Market edges lower amid initial volatility

Key benchmark indices edged lower amid initial volatility tracking weakness in Asian stocks. At 9:30 IST, the barometer index, the S&P BSE Sensex was down 48.40 points or 0.18% at 27,230.36. The Nifty 50 index was currently down 17.25 points or 0.21% at 8,353.45. IT and capital goods stocks declined in early trade.

In overseas stock markets, Asian stocks edged lower on profit booking as investors took stock of a recent rally driven by the hope that central banks will provide stimulus to offset a likely downturn triggered by Brexit. Activity in China's services sector rose to an 11-month high in June, a private survey showed today, 5 July 2016. The Caixin/Markit services purchasing managers' index (PMI) for June rose to 52.7 from 51.2 in May on a seasonally adjusted basis. Readings above 50 indicate an expansion on a monthly basis, while readings below signal contraction. US market remained shut yesterday, 4 July 2016, on account of Independence Day.

Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 720 shares rose and 649 shares declined. A total of 60 shares were unchanged. The BSE Mid-Cap index was currently down 0.08%. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index was currently up 0.06%, outperforming the Sensex.

NTPC (down 0.93%), GAIL (India) (down 0.68%) and Tata Motors (down 0.65%) were the major losers from the Sensex pack.

Grasim Industries roe 0.17% after the company announced that the operations at its staple fibre plant at Nagda have resumed in a phased manner with immediate effect in the wake of availability of water with the onset of monsoon. Grasim had last month announced temporary suspension of production of viscose staple fibre (VSF) at its Nagda plant from 5 June 2016, due to shortage of water. The announcement was made after market hours yesterday, 4 July 2016.

Adani Ports and Special Economic Zone rose 0.94% after the company said before market hours today, 5 July 2016 that the it has raised Rs 252 crore yesterday, 4 July 2016 by allotment of 2,520 rated, listed, secured, taxable, redeemable, non-convertible debentures (NCDs) of the face value of Rs 10 lakh each on private placement basis.

Shares of Ultra Tech Cement (UTCL) rose 1.41% and Jaiprakash Associates (JAL) surged 10.79%. The board of directors of JAL approved an amendment to the definitive agreement dated 31 March 2016 and also the draft scheme of arrangement with UTCL for sale of cement business of JAL and its wholly-owned subsidiary, Jaypee Cement Corporation (JCCL) comprising identified operating cement plants with an aggregate capacity of 17.20 MTPA spread over the states of Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, Uttarakhand and Andhra Pradesh besides a grinding unit of 4 MTPA capacity which is currently under implementation in Uttar Pradesh. The total enterprise value now agreed is Rs 16189 crore. An additional amount of Rs 470 crore shall be paid by UTCL for completion of the grinding unit under implementation.

The transaction is subject to various regulatory approvals including the approval of stock exchanges, Competition Commission of India, financial institutions & banks, shareholders & creditors and sanction of the scheme of arrangement by High Courts at Mumbai and Allahabad. The consummation of transaction is expected to take 9 to 12 months.

On this occasion, Manoj Gaur, executive chairman, Jaypee Group said that the Jaypee Group is determined to reduce its overall debt through its proactive divestment initiatives to help the group tide these current turbulent times caused by economic slowdown in the country. He added that post this deal, Jaypee Group shall retain an aggregate cement manufacturing capacity of 10.60 MTPA with plants spread in the states of Madhya Pradesh, Uttar Pradesh, Andhra Pradesh and Karnataka. The group would continue to leverage expertise in the fields of engineering & construction, real estate and project execution in a committed manner.

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