Market hovers in narrow range

Key benchmark indices continued to hover in a narrow range in early afternoon trade. At 12:16 IST, the barometer index, the S&P BSE Sensex, was up 69.51 points or 0.25% at 28,130.65. The Nifty 50 index was up 29.60 points or 0.34% at 8,727.20. The market shrugged off negative leads from Asian markets and a decline on the Wall Street on Friday, 7 October 2016. The market breadth, indicating the overall health of the market, was strong. On BSE, 1,674 shares rose and 889 shares fell. A total of 141 shares were unchanged. The BSE Mid-Cap index was currently up 0.27%. The BSE Small-Cap index was currently up 0.55%. Both these indices outperformed the Sensex.

In overseas stock markets, most Asian stock markets were trading lower. Markets in Hong Kong, Japan and Taiwan were shut for public holidays. US stocks fell on Friday, 7 October 2016, to end the week lower following a report on US employment that came in below expectations but was viewed as strong enough for the US central bank to consider raising interest rates by the end of the year. The US economy added 156,000 jobs last month, while the unemployment rate ticked up to 5% as more workers entered the labor market.

Most pharmaceutical shares edged higher. Cipla (up 2.26%), IPCA Laboratories (up 1.69%), Lupin (up 1.08%), Dr Reddy's Laboratories (up 0.94%), Glenmark Pharmaceuticals (up 0.93%), Aurobindo Pharma (up 0.67%), Sun Pharmaceutical Industries (up 0.61%), Wockhardt (up 0.35%), Cadila Healthcare (up 0.27%), Alkem Laboratories (up 0.18%) and Divi's Laboratories (up 0.04%), edged higher. GlaxoSmithKline Pharmaceuticals (down 0.17%) and Strides Shasun (down 0.54%), edged lower.

Piramal Enterprises gained 0.13% after the company announced before market hours today, 10 October 2016, that its UK-based subsidiary acquired five anesthesia and pain management injectable products from Janssen Pharmaceutica NV, in an all cash deal for an upfront consideration of $155 million, and up to an additional $20 million. The products to be acquired are five injectable versions of well-established Janssen brands, Sublimaze (fentanyl citrate), Sufenta (sufentanil citrate), Rapifen (alfentanil hydrochloride), Dipidolor (piritramide), and Hypnomidate (etomidate). Janssen Pharmaceutica NV is a global pharma company.

Metal shares were in demand. National Aluminium Company (up 5.71%), Vedanta (up 3.03%), Hindalco Industries (up 2.12%), Steel Authority of India (up 2%), NMDC (up 1.53%), Jindal Steel & Power (up 0.87%), Hindustan Copper (up 0.59%), Bhushan Steel (up 0.23%) and Hindustan Zinc (up 0.06%), edged higher.

Tata Steel rose 2.26% to Rs 415.60 on reports that a foreign brokerage has maintained its outperform rating on the stock. The brokerage reportedly said that imposition of anti-dumping duty in European Union is a big positive for the Tata Steel stock. The brokerage has reportedly increased FY 2018 earnings per share (EPS) estimates of Tata Steel by 6% on higher EBITDA/tonne in Europe. Tata Steel remains cheap on EV/EBITDA valuation, the brokerage added.

JSW Steel rose 1.99% to Rs 1,810 after the company announced during trading hours today, 10 October 2016, its board will meet on 27 October 2016 to consider stock split. In a separate announcement today, the company said that its crude steel production rose 22% to 3.98 million tonnes in Q2 September 2016 over Q2 September 2015. Production of flat products rose 12% to 2.86 million tonnes in Q2 September 2016 over Q2 September 2015. Production of long products rose 24% to 0.79 million tonnes in Q2 September 2016 over Q2 September 2015.

Meanwhile, JSW Steel announced after market hours on Friday, 7 October 2016, that it has been declared a preferred bidder in 5 mines in the auctions for category C mines conducted by state government of Karnataka. The auction was conducted during the period 1 October 2016 to 6 October 2016. The estimated resources in these 5 mines as per the tender documents are around 111 million tonnes. The highest final offer price by the company to become a preferred bidder is in the range of 58.9% to 102.52% of average monthly prices of iron ore of different grades and quality published by Indian Bureau of Mines in Karnataka from time to time. The company will take all requisite steps as per the tender documents to obtain letter of intent, all statutory clearances, execute mine development & production agreement (MOPA) and start the mining operations.

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