Sensex, Nifty hit over 3-week closing high
Banking, metal sector stocks along with index heavyweights Infosys, HDFC and Reliance Industries (RIL) powered the latest rally on the bourses. The barometer index, the S&P BSE Sensex, jumped 463.63 points or 1.95% to settle at 24,242.98. The 50-unit Nifty 50 index rose 146.55 points or 2.03% to settle at 7,368.85. The Sensex moved past the psychologically important 24,000 level. The Sensex and Nifty, both, settled at their highest level in more than three weeks. The two key benchmark indices gained for the second day in a row.
The Sensex and the Nifty remained in positive zone throughout the trading session after opening with an upward gap. The latest upmove on the domestic bourses was a part of a rally in Asian stocks triggered by upbeat US economic data. Overnight, the data helped US stocks score strong gains.Data showing heavy buying of Indian stocks from foreign portfolio investors (FPIs) during the previous trading session added to the positive mood. FPIs bought shares worth a net Rs 3017.25 crore from the secondary equity markets, yesterday, 1 March 2016, as per data from National Securities Depository (NSDL). The Sensex had surged 3.38% yesterday, 1 March 2016, a day after the announcement of the Union Budget 2016-17, as investors heaved a sigh of relief with no adverse changes in long-term capital gains tax on sale of shares in the Budget.
The broad market depicted strength. There were more than two gainers against every loser on BSE. 1,970 shares rose and 693 shares fell. A total of 131 shares were unchanged. The BSE Mid-Cap index rose 1.88%, underperforming the Sensex. The BSE Small-Cap index gained 2.21%, outperforming the Sensex.
Stocks of public sector banks led rally in bank stocks triggered by the Reserve Bank of India (RBI) announcing relaxations on the treatment of certain balance sheet items for the purpose of determining banks' regulatory capital. Index heavyweight and cigarette major ITC edged lower on profit taking after seeing a post-Budget rally. Bharat Heavy Electricals (Bhel) surged after announcing a large order win.
The Sensex jumped 463.63 points or 1.95% to settle at 24,242.98, its highest closing level since 8 February 2016. The barometer index jumped 501.07 points or 2.1% at the day's high of 24,280.42. The index rose 264.54 points or 1.11% at the day's low of 24,043.89.
The Nifty rose 146.55 points or 2.03% to settle at 7,368.85, its highest closing level since 8 February 2016. The Nifty rose 158.05 points or 2.18% at the day's high of 7,380.35. The index rose 85.85 points or 1.18% at the day's low of 7,308.15.
Among the sectoral indices on BSE, the S&P BSE Realty index (up 5.05%), the S&P BSE Bankex (up 4.92%), the S&P BSE Finance index (up 4.03%), the S&P BSE Basic Materials index (up 2.7%), the S&P BSE IT index (up 2.49%), the S&P BSE Teck index (up 2.26%) and the S&P BSE Power index (up 2.13%) outperfomed the Sensex. The S&P BSE Utilities index (up 1.84%), the S&P BSE Industrials index (up 1.66%), the S&P BSE Capital Goods index (up 1.47%), the S&P BSE Oil & Gas index (up 1.15%), the S&P BSE Energy index (up 1.08%), the S&P BSE Metal index (up 1.02%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.97%), the S&P BSE Telecom index (up 0.91%), the S&P BSE Healthcare index (up 0.56%), the S&P BSE Auto index (up 0.49%), the S&P BSE Consumer Durables index (up 0.3%) and the S&P BSE FMCG index (down 0.11%) underperformed the Sensex.
The total turnover on BSE amounted to Rs 3130 crore, lower than turnover of Rs 4723.03 crore registered during the previous trading session.
Index heavyweight and housing finance major HDFC rose 3.21% at Rs 1,103.10. The stock hit a high of Rs 1,106.90 and a low of Rs 1,076.65 in intraday trade.
Another index heavyweight Reliance Industries rose 1.86% at Rs 1,000.50. The stock hit a high of Rs 1,005.25 and a low of Rs 987.50 in intraday trade.
Index heavyweight and cigarette major ITC lost 1.28% at Rs 320.95 on profit taking. The stock hit a high of Rs 333.80 and a low of Rs 320.65 in intraday trade. Shares of ITC had witnessed a post-budget rally after a lower-than-expected hike in excise duty on cigarettes in the Budget. The stock surged 11.71% in the preceding two trading sessions to settle at Rs 325.10 yesterday, 1 March 2016, from its close of Rs 291 on 26 February 2016. Finance minister Arun Jaitley announced increase in the excise duties on tobacco products other than beedi by about 10% to 15% in the Union Budget 2016-17.
Bharat Heavy Electricals (Bhel) rose 5.02% at Rs 97.35 after the company announced that it has bagged a large contract worth Rs 5600 crore for setting up a 1,600 megawatts (MW) supercritical power project in Tamil Nadu. The project is slated to be commissioned by September 2019 and the power generated from this 1,600 MW power project will help foster growth in Tamil Nadu and provide easy access to electricity to the people of the state, Bhel said. The announcement was made after market hours yesterday, 1 March 2016.
Adani Ports and Special Economic Zone (APSEZ) surged 5.96%. With reference to the media reports titled "Govt approves Adani Port's proposal to club 3 SEZs in Gujarat," Adani Ports and Special Economic Zone after market hours today, 2 March 2016, clarified that the company has not received any formal communication from the central government about the consolidation of the special economic zones (SEZ). APSEZ said that the clubbing of the three SEZs at Mudra will result in higher operating flexibility for the SEZs and is not a material event. News reports suggested that APSEZ had submitted a proposal to the government for clubbing of three SEZs at Mudra.
Bank stocks edged higher 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. Among public sector banks (PSU banks), Corporation Bank (up 13.02%), Indian Bank (up 9.16%), IDBI Bank (up 7.56%), Union Bank of India (up 7.27%), Punjab National Bank (up 7.26%) and Bank of Baroda (up 6.06%) rose.
State Bank of India (SBI) jumped 12.39% at Rs 182.30 on high volumes. The stock hit a high of Rs 183 and a low of Rs 171 in intraday trade. On BSE, 70.49 lakh shares were traded in the counter as against average daily volume of 24.23 lakh shares in the past one quarter.
Among private sector banks, Yes Bank (up 5.08%), Axis Bank (up 3.78%), IndusInd Bank (up 2.91%), Kotak Mahindra Bank (up 2.62%) and HDFC Bank (up 2.43%) edged higher.
ICICI Bank surged 7.26% at Rs 220 on high volumes. The stock hit a high of Rs 221.25 and a low of Rs 210.40 in intraday trade. On BSE, 31.17 lakh shares were traded in the counter as against average daily volume of 17.52 lakh shares in the past one quarter.
The RBI said that revaluation reserves arising from change in the carrying amount of a bank's property consequent upon its revaluation would be considered as common equity tier 1 capital (CET1) instead of Tier 2 capital as hitherto. This would continue to be reckoned at a discount of 55%. The RBI also said that commercial banks may, at their discretion, reckon foreign currency translation reserve arising due to translation of financial statements of their foreign operations as CET1 capital at a discount of 25%. In another amendment, the RBI said that instead of full deduction from CET1 capital, the banks' deferred tax assets (DTAs), which relate to timing differences may be recognised in the CET1 capital up to 10% of a bank's CET1 capital. These amendments on capital treatment of banks' balance sheet items have been made with a view to further align the definition of regulatory capital with the internationally adopted Basel III capital standards. The amendments are with immediate effect, the RBI said in a notification issued after trading hours yesterday, 1 March 2016.
Auto stocks witnessed a mixed trend. Tata Motors rose 0.59% at Rs 317.15 after the company announced that the total sales of Tata Motors passenger and commercial vehicles (including exports) rose 6% to 46,674 vehicles in February 2016 over February 2015. Exports rose 31% to 5,142 units in February 2016 over February 2015.
Maruti Suzuki India rose 3.19% after the company said that Alto, India's top selling model for over 10 years in a row, has crossed the 30 lakh sales milestone in the Indian market. It took about 15 years and 6 months for Alto to achieve this historic figure, Maruti Suzuki India. Alto is the only Indian auto brand to cross this milestone, the company said. Additionally, over 3.8 lakh Alto have been exported to over 70 countries with Sri Lanka, Algeria, Chile, UK and Netherlands being its top markets, it added.
Mahindra & Mahindra (M&M) lost 5.15% at Rs 1,201.10 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. The Haridwar plant has annual capacity of 1 lakh vehicles. The announcement was made before market hours today, 2 March 2016. The management said that it would pass on the infrastructure cess announced in the Union Budget 2016-17 to customers in due course of time after discussion with the Society of Indian Automobile Manufacturers (SIAM). There might be some impact on volumes due to the new levy. However, it could be offset by factors such as increased rural demand and soft interest rates, M&M's management said.
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.
Hero MotoCorp (HMCL) rose 4.99% at Rs 2,800 after the company announced that its total two-wheeler sales rose 13.6% to 5.50 lakh units in February 2016 over February 2015. These numbers have been possible in spite of the production at the company's manufacturing facilities at Gurgaon and Dharuhera in Haryana and at Neemrana in Rajasthan being impacted for a few days due to the local agitations in the region during the month, HMCL said. The announcement was made after market hours yesterday, 1 March 2016.
Bajaj Auto shed 0.88% at Rs 2,240. The company announced that its total sales rose 12% to 2.72 lakh units in February 2016 over February 2015. Motorcycles sales rose 9% to 2.35 lakh units in February 2016 over February 2015. Sales of commercial vehicles rose 37% to 37,437 units in February 2016 over February 2015. Exports declined 12% to 98,959 units in February 2016 over February 2015. The announcement was made during market hours today, 2 March 2016.
Eicher Motors gained 0.36% after its unlisted subsidiary VE Commercial Vehicles reported 57.25% jump in total sales to 5,032 units in February 2016 over February 2015. The announcement was made after market hours yesterday, 1 March 2016.
TVS Motor Company rose 0.63% after the company recorded 7% growth in total sales to 2.19 lakh units in February 2016 over February 2015. The announcement was made after market hours yesterday, 1 March 2016.
Metal and mining stocks were in demand. Hindustan Copper jumped 3.48%.
Steel stocks moved higher. Tata Steel (up 4.34%), Steel Authority of India (Sail) (up 5%) and Jindal Steel & Power (up 2.41%) edged higher. JSW Steel fell 1.07%. The doubling of Clean Energy Cess from Rs 200 to 400 per tonne in the Budget would further increase the input cost for domestic steel maker 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.
Shares of aluminium makers edged higher on renewed buying. Hindalco Industries (up 7.34%) and National Aluminium Company (up 2.44%) edged higher. Union Budget 2016-17 addressed rising import issue of the aluminium sector by increasing the custom duty on primary aluminium to 7.5% from 5% and increasing the Basic Customs Duty on other aluminium products to 10% from 7.5%. The increase in custom duty will help to check imports of aluminium. On the flip side, the reduction in export duty on bauxite to 15% from 20% would decrease domestic ore availability.
Hindustan Zinc fell 0.77%. The government raised the Basic Customs Duty on zinc alloys to 7.5% from 5% in the Union Budget 2016-17.
NMDC rose 2.18% at Rs 84.20. The reduction of export duty on iron ore in the Budget will benefit iron ore exporters. Export duty on iron ore fines with Fe content below 58% has been reduced to nil from 10% while the export duty on iron ore lumps with Fe content below 58% has been decreased to nil from 30%.
Vedanta jumped 4.33% at Rs 78.25, with the stock extending previous trading session's 5.86% gains triggered by the announcement of cut in export duty on low grade iron ore in Union Budget 2016-17. The stock had declined 1.32% to settle at Rs 70.85 on 29 February 2016, the day when Union Budget 2016-17 was unveiled in the Lok Sabha. Finance minister Arun Jaitley in the budget has done away with export duty on iron ore fines and iron ore lumps with iron content below 58%, which were previously charged export duty of 10% and 30%, respectively. The low grade iron ore, exported by Vedanta from Goa, has few takers in the country, which still relies of high quality iron ore to produce steel. Hence, cut in export duty on low grade iron ore augurs well for the company. The finance minister also hiked import duty on aluminium to 7.5% from 5% in a bid to save the industry from cheap imports, which is also a positive development for Vedanta. Basic customs duty on other aluminium products increased from 7.5% to 10%. Basic customs duty on zinc alloys also increased from 5% to 7.5%.
IT stocks edged higher for the second day in a row. Tech Mahindra jumped 5.14%.
TCS advanced 2.33%. TCS today, 2 March 2016 announced that as a new member of the GE Digital Alliance Program created by GE Digital, it will develop innovative digital solutions that increase the productivity of mobile workforces and assets in motion by leveraging Predix, GE's cloud platform for the industrial internet. TCS and GE will work together to create an innovative industry solutions ecosystem by leveraging TCS' comprehensive business and digital expertise to enrich GE's Predix platform, TCS said. The announcement was made after market hours today, 2 March 2016.
Index heavyweight and software major Infosys rose 2.97% at Rs 1,157.95. The stock hit a high of Rs 1,162 and a low of Rs 1,125 in intraday trade.
HCL Technologies rose 2.28% at Rs 851 after the company announced that it has won a five year next–generation information technology outsourcing contract from Sweden-based Husqvarna AB, a leading manufacturer of outdoor power products including robotic mowers, garden tractors, chainsaws and trimmers. HCL has been providing application management services to Husqvarna and with this deal, HCL will now provide end-to-end integrated infrastructure and applications services, covering data center services, network services, security services, applications operations and support services, HCL said in a statement. The announcement was made during trading hours today, 2 March 2016.
Wipro rose 1.21% at Rs 541.50 after the company announced that it has completed the acquisition of HealthPlan Services earlier-than-expected on 29 February 2016. The company's acquisition of Viteos Group, announced on 23 December 2015, is pending regulatory approvals and is yet to be completed, Wipro said. The impact of these developments is expected to be reflected in the financials of company for the current quarter, Wipro said in a statement. The announcement was made after market hours yesterday, 1 March 2016.
The Sensex and the Nifty edged higher for the second day in a row. The Sensex has surged 1,240.98 points or 5.39% in two trading days from its close of 23,002 on 29 February 2016. The Sensex has fallen 1,872.56 points or 7.16% in calendar year 2016 so far (till 2 March 2016). From a 52-week low of 22,600.39 hit on 12 February 2016, the Sensex has risen 1,643.59 points or 7.27%. The Sensex is off 5,777.76 points or 19.24% from a record high of 30,024.74 hit on 4 March 2015.
In overseas stock markets, Japan and China led upmove in Asian markets triggered by overnight rally on the Wall Street. In Japan, the Nikkei 225 Average closed 4.11% higher. In mainland China, the Shanghai Composite closed 4.26% higher. In Hong Kong, the Hang Seng index closed 3.07% higher. US stocks closed sharply higher yesterday, 1 March 2016, helped by a rise in oil prices and a better-than-expected ISM manufacturing report.