Key indices recover after trimming gains

A bout of volatility was witnessed as key benchmark indices recovered after trimming gains in mid-afternoon trade. At 14:19 IST, the barometer index, the S&P BSE Sensex, was up 75.10 points or 0.26% at 25,755.68. The gains for the Nifty 50 index were lower than Sensex's gains in percentage terms. The Nifty was currently up 15.50 points or 0.2% at 7,881.55. Global cues were positive.

The Sensex hit its highest level in almost two weeks when it rose 99.08 points or 0.38% at the day's high of 25,787.94 in afternoon 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 hit 1-week high when it rose 22.10 points or 0.28% at the day's high of 7,888.15 in afternoon 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 94 points at the opening bell today, 10 May 2016. Most US stocks edged higher yesterday, 9 May 2016, as gains for drug companies were almost cancelled by sharp losses for metals and energy companies. 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 was positive. On BSE, 1,242 shares rose and 1,213 shares declined. A total of 143 shares were unchanged. The BSE Mid-Cap index was currently up 0.21%. The BSE Small-Cap index was currently up 0.23%. Both these indices underperformed the Sensex.

Shares of power generation and power distribution companies edged lower. Torrent Power (down 0.46%), GVK Power & Infrastructure (down 0.15%), Tata Power Company (down 0.68%), NTPC (down 0.66%), Adani Power (down 0.5%), Power Grid Corporation of India (down 1.43%), Reliance Infrastructure (down 0.2%) and Reliance Power (down 0.29%) declined. NHPC rose 0.47%.

State run coal mining major, Coal India rose 0.21% to Rs 285.95. The stock hit high of Rs 286.45 and low of Rs 283.20 so far during the day.

Shares of public sector banks declined. Punjab National Bank (down 0.73%), Bank of Baroda (down 0.61%), Union Bank of India (down 0.74%), Canara Bank (down 0.23%), and Bank of India (down 0.5%) edged lower. State Bank of India (SBI) rose 0.24%.

Shares of most private sector banks gained. Axis Bank (up 2.04%), HDFC Bank (up 0.18%), ICICI Bank (up 0.38%), and Kotak Mahindra Bank (up 0.11%) edged higher. Yes Bank (down 0.16%) and IndusInd Bank (down 0.27%) declined.

MM Forgings lost 4.46% after net profit fell 1.3% to Rs 10.97 crore on 0.7% fall in net sales to Rs 122.49 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 9 May 2016.

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