Benchmark indices hover near the flat line

Key benchmark indices trade near the flat line in mid-afternoon trade. At 14:18 IST, the barometer index, the S&P BSE Sensex, was down 32.24 points or 0.13% at 24,851.35. The 50-unit Nifty 50 was up 0.65 points or 0.01% at 7,603.85. The Sensex failed to retain the psychologically important 25,000 level which it had crossed at the onset of trading session.

The Sensex lost 49.53 points or 0.19% at the day's low of 24,834.16 in mid-afternoon trade. The barometer index rose 117.06 points or 0.47% at the day's high of 25,000.65 at the onset of the trading session. The Nifty lost 11.45 points or 0.15% at the day's low of 7,591.75 in mid-afternoon trade. The index rose 35.45 points or 0.46% at the day's high of 7,638.65 at the onset of the trading session.

In overseas stock markets, European stocks edged higher after the outcome of a monthly survey showed improvement in China's service sector growth last month. China is the world's second biggest economy after the United States. Asian stocks witnessed a mixed trend. In mainland China, the Shanghai Composite ended near the flat line. In Hong Kong, the Hang Seng index ended 0.15% higher. The Caixin China services purchasing managers' index rose to 52.2 in March from 51.2 in February. China's official nonmanufacturing PMI, a competing gauge, also showed faster growth in March, according to data released last week. US stocks closed lower yesterday, 5 April 2016, on concerns about the upcoming corporate results and slowdown in global growth.

Closer home, the market breadth indicating the overall health of the market was strong. On BSE, 1,451 shares rose and 942 shares fell. A total of 124 shares were unchanged. The BSE Mid-Cap index was currently up 0.12%. The BSE Small-Cap index was currently up 0.53%. Both these indices outperformed the Sensex.

Stocks of public sector banks edged lower. Central Bank of India (down 1.93%), Union Bank of India (down 2.05%), Punjab National Bank (down 2.05%), Corporation Bank (down 1.65%), Bank of India (down 1.91%), IDBI Bank (down 1.32%), Canara Bank (down 1.58%), Bank of Baroda (down 1.46%) and State Bank of India (down 0.54%) declined.

Stocks of private sector banks were mixed. Yes Bank (up 0.11%), IndusInd Bank (up 0.37%) and HDFC Bank (up 0.36%) edged higher. ICICI Bank (down 2%), Axis Bank (down 1.58%) and Kotak Mahindra Bank (down 0.34%) edged lower.

The Reserve Bank of India (RBI) announced a reduction of 25 basis points (bps) in its benchmark lending rate viz. the repo rate to 6.5% from 6.75% after a scheduled monetary policy review yesterday, 5 April 2016. The central bank also announced the fine-tuning of its liquidity management framework. While retaining the accommodative stance of the monetary policy, RBI Governor Raghuram Rajan indicated in his monetary policy statement that the RBI may cut the repo rate further in the coming months if macroeconomic and financial developments provide room for further rate cut.

IT stocks edged lower. Tech Mahindra (down 2.24%), Persistent Systems (down 1.4%), Wipro (down 0.77%) and HCL Technologies (down 1.5%) declined. Oracle Financial Services Software (up 0.42%) edged higher.

Index heavyweight and IT major Infosys fell 1.12% at Rs 1,205. The stock hit a high of Rs 1,228 and a low of Rs 1,203.50 so far during the day. The company will announce its Q4 March 2016 results on 15 April 2016.

TCS was up 0.5% at Rs 2,475. The stock hit a high of Rs 2,487.50 and a low of Rs 2,460.05 so far during the day. The company will announce its Q4 March 2016 results on 18 April 2016.

Tata Motors rose 2.56% to Rs 380 after the company announced the commercial launch of its new hatchback Tiago. The price for the petrol variant starts at Rs 3.20 lakh ex-showroom New Delhi. The diesel variant starts at Rs 3.94 lakh ex-showroom New Delhi. Tiago will be available for sale, across the country in over 597 Tata Motors sales outlets from today, 6 April 2016.

Meanwhile, the outcome of a monthly survey showed that growth in India's services sector accelerated last month on the back of a marked and accelerated increase in new business. On the flip slide, the latest data indicated that businesses still operated below capacity, as backlogs declined at the quickest rate in seven years. The seasonally adjusted Nikkei India Services purchasing managers' index (PMI) edged higher to 54.3 in March from 51.4 in February. Sub-sector data indicated that the services sector activity rose in five out six categories, with the sole exception being Transport & Storage. Services input costs and output charges rose at relatively weak rates. Indian services companies remained optimistic that activity will increase further over the coming 12 months. The level of confidence was at a nine-month high, with positivity linked to favourable government policies and forecasts of a pick-up in demand.

In its bid to boost economic growth, the Reserve Bank of India (RBI) announced a reduction of 25 basis points (bps) in its benchmark lending rate viz. the repo rate to 6.5% from 6.75% after a scheduled monetary policy review yesterday, 5 April 2016. The central bank also announced the fine-tuning of its liquidity management framework. While retaining the accommodative stance of the monetary policy, RBI Governor Raghuram Rajan indicated in his monetary policy statement that the RBI may cut the repo rate further in the coming months if macroeconomic and financial developments provide room for further rate cut.

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