PNB gains after infusion of capital from government

A divergent trend was witnessed between two key benchmark indices in early afternoon trade. While the barometer index, the S&P BSE Sensex, was currently trading a tad higher for the day, the 50-unit CNX Nifty was trading with small losses. The Sensex once again failed to retain the psychological 28,000 level after surpassing that level in early afternoon trade. The Sensex was currently up 9.49 points or 0.03% at 27,966.98. The Nifty was off 8.85 points or 0.1% at 8,482.15. The BSE Small-Cap index was up 1.31%, outperforming the Sensex.

The market breadth indicating the overall health of the market was quite strong, with more than two gainers against every loser on BSE. Among the gainers from the constituents of the BSE Small-Cap index, gains ranged from 3% to about 19% for quite a few stocks. Among the gainers from the constituents of the BSE Mid-Cap index, gains ranged from about 2% to about 8% for quite a few stocks.

Shares of public sector oil marketing firms edged higher as global crude oil prices dropped. Punjab National Bank (PNB) advanced after the state-run bank announced infusion of capital into the bank by its majority shareholder viz. the Government of India. Ashok Leyland advanced after reporting strong sales for March 2015.

On the macro front, the Eight Core Industries carrying nearly 38% weight in the Index of Industrial Production (IIP) recorded 1.4% growth in February 2015 over February 2014, data released by the government after trading hours yesterday, 31 March 2015 showed.

Meanwhile, the Reserve Bank of India has relaxed position limits for foreign portfolio investors (FPIs), domestic participants and importers of goods and services in the exchange traded currency derivatives (ETCD) market.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 356.07 crore yesterday, 31 March 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 283.71 crore yesterday, 31 March 2015, as per provisional data.

Brent crude oil futures edged lower as markets kept a close watch on US-Iran nuclear talks and the build-up in US oil supplies. For India, the decline in global crude oil prices along with deregulation of diesel price announced by the Indian government in October 2014 will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.

Meanwhile, Indian Oil Corporation (IOC) today, 1 April 2015, announced a reduction in retail selling price of diesel by Rs 1.21 per litre at Delhi (including state levies) with corresponding decline in price in other states. IOC announced reduction in petrol price by 49 paise per litre.

In overseas markets, Asian stock edged lower today, 1 April 2015, following a mixed bag of economic data releases. US stocks registered sizable losses yesterday, 31 March 2015, amid fears that first-quarter earnings will disappoint.

Meanwhile, India's stock markets remain closed tomorrow, 2 April 2015, on account of Mahavir Jayanti. The stock market remains closed again on Friday, 3 April 2015, on account of Good Friday.

At 12:16 IST, the S&P BSE Sensex was up 9.49 points or 0.03% at 27,966.98. The index gained 53.90 points at the day's high of 28,011.39 in early afternoon trade. The index fell 68.47 points at the day's low of 27,889.02 in early trade.

The CNX Nifty was down 8.85 points or 0.1% at 8,482.15. The index hit a high of 8,499.70 in intraday trade. The index hit a low of 8,464.75 in intraday trade.

The BSE Mid-Cap index was up 79.82 points or 0.75% at 10,672.04. The BSE Small-Cap index was up 142.89 points or 1.31% at 11,033.34. Both these indices outperformed the Sensex.

The market breadth indicating the overall health of the market was quite strong, with more than two gainers against every loser on BSE. 1,613 shares gained and 717 shares fell. A total of 101 shares were unchanged.

Shares of public sector oil marketing companies (PSU OMCs) edged higher as global crude oil prices dropped. HPCL (up 0.35%) and Indian Oil Corporation (up 0.96%) edged higher. BPCL (down 0.86%) edged lower. Decline in crude oil prices will reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. The government has already decontrolled pricing of petrol and diesel.

Meanwhile, PSU OMCs today, 1 April 2015, announced a reduction in retail selling prices of diesel and petrol. Indian Oil Corporation (IOC) today, 1 April 2015, announced a reduction in retail selling price of diesel by Rs 1.21 per litre at Delhi (including state levies) with corresponding decline in price in other states. IOC announced reduction in petrol price by 49 paise per litre.

IOC said that the international prices of both petrol and diesel have declined after last revision in fuel prices by the company on 1 March 2015. However, the rupee has depreciated against the dollar. The impact of both these factors warrant decrease in retail selling prices of both petrol and diesel, IOC said in a statement. The movement of prices in international oil market and rupee-dollar exchange rate shall continue to be closely monitored and developing trends of the market will be reflected in future price changes, IOC said.

Auto stocks were mixed after cut in petrol and diesel price. Tata Motors (up 0.15%), Eicher Motors (up 0.45%), and Hero MotoCorp (up 0.12%) edged higher. Bajaj Auto (down 0.07%) and TVS Motor Company (down 3.53%) edged lower.

Ashok Leyland advanced after the company said that its total sales rose 24% to 12,754 units in March 2015 over March 2014. The stock was up 0.61% at Rs 74. The announcement was made during market hours today, 1 April 2015. Ashok Leyland said its sales of medium & heavy commercial vehicles (M&HCV) rose 30% to 10,027 units in March 2015 over March 2014. Sales of light commercial vehicles (LCV) rose 6% to 2,727 units in March 2015 over March 2014.

Mahindra & Mahindra (M&M) rose 0.07% at Rs 1,188. The stock hit a high of Rs 1,194 and a low of Rs 1,179.95 so far during the day. M&M during market hours today, 1 April 2015, said that its total auto sales declined 12% to 45,212 units in March 2015 over March 2014. Sales of passenger vehicles segment (which includes UVs and the Verito) declined 10% to 21,030 units in March 2015 over March 2014. Domestic sales fell 15% to 41,193 units in March 2015 over March 2014. Exports rose 28% to 4,019 units in March 2015 over March 2014.

Maruti Suzuki India declined after the company said its total sales fell 1.6% to 1.11 lakh units in March 2015 over March 2014. The stock was off 2.25% at Rs 3,616. The announcement was made during market hours today, 1 April 2015. Maruti Suzuki India's total domestic sales rose 1.4% to 1.03 lakh units in March 2015 over March 2014. Exports declined 29.3% to 7,836 units in March 2015 over March 2014.

Punjab National Bank (PNB) advanced after the state-run bank announced infusion of capital into the bank by its majority shareholder viz. the Government of India. The stock was up 1.52% at Rs 146.60. The announcement was made during market hours today, 1 April 2015. PNB today, 1 April 2015, said that capital funds to the tune of Rs 870 crore have been received from the Government of India yesterday, 31 March 2015, following issue and allotment of 4.42 crore equity shares at a price of Rs 196.80 per equity share on preferential basis to the Government of India.

Brent crude oil futures edged lower as markets kept a close watch on US-Iran nuclear talks and the build-up in US oil supplies. Brent for May settlement was off 16 cents at $54.95 a barrel. The contract had declined $1.18 a barrel or 2.09% to settle at $55.11 a barrel during previous trading session.

The ongoing nuclear talks between Iran and six world powers missed its deadline on Tuesday, but officials have agreed to continue talks in Switzerland for an extra day, according to media reports. A successful nuclear deal could pave the way for the lifting of sanctions against Iran, and release a large amount of stockpiled oil into an oversupplied global market, pressuring oil prices.

On the macro front, the Eight Core Industries carrying nearly 38% weight in the Index of Industrial Production (IIP) recorded 1.4% growth in February 2015 over February 2014, data released by the government after trading hours yesterday, 31 March 2015 showed. Its cumulative growth during April to February, 2014-15 was 3.8%.

The Reserve Bank of India has relaxed position limits for foreign portfolio investors (FPIs), domestic participants and importers of goods and services in the exchange traded currency derivatives (ETCD) market. The RBI said yesterday, 31 March 2015, that the limit for domestic entities and FPIs to take foreign currency positions in the dollar-rupee pair on ETCD market without having to establish the existence of any underlying exposure has been increased to $15 million per exchange. In addition, there will be an aggregate limit of $ 5 million equivalent per exchange for EUR-INR, GBP-INR and JPY-INR pairs. The limit for domestic importers of goods and services to take hedging positions in ETCD markets has been increased from 50 per cent to 100 per cent of the higher of the average of their last three years' imports turnover and the previous year's turnover. The RBI also said that documentation and other administrative requirements for hedging on the ETCD markets have also been rationalised.

In overseas markets, Asian stock markets edged lower today, 1 April 2015, following a mixed bag of economic data releases. Key indices in Japan, Taiwan, Singapore, South Korea, and Indonesia were off 0.14% to 1.04%. Key indices in China and Hong Kong were up 0.68% to 1.22%.

China's official Purchasing Managers Index rose to 50.1 in March from 49.9 in February, although the HSBC China manufacturing PMI fell to a final reading of 49.6 in March from 50.7 in February.

In Japan, the Bank of Japan's tankan corporate sentiment survey showed the main index measuring sentiment among big manufacturers was unchanged at plus 12 from the December poll.

Trading in US index futures indicated that the Dow could fall 87.50 points at the opening bell today, 1 April 2015. US stocks registered sizable losses yesterday, 31 March 2015, amid fears that first-quarter earnings will disappoint.

Jeffrey Lacker, the president of the Federal Reserve Bank of Richmond and a voting member of the Federal Open Market Committee yesterday, 31 March 2015, said he expects solid growth and rising inflation this year, and as a result, would urge the US central bank to start raising interest rates relatively soon.

The influential monthly US nonfarm payroll data is due on Friday, 3 April 2015, when the US stock market is closed on account of Good Friday. The US government will announce the payroll report for March 2015 on 3 April 2015.

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