases of Indian stocks by foreign portfolio investors (FPIs) during the previous trading session boosted sentiment on the domestic bourses. FPIs bought stocks worth a net Rs 1437.50 crore yesterday 2 March 2016, as per provisional data released by the stock exchanges. The Sensex had risen almost 2% yesterday, 2 March 2016, mirroring a rally in Asian stocks.
The Sensex jumped 275.56 points or 1.13% at the day's high of 24,518.54 in mid-morning trade, its highest level since 8 February 2016. The barometer index rose 140.30 points or 0.57% at the day's low of 24,383.28 in morning trade. The Nifty rose 78.60 points or 1.06% at the day's high of 7,447.45 in mid-morning trade, its highest level since 8 February 2016. The index rose 37.20 points or 0.5% at the day's low of 7,406.05 in morning trade.
In overseas stock markets, Asian markets edged higher on favourable US economic data overnight. US stocks closed slightly higher yesterday, 2 March 2016, helped by gains in energy stocks on rise in oil prices. A monthly employment report showed acceleration in US private sector job addition last month.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,361 shares rose and 924 shares fell. A total of 111 shares were unchanged. The BSE Mid-Cap index was currently up 0.1%. The BSE Small-Cap index was currently up 0.74%. Both these indices underperformed the Sensex.
Stocks of public sector banks (PSU banks) edged lower. IDBI Bank (down 0.7%), Union Bank of India (down 1.32%), Bank of India (down 1.24%), Bank of Baroda (down 1.03%), Punjab National Bank (down 0.76%) and State Bank of India (down 0.36%) declined. Indian Bank (up 3.5%) and Corporation Bank (up 1.22%) rose. PSU bank stocks had surged during the previous trading session after the Reserve Bank of India (RBI) announced relaxations on the treatment of certain balance sheet items for the purpose of determining banks' regulatory capital.
Meanwhile, the Union Budget 2016-17 disappointed the public sector banks by maintaining the allocation of capital funds unchanged at Rs 25000 crore for FY 2017 considering higher non-performing assets (NPAs) and weak earnings. On the flip side, the Budget has announced to operationalize Banks Board Bureau (BBB) in 2016-17, which will spell out a roadmap for consolidation of public sector banks.
Central Bank of India rose 1.06% at Rs 66.75 after the bank said that a special committee of the board has approved raising funds by issuing equity shares. Central Bank of India said that the Capital Raising Committee of the board of directors of the bank at its meeting held yesterday, 2 March 2016, approved raising of additional equity capital by issuance and allotment of upto 3.14 crore equity shares of the face value of Rs 10 each at the issue price of Rs 52.66 per equity share, aggregating to Rs 165.56 crore to Life Insurance Corporation of India (LIC) on preferential basis, subject to statutory approvals. The committee also decided to hold an extraordinary general meeting (EGM) of shareholders on 30 March 2016 to seek their approval for the proposed fund raising.
Further, the committee also noted that the bank has sought approval of Government of India (GoI) for raising additional equity capital by conversion of entire 5,830 innovative perpetual debt instruments (IPDI) of the face value of Rs 10 lakh each, aggregating to Rs 583 crore, held by GoI, into equity shares to be issued and allotted to GoI on preferential basis. The bank has also sought approval of GoI for raising additional equity capital of such sum as may be sanctioned by GoI by issuance and allotment of equity shares to GoI on preferential basis. The conversion price and the issue price will be Rs 70.71 per equity share, including premium of Rs 60.71 per equity share, the bank said. The announcement was made after market hours yesterday, 2 March 2016.
Stocks of private sector banks were mixed. IndusInd Bank (up 1%), HDFC Bank (up 0.6%) and Axis Bank (up 0.53%) rose. ICICI Bank (down 1.32%), Yes Bank (down 1.38%) and Kotak Mahindra Bank (down 0.27%) declined.
Aviation stocks were mixed. SpiceJet (up 1.08%) and Jet Airways (India) (up 0.09%) rose. InterGlobe Aviation (down 1.79%) declined.
The Union Budget 2016-17 is mixed for the civil aviation sector as the government's push to improve regional connectivity by reviving 160 airports was negated by a hike in excise duty on jet fuel. To boost maintenance, repair and overhaul (MRO) of aircrafts in India, the government announced zero service tax on MRO services, simplification of import processes for aircraft spares, exemption on customs duty for maintenance tools and tool kit and removal of the one year window restriction period for using duty free parts.
Sun Pharma Advanced Research Company rose 4.23% at Rs 292 after the company announced that a meeting of the board of directors of the company will be held on 5 March 2016, to fix the issue price, issue size, entitlement ratio, fractional entitlement and record date for the proposed rights issue. SPARC's board of directors at a meeting held on 12 May 2015, had approved rights issue, so that the funds raised by way of right issue of shares is not more than Rs 250 crore. The announcement was made after market hours yesterday, 2 March 2016.
Meanwhile, the outcome of a monthly survey showed that the rate of growth in India's services sector eased last month. The seasonally adjusted Nikkei India Services Purchasing Managers' Index (PMI) fell to a three-month low of 51.4 in February 2016, from January's reading of 54.3. Service providers' confidence with regards to the 12-month outlook for business activity remained positive, with panellists indicating that improved marketing campaigns are likely to drive sales. However, the sentiment waned since January 2016.
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