Key indices witness volatility in early trade

A divergent trend was witnessed between the two key benchmark indices in early trade with the barometer index, the S&P BSE Sensex trading with minuscule losses and the 50-unit Nifty 50 index trading with small gains. At 9:22 IST, the Sensex was down 4.21 points or 0.02% at 24,866.48. The Nifty was currently up 3.35 points or 0.04% at 7,566.90.

In overseas stock markets, Asian stocks edged lower after registering sharp gains in previous trading session. In China, the Shanghai Composite index was currently off 1.64%. Latest data showed that China's Caixin manufacturing purchasing managers' index (PMI) inched up to 48.4 last month, a slight pick-up from a reading of 48.2 in December 2015. The January reading was still below the 50-point neutral level, which separates a contraction from an expansion. US stocks closed sharply higher on Friday, 29 January 2016 after the Bank of Japan unexpectedly adopted a negative interest rate policy for the first time.

Closer home, the market breadth indicating the overall health of the market was strong. On BSE, 940 shares rose and 362 shares declined. A total of 47 shares were unchanged. The BSE Mid-Cap index was currently up 0.09%. The BSE Small-Cap index was currently up 0.43%. Both these indices outperformed the Sensex.

Shares of state-run oil marketing companies (PSU OMCs) edged lower after the government on Saturday, 30 January 2016, hiked the excise duty on petrol by Rs 1 per litre and Rs 1.50 on diesel. BPCL (down 0.51% at Rs 889.90) and HPCL (down 1.14% at Rs 806.50) edged lower. Indian Oil Corporation (up 0.2% at Rs 401.90) edged higher. Basic excise duty on unbranded or normal petrol has been increased from Rs 8.48 per litre to Rs 9.48 and the same on unbranded diesel from Rs 9.83 per litre to Rs 11.33.

Airline stocks edged higher after aviation turbine fuel (ATF) or jet fuel price was slashed by nearly 12% with effect from today, 1 February 2016. Jet Airways (India) (up 3.9% at Rs 626.10), SpiceJet (up 4.24% at Rs 91) and InterGlobe Aviation (up 4.03% at Rs 909) edged higher. ATF price in Delhi was reduced by Rs 4,765.50 per kilolitre (kl) or 11.94% to Rs 35,126.82 per kilolitre. Jet fuel constitutes over 40% of an airline's operating costs.

L&T rose 2.97% at Rs 1,134.90 after consolidated net profit rose 19% to Rs 1035 crore on 8.4% growth in gross revenue to Rs 26058 crore in Q3 December 2015 over Q3 December 2014. The result was announced after market hours on Friday, 29 January 2016.

The company garnered fresh orders worth Rs 38528 crore at the group level in Q3 December 2015. The international order inflow during the quarter at Rs 11115 crore constituted 29% of the total order inflow, L&T said. Major orders during the quarter were secured by the infrastructure segment, the company said in a statement.

L&T's consolidated order book rose 14% on year-on-year basis at Rs 256458 crore as at 31 December 2015. International order book constituted 27% of the total order book.

L&T said that it is focusing on profitable execution of projects and is confident of its growth in the near to medium term.

Grasim Industries rose 4.84% at Rs 3,553.20 after consolidated net profit rose 95% to Rs 650 crore on 13% growth in net revenue to Rs 9044 crore in Q3 December 2015 over Q3 December 2014. The result was announced on Saturday, 30 January 2016.

Grasim Industries' earnings before interest, taxation, depreciation, and amortization (EBITDA) rose 43% to Rs 1795 crore in Q3 December 2015 over Q3 December 2014.

Aditya Birla Chemicals (India) (ABCIL) has been merged with the company on 4 January 2016 from the appointed date of 1 April 2015. Therefore, the current quarter results are not comparable with corresponding previous quarter.

On like-for-like basis excluding ABCIL numbers, Grasim Industries' consolidated net profit rose 3% to Rs 650 crore on 4% growth in net revenue to Rs 9044 crore in Q3 December 2015 over Q3 December 2014. EBITDA rose 4% to Rs 1795 crore in Q3 December 2015 over Q3 December 2014.

With regard to future business outlook, Grasim Industries said that the cement demand is expected to pick up in the near term with the Government's focus on infrastructure development, housing sector, smart cities, roads etc. The company is well positioned across the country to cater to the growth in demand, Grasim said in a statement.

On the macro front, the Nikkei India Manufacturing PMI data for the month of January 2016 is due at 10:30 IST today, 1 February 2016. The seasonally adjusted Nikkei India Manufacturing PMI had slipped to 49.1 in December 2015 from 50.3 in November 2015.

The Reserve Bank of India (RBI) will announce its sixth bi-monthly monetary policy for the year 2015-16 at 11:00 IST tomorrow, 2 February 2016. In the fifth bi-monthly monetary policy on 1 December 2015, the RBI kept its benchmark interest rate viz. the repo rate unchanged at 6.75% and the cash reserve ratio (CRR) for commercial banks unchanged at 4% of net demand and time liability (NDTL).

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