After moving into positive zone from negative zone in early afternoon trade, the two key benchmark indices once again slipped into red from green. At 12:15 IST, the barometer index, the S&P BSE Sensex was down 38.72 points or 0.15% at 25,190.98. The decline for the Nifty 50 index was higher than the Sensex's fall in percentage terms. The Nifty was currently down 16.95 points or 0.22% at 7,730.05. Meanwhile, the outcome of a monthly survey showed that growth in India's services sector eased last month due to a slower expansion in new business inflows.
The Sensex rose 11.54 points or 0.04% at the day's high of 25,241.24 in early afternoon trade. The barometer index hit its lowest level in more than three weeks when it lost 133.51 points or 0.52% at the day's low of 25,096.19 in mid-morning trade. The Nifty rose 1.95 points or 0.02% at the day's high of 7,748.95 in early afternoon trade. The index, too, hit its lowest level in more than three weeks when it lost 43.15 points or 0.55% at the day's low of 7,703.85 in mid-morning trade.
In overseas stock markets, Asian stocks edged lower amid renewed global growth concerns in the wake of weaker-than-expected Chinese manufacturing data. The Caixin China general manufacturing purchasing managers' index fell to 49.4 in April 2016 from 49.7 in March 2016. A reading below 50 indicates economic contraction. The data was released during trading hours in Asia yesterday, 3 May 2016. China's official manufacturing PMI, a competing gauge, came in at 50.1 in April 2016 compared with 50.2 in March 2016, according to data released by the National Bureau of Statistics on 1 May 2016. The Chinese economy is the world's second biggest economy after the United States.
A surprise interest-rate cut by Australia's central bank has added to global economic jitters. The Reserve Bank of Australia yesterday, 3 May 2016, cut its benchmark interest rate by 25 basis points to record low of 1.75% in a bid to combat record-low inflation and a strong local currency. The decision was announced during trading hours in Asia. US stocks closed lower yesterday, 3 May 2016, led by declines in energy and materials stocks amid renewed global growth worries. Meanwhile, Cleveland Fed President Loretta Mester yesterday, 3 May 2016, said in a speech that waiting for global financial markets to calm down before raising interest rates may backfire and just lead to more volatility. Mester said she would like to see gradual interest-rate hikes this year. Mester is a voting member of the policy-setting Federal Open Market Committee (FOMC) this year. The FOMC next undertakes monetary policy review at a two-day meeting on 14-15 June 2016.
Closer home, the market breadth indicating the overall health of the market was weak. On BSE, 1,395 shares declined and 798 shares rose. A total of 108 shares were unchanged. The BSE Mid-Cap index was currently down 0.43%. The BSE Small-Cap index was currently down 0.3%. The losses for both these indices were higher than the Sensex's decline in percentage terms.
Pharma stocks were mixed. GlaxoSmithkline Pharmaceuticals (down 1.72%), Divi's Laboratories (down 1.18%), Dr Reddy's Laboratories (down 0.75%), Wockhardt (down 0.69%), Strides Shasun (down 0.6%) and Cipla (down 0.04%) edged lower. Alkem Laboratories (up 0.16%), Cadila Healthcare (up 0.89%), Ipca Laboratories (up 0.33%), Lupin (up 0.06%) and Glenmark Pharmaceuticals (up 0.38%) edged higher.
Sun Pharmaceutical Industries (Sun Pharma) was off 0.38% at Rs 795.35. The stock hit a high of Rs 799 and a low of Rs 787.10 so far during the day. The company during market hours today, 4 May 2016, announced that the company has signed an agreement with International Centre for Genetic Engineering and Biotechnology (ICGEB) to develop a novel botanical drug for treatment of dengue. Through this agreement, Sun Pharma commits development of Cissampelos pariera (Cipa), a botanical drug in collaboration with ICGEB. Through this agreement, Sun Pharma will follow up on earlier pre-clinical collaboration between ICGEB and erstwhile Ranbaxy Laboratories. Sun Pharma will develop Cipa, a botanical drug following a drug registration process similar to a new chemical entity, consisting of all required in-vitro, in-vivo, pre-clinical and clinical studies meeting all regulatory standards of India and other regulatory agencies worldwide.
Aurobindo Pharma rose 0.82% at Rs 808.50, with the stock extending gains registered during the previous trading session triggered by reports that a foreign brokerage has initiated coverage on the Aurobindo Pharma stock with an "outperform" rating. The stock had surged 4.18% to settle at Rs 801.95 yesterday, 3 May 2016. The brokerage has reportedly said in a research report that Aurobindo Pharma is a beneficiary of faster approvals for its drugs in the US. It added that all key plants of the company are compliant with the US Food and Drug Administration (USFDA) norms. The brokerage expects Aurobindo's US sales to rise at a CAGR of 20% over next two years. The US market contributes 80% to Aurobindo's profits, according to the brokerage.
Telecom stocks declined. Idea Cellular (down 1.04%) and Reliance Communications (down 0.35%) edged lower.
Bharti Airtel was down 0.76%. Bharti Airtel announced after market hours yesterday, 3 May 2016, that its subsidiary Airtel M-Commerce Services has been renamed as Airtel Payments Bank after receiving necessary approvals from all concerned authorities. The company also unveiled a new logo to reflect its new identity. On 11 April 2016, Airtel Payments Bank became the first entity in India to receive a payments bank license from the Reserve Bank of India (RBI).
The company plans to start rolling out its banking network in the second quarter of the current financial year. Airtel Payments Bank (which began operations in 2011 as Airtel M-Commerce Services) currently provides money transfer services and semi-closed wallet services (Airtel Money). The company has presence in 800 plus towns across India. Kotak Mahindra Bank holds 19.9% stake in Airtel Payments Bank. Kotak is expected to bring its banking expertise to the venture.
Shares of telecom towers company Bharti Infratel were down 1.96% at Rs 375.50.
Adani Power dropped in volatile trade on equity dilution worries after the company's board of directors decided to seek shareholders' approval to raise funds by way of issue of equity shares/convertible bonds up to Rs 10000 crore. The stock was currently off 0.16% at Rs 31.65. The stock hit a high of Rs 32.90 and a low of Rs 31.10 so far during the day. The company's consolidated net profit rose 64.1% to Rs 1173.39 crore on 54.37% rise in total income to Rs 7456.36 crore in Q4 March 2016 over Q4 March 2015.
Pursuant to the stake sale in Adani Transmission (India) by the company in the previous year, the merger of solar power undertaking of Adani Enterprises with the company with effect from 1 April 2015 and the acquisition of 100% stake of UPCL by the company with effect from 20 April 2015, the figures for Q4 March 2016 and FY 2016 not fully comparable with the figures of corresponding quarter and previous year, Adani Power said.
Meanwhile, the outcome of a monthly survey showed that growth in India's services sector eased last month due to a slower expansion in new business inflows. The seasonally adjusted Nikkei Services Business Activity Index dropped to 53.7 in April 2016 from 54.3 in March 2016. April data highlighted a general lack of pressure on the capacity of Indian service providers, as unfinished business declined. Services firms' sentiment weakened slightly in April, with the degree of optimism being modest by historical standards.
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