PSU bank shares were the top gainers on hopes of a rate by the RBI on easing consumer inflation
Benchmark share indices ended flat, amid a choppy trading session, with state-owned banks gaining the most after easing consumer price inflation raised hopes of a rate cut by the Reserve Bank of India early next month.
The S&P BSE Sensex ended up 19 points at 28,372 and the Nifty50 settled 11 points higher at 8,727. In the broader markets, BSE Midcap and Smallcap indices each ended over 1%. Market breadth ended strong with 1754 gainers and 961 losers on the BSE.
"After witnessing a gap down opening on Monday, stock markets opened today on a relatively sedate note but traded volatile during the day. Nervousness seems to have pervaded the markets as investors question the capacity of central banks’ the world over to give a leg up to economic growth.
Macro-economic news in India was mixed with inflation based on Consumer Price Index (CPI) for August 2016 slowing down to 5.05%, while the annual rate of inflation, based on monthly Wholesale Price Index (WPI), stood at 3.74% (provisional) for the month of August 2016 as compared to 3.55% (provisional) in July 2016. India's industrial production (IIP) on the other hand, fell by 2.4% yoy in July 2016.
Barring the IT index, all other sectoral indices on the National Stock Exchange (NSE) traded in the green, eking out marginal gains," said Shreyash Devalkar, Fund Manager, BNP Paribas Mutual Fund.
India's consumer price inflation slowed to 5.05% in August compared with 6.07% in the previous month as food prices eased, government data showed on Monday. Further, the country's industrial output eased to 2.4% in July from a year ago, because of sluggish production of capital goods and consumer non-durables.
Further, the Wholesale price index (WPI)-based inflation rose to two-year high of 3.74% in August from 3.55% in July, as per the data released today.
Foreign institutional investors were net sellers in equities worth Rs 594 crore on Monday, as per provisional stock exchange data. Markets were closed on Tuesday on account of Bakri ID.
Besides, India's June-September monsoon rains could start withdrawing from the north-western region of the country in the next three-four days, the weather department said on Tuesday.
State-owned banks emerged as the top gainers in a rangebound market led by Canara Bank, Oriental Bank of Commerce and Bank of Baroda which gained over 3% each.
SBI ended over 1%. The state-owned banking major is set to launch first foreign offering for dollar-denominated Additional Tier-I (AT1) bonds today. Issue’s minimum size is expected to be $500 million and indicative coupon rate is 5.5 per cent.
ICICI Bank gained over 1%. The private banking major is launching an initial public offering (IPO) of its life insurance arm ICICI Prudential Life Insurance next week.
Yes Bank staged a recovery after a sharp correction in the previous sessions after it deferred its QIP issue. The stock gained 4%.
Tata Steel pared losses to end flat. Reports suggests that the UK government's plan to save the company's UK business with pension reforms is said to have shelved. Among other Tata Group shares, TCS and Tata Motors ended down over 0.7%-1.5% each.
Dr Reddy's Laboratories ended marginally higher. The pharma major has been listed as an index component of the Dow Jones Sustainability Indices (DJSI) 2016 in the pharmaceuticals, biotechnology and life sciences industry group.
Coal India ended down over 2%. Low price realisation from e-auctions, fuelled by depleting interest income from banks on its cash reserves, in a situation when the demand of the fossil fuel is at a low, resulted in state-owned miner Coal India posting a decline of 14.78 per cent year-on-year in its net profit at Rs 3,065.28 crore for the quarter ended June.
Sun Pharma closed 1.2% lower. The pharma major's share buyback offer is set to open on Sept 22 and close on Oct 5. Sun Pharma will buy back up to 7.5 mn shares at Rs 900/share.
Among others, shares of gold mortgage firm Manappuram Finance gained nearly 4% on the BSE after the company raised Rs 200 crore through issuance of secured redeemable non-convertible debentures (NCDs) on a private placement basis to ICICI Prudential Mutual Fund.
Gitanjali Gems ended in 20% upper circuit at Rs 57.40 on the BSE, after the company's net profit more than doubled to Rs 57 crore for the quarter ended June 30, 2016 (Q1FY17), mainly due to lower interest cost.
A strong earnings growth during the quarter ended June 2016 (Q117) led to a rally in chemical stocks. Bhageria Industries, Thirumalai Chemicals, Chemfab Alkalis, I G Petrochemicals, Pondy Oxides & Chemicals and Kiri Industries gained over 10% each.
Minda Industries surged 9% after the company’s consolidated net profit nearly doubled to Rs 27 crore in June 30, 2016 (Q1FY16) quarter, on the back of strong operational performance.
Photograph: Danish Siddiqui/Reuters