Market firms up in volatile trade

After initial weakness, key benchmark indices swung into positive terrain amid some volatility in morning trade. At 10:15 IST, the barometer index, the S&P BSE Sensex, was up 77.74 points or 0.3% at 25,680.84. The Nifty 50 index was up 19.35 points or 0.25% at 7,866.60. The Sensex rose 152.33 points, or 0.59% at the day's high of 25,755.43 in morning trade. The index fell 73.51 points, or 0.29% at the day's low of 25,529.59 in early trade, its lowest level since 13 April 2016. The Nifty rose 41.80 points, or 0.53% at the day's high of 7,889.05 in morning trade. The index fell 25.45 points, or 0.32% at the day's low of 7,821.80 in early trade, its lowest level since 13 April 2016.

The broad market depicted strength. There were almost two gainers against every loser on BSE. 1,146 shares rose and 594 shares fell. A total of 106 shares were unchanged. The BSE Mid-Cap index was currently up 0.29%, underperforming the Sensex. The BSE Small-Cap index was currently up 0.33%, outperforming the Sensex.

In overseas stock markets, Asian equities edged lower in the wake of the Japanese central bank's decision against expanding monetary stimulus. Losses for US stocks overnight also weighed on Asian markets. After the conclusion of a two-day monetary policy, the Bank of Japan (BOJ) yesterday, 28 April 2016, voted to keep its current level of asset purchases unchanged and rates on hold while announcing a 300 billion ($2.69 billion) lending program to support banks in the region hit by this month's Kyushu earthquake. Speculation was rise that the Japanese the central bank would announce a further easing of the monetary policy to stimulate Japan's economy. US stocks ended lower yesterday, 28 April 2016, under the combined weight of disappointing data and weak corporate earnings. US gross domestic product grew only 0.5% in the first quarter, its slowest pace of growth in two years.

Most capital goods shares edged higher. Bharat Electronics (up 1.64%), Bharat Heavy Electricals (up 1.12%), Punj Lloyd (up 0.99%), BEML (up 0.84%), Reliance Defence and Engineering (up 0.72%), Siemens (up 0.69%), Thermax (up 0.52%), Havells India (up 0.43%), Lakshmi Machine Works (up 0.39%), Suzlon Energy (up 0.35%), Praj Industries (up 0.21%), SKF India (up 0.15%) and Jindal Saw (up 0.11%), edged higher. ALSTOM India (down 0.06%), Alstom T&D India (down 0.19%), ABB India (down 0.36%), AIA Engineering (down 0.59%) and Crompton Greaves (down 1.38%) edged lower.

Engineering & construction major L&T was up 0.35% to Rs 1,264. The stock hit a high of Rs 1,266.60 and a low of Rs 1,252.75 so far during the day.

Metal shares edged higher after copper prices edged higher in the global commodities markets. Steel Authority of India (up 3.19%), Tata Steel (up 1.47%), Hindalco Industries (up 1.44%), Bhushan Steel (up 1.09%), Hindustan Zinc (up 0.64%), National Aluminium Company (up 0.54%), Hindustan Copper (up 0.37%), JSW Steel (up 0.29%) and NMDC (up 0.16%), edged higher. Jindal Steel & Power was down 0.47%.

High Grade Copper for July 2016 delivery was currently up 0.99% at $2.2535 per pound on the COMEX.

Vedanta edged higher after the announcement of its fourth quarter results. The stock was up 3.2% to Rs 103.20. On a consolidated basis, Vedanta posted net loss of Rs 11181 crore in Q4 March 2016, lower than net loss of Rs 19228 crore in Q4 March 2015. Net sales fell 11% to Rs 15829 crore in Q4 March 2016 over Q4 March 2015. Vedanta said that the fall in revenue was due to a decline in oil and metal prices, which was partially offset by higher volumes.

Net profit before exceptional items surged 89% to Rs 955 crore in Q4 March 2016 over Q4 March 2015. Non-operational income or the so-called other income surged 3485.68% to Rs 1289 crore in Q4 March 2016 over Q4 March 2015. Vedanta said that the non-operational income income was significantly higher in Q4 March 2016 largely due to timing differences wherein income earned on certain investments are recognized at maturity. During the quarter, a substantial portion of investments were liquidated at Hindustan Zinc on account of an announcement of special dividend and at Cairn India.

Earnings before interest, tax, depreciation and amortization (EBITDA) dropped 13% to Rs 3508 crore in Q4 March 2016 over Q4 March 2015. The fall in EBITDA in Q4 March 2016 was primarily due to a steep fall in oil and metal prices and premia. Exceptional items in Q4 March 2016 totalled Rs 12312 crore, of which Rs 12304 crore pertained to impairment. The impairment was triggered by the continued fall in oil prices during the year. Further, in light of the declining iron ore prices, both the acquisition goodwill and carrying value of the exploratory assets in West Africa (Western Cluster, Liberia) have also been impaired to the extent of Rs 1490 crore. Additionally, certain unused fixed assets and goodwill at copper mines of Tasmania and Bellary, Karnataka (Iron Ore) incurred an impairment charge of Rs 456 crore. Vedanta announced the fourth quarter results after trading hours yesterday, 28 April 2016.

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