Benchmark indices register small gains

Gains in global stocks aided small upmove for key benchmark indices. The barometer index, the S&P BSE Sensex, rose 89.89 points or 0.35% at 25,778.75, as per the provisional closing data. The gains for the Nifty 50 index were lower than Sensex's gains in percentage terms. The Nifty gained 21.75 points or 0.28% at 7,887.80, as per the provisional closing data. The two key benchmark indices edged higher for the second day in a row.

The Sensex hit its highest level in almost two weeks when it rose 121.07 points or 0.47% at the day's high of 25,809.93 in late trade. The barometer index lost 74.62 points or 0.29% at the day's low of 25,614.24 in mid-morning trade. The Nifty, too, its highest level in almost two weeks when it rose 30.85 points or 0.39% at the day's high of 7,896.90 in late trade. The index lost 28.35 points or 0.36% at the day's low of 7,837.70 in mid-morning trade.

In overseas stock markets, banking stocks led gains in European stocks after Swiss lender Credit Suisse Group posted a smaller-than-expected net loss in the first quarter. Resources shares also edged higher as crude and metal prices rose. Trading in US stock index futures indicated gains for US stocks at the opening bell. Trading in US index futures indicated that the Dow Jones Industrial Average could gain 103 points at the opening bell today, 10 May 2016. Minneapolis Fed President Neel Kashkari said in a speech yesterday, 9 May 2016, that he supported the current dovish stance of the Federal Reserve. Chicago Fed President Charles Evans said in a speech in London yesterday, 9 May 2016, that a stronger labor market is underpinning growth prospects. The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 14-15 June 2016.

Japanese stocks led gains in Asian equities after Japanese finance minister Taro Aso told a parliamentary session today, 10 May 2016, that it would be natural for the Japanese government to intervene if the yen were to gain abruptly against the US dollar. The Nikkei 225 Average settled 2.15% higher. A strong local currency puts pressure on the earnings of exporters because it can make their goods more expensive overseas. The Japanese finance minister yesterday, 9 May 2016, said that he was prepared to undertake intervention in the foreign-exchange market.

Chinese stocks edged higher as consumer inflation numbers were seen as leaving enough room for further monetary easing from China's central bank amid a continued slowdown in growth. In mainland China, the Shanghai Composite index ended 0.04% higher. In Hong Kong, the Hang Seng index settled 0.43% higher. The latest data showed that China's consumer price index remained unchanged at 2.3% in April from a year earlier. The producer price index declined 3.4% in April from a year earlier, compared with a 4.3% year on-year drop in March.

Closer home, the market breadth indicating the overall health of the market turned negative from positive in late trade. On BSE, 1,315 shares fell and 1,298 shares rose. A total of 151 shares were unchanged. The BSE Mid-Cap index provisionally rose 0.3%. The BSE Small-Cap index provisionally gained 0.11%. Both these indices underperformed the Sensex.

Total turnover on BSE amounted to Rs 2,107 crore, lower than turnover of Rs 2467.95 crore registered during the previous trading session.

Shares of FMCG giant Hindustan Unilever (HUL) edged higher after the company's Chief Financial Officer P.B. Balaji was quoted as saying after the announcement of the company's Q4 March 2016 results yesterday, 9 May 2016, that he expects a sequential improvement in the company's sales volume growth in Q1 June 2016. The stock rose 1.93% to Rs 862.45. His comments came after the company reported a tepid volume growth in its domestic consumer business in Q4 March 2016. Volume growth stood at 4% on year-on-year basis in Q4 March 2016. Balaji was quoted as saying that the demand remains subdued, especially in rural areas, and a good monsoon would be a welcome tailwind. He also said that raw material prices are going up and HUL is considering options including price increases. The HUL stock shed 0.8% to settle at Rs 846.10 yesterday, 9 May 2016, after the company's tepid sales volume growth in Q4 March 2016 disappointed investors.

Tata Steel declined in volatile trade. The stock dropped 0.33% to Rs 327.95. The stock hit high of Rs 337 and low of Rs 325.55 in intraday trade. Tata Steel before market hours today, 10 May 2016, announced that seven expressions of interest submitted for Tata Steel's UK business have been immediately taken forward to the next stage of the sale process. Only those bidders who have put in initial bid for the whole of Tata Steel's UK business have been considered for the next stage of the sale process, Tata Steel said. Expressions of interest for parts of the UK business are not being taken forward at this point. In the next phase of the sales process the progressing interested parties will be given access to further business information and management team presentations in order for them to rapidly progress their interest to a binding stage. Tata Steel Europe has put Tata Steel UK on the block due to the deteriorating financial performance of the UK subsidiary.

JSW Steel fell 2.92% on reports the company is among seven bidders shortlisted for Tata Steel's UK assets. Worries about the acquisition of the loss making business and possible increase in debt to finance the acquisition if it becomes a successful bidder weighed on the counter.

Shares of microfinance firm Ujjivan Financial Services made a modest debut on the bourses. The stock settled at Rs 231.60, a premium of 10.29% over the initial public offer price of Rs 210. The stock debuted at Rs 227, a premium of 8.1% to the initial public offer (IPO) price. The stock hit a high of Rs 244 and low of Rs 217.05, in intraday trade. On BSE, 96.81 lakh shares were traded on the counter.

The Reserve Bank of India (RBI) yesterday, 9 May 2016, notified that the aggregate ceiling on investment by Foreign Institutional Investors (FII)/Registered Foreign Portfolio Investors (RFPI) in Ujjivan Financial Services remains at 49%. The ceiling on total foreign investment in the company from all sources also remains at 49%.

Kansai Nerolac Paints rose 1.51% after the company said promoter Kansai Paint Company acquired 1.37 crore shares, or 2.54% equity in the paint maker through open market purchase on 6 May 2016. Post acquisition, Kansai Paint Company holds 39.79 crore stake or 73.83% equity in Kansai Nerolac Paints.

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