Firmness continued on the bourses in mid-morning trade, with the barometer index, S&P BSE Sensex, hitting its highest level in more than three weeks. At 11:15 IST, the Sensex was up 260.92 points or 1.08% at 24,503.90. The gains for the 50-unit Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty was currently up 71.85 points or 0.98% at 7,440.70. The Nifty, too, had hit its highest level in more than three weeks in early trade.
The two key benchmark indices have remained in positive zone so far during the trading session after opening with an upward gap. The Sensex jumped 271.30 points or 1.11% at the day's high of 24,514.28 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 76.85 points or 1.04% at the day's high of 7,445.70 in early 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.
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.
Meanwhile, the outcome of a monthly survey showed slowdown in growth in India's services sector 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.
In overseas stock markets, Asian markets edged higher, extending previous trading session's rally. US stocks closed slightly higher yesterday, 2 March 2016, helped by gains in energy stocks on rise in oil prices.
Closer home, the market breadth indicating the overall health of the market was strong. On BSE, 1,301 shares rose and 762 shares fell. A total of 112 shares were unchanged. The BSE Mid-Cap index was currently up 0.23%. The BSE Small-Cap index was currently up 0.82%. Both these indices underperformed the Sensex.
Steel stocks edged higher on renewed buying. Jindal Steel & Power (up 7.75%), Tata Steel (up 4.17%), Steel Authority of India (up 3.04%) and JSW Steel (up 2.03%) gained. The doubling of clean energy cess on coal from Rs 200 to 400 per tonne in Union Budget 2016-17 would further increase the input cost for domestic steel makers and hurt margins. On the flip side, the thrust on infrastructure sector in the Budget will help generate much needed demand for steel industry which is reeling under competition from imports and poor domestic demand.
Auto stocks gained. Bajaj Auto (up 1.32%), Hero MotoCorp (up 0.95%), TVS Motor Company (up 0.02%) and Eicher Motors (up 0.23%) rose. Ashok Leyland (down 0.53%) edged lower.
Maruti Suzuki India was off 0.49% at Rs 3,594. The stock hit a high of Rs 3,647 and a low of Rs 3,580 so far during the day. The company today, 3 March 2016, announced that the ex-showroom prices of its models would go up in the range of Rs 1,441 to Rs 34,494 across its models following the levy of infrastructure cess on automobiles in Union Budget 2016-17. As smart hybrid models (Ciaz SHVS and Ertiga SHVS) are exempt from the infrastructure cess, there is no change in the prices of these models, the company said. The announcement was made during market hours today, 3 March 2016.
Finance minister Arun Jaitley in the Union Budget 2016-17 early this week, imposed infrastructure cess of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs.
Mahindra & Mahindra (M&M) rose 2.08% at Rs 1,228, with the stock recovering on bargain hunting after previous trading session's slide. The stock had lost 5.3% to settle at Rs 1,199.05 yesterday, 2 March 2016, after the company's management in a post-budget conference call said that the excise duty exemption on products manufactured at the company's Haridwar plant expired from 1 January 2016 and this could impact the margins of the company adversely by around 100 basis points (bps) in Q4 March 2016.
Tata Motors rose 4.86% at Rs 332.40. Jaguar Land Rover (JLR) North America announced on 1 March 2016 that its US sales rose 25% to 7,929 units in February 2016 over February 2015.
Infosys rose 1.51% at Rs 1,173.70 after the company yesterday, 2 March 2016, said that Al Ahli Bank of Kuwait (ABK), a leading retail bank in Kuwait, has selected Infosys Finacle to drive its technology transformation. Infosys Finacle, part of EdgeVerve Systems, is a product subsidiary of Infosys.
BPCL dropped 0.71% at Rs 781.80 as the stock turned ex-dividend today, 3 March 2016 for second interim dividend of Rs 3.50 per share for the year ending 31 March 2016. Before turning ex-dividend, the stock offered a dividend yield of 0.44% based on the closing price of Rs 787.40 on BSE yesterday, 2 March 2016.
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