Shares continued to hover in a narrow range in mid-afternoon trade. At 14:16 IST, the barometer index, the S&P BSE Sensex, was up 114.10 points or 0.43% at 26,463.20. The Nifty 50 index was up 39.10 points or 0.48% at 8,167.85. Positive leads from Asian markets and overnight rally on the Wall Street boosted investors sentiment in the domestic market.
The broad market depicted strength. There were almost two gainers against every loser on BSE. 1,653 shares rose and 893 shares fell. A total of 154 shares were unchanged. The BSE Mid-Cap index was currently up 0.82%. The BSE Small-Cap index was currently up 0.78%. Both these indices outperformed the Sensex.
Overseas, European shares edged lower in early trading today, 6 December 2016, with commodities-related stocks coming under pressure following a drop in prices of crude oil and industrial metals. Except China's Shanghai Composite, all other Asian shares edged higher as investors judged the selloff after Italy's referendum was overdone, with robust US economic data also helping sentiment. In US, the Dow Jones Industrial Average finished at a record yesterday, 5 December 2016, as solid economic data offset concerns about Europe's stability in the wake of a rejection of Italy's vote on Sunday, 4 December 2016, to reform existing constitutional rules. The broader stock market rose after a survey showed that the services side of the economy grew at its fastest pace in November in a year. The Institute of Supply Management non-manufacturing index climbed to 57.2 last month. Any reading over 50 indicates economic expansion.
Back home, most realty shares edged higher. Oberoi Realty (up 4.23%), Unitech (up 3.53%), Anant Raj (up 3.49%), Housing Development and Infrastructure (HDIL) (up 2.98%), DLF (up 2.73%), Sobha (up 2.01%), D B Realty (up 1.74%), Indiabulls Real Estate (up 1.74%), Godrej Properties (up 1.15%), Prestige Estates Projects (up 0.24%), Parsvnath Developers (up 0.08%), Sunteck Realty (up 0.05%) and Omaxe (up 0.03%), edged higher. Mahindra Lifespace Developers (down 0.8%), Phoenix Mills (down 2.13%) and Peninsula Land (down 2.56%), edged lower.
Cement shares were mixed. Ambuja Cements (up 0.33%) and ACC (up 0.21%), edged higher.
UltraTech Cement was down 0.55%. Grasim Industries was down 0.15%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
FMCG major Dabur India declined 1.48% after the company foresees some near term pressure on the business on account of scarcity of cash with customers and trade due to demonetization. The company made the announcement after market hours yesterday, 5 December 2016.
Dabur India said that the impact varies across channels and geographies and stress is highest for wholesalers and small town grocery shops, who are facing a severe liquidity crisis and are destocking. The impact is likely to be positive on modern trade outlets and plastic money enabled retailers who are likely to benefit from this change.
On account of continuity of current uncertain situation it is difficult to quantify the impact on Q3 December 2016 at this point of time, however it is temporary in nature and situation will improve with increase in availability of new currency.
In the meanwhile, the company is focusing more on modern retail, e-commerce and institutional sales and also is encouraging general trade retailers to adopt cashless payment systems. This will help in mitigating the overall impact of demonetization and pave the way for normalization in the next few months, Dabur added.
It may be recalled that government from 9 November 2016 had banned legal tender of higher denomination notes; namely Rs 500 and Rs 1000 notes, dubbed as demonetization in its crackdown on black money.
On macro front, a two-day meet of the monetary policy committee (MPC) of the Reserve Bank of India (RBI) is scheduled today, 6 December 2016 and tomorrow, 7 December 2016. It will be interesting to watch RBI's monetary policy stance this time in a scenario of government's recent historic move of demonetization of higher denomination notes and amid easing consumer inflation. RBI had cut policy rates by 25 basis points in its last meet in October.
Meanwhile, Chief minister of Tamil Nadu, J Jayalalithaa, died yesterday, 5 December 2016, after undergoing treatment at Apollo Hospitals in Chennai. She was 68.
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