Sensex trims gains

Volatility struck bourses in mid-afternoon trade as the Sensex trimmed almost entire intraday gains while the Nifty once again dipped in the negative zone. At 14:25 IST, the barometer index, the S&P BSE Sensex, was up 21.23 points or 0.06% at 35,181.59. The Nifty 50 index was down 14.75 points or 0.14% at 10,724.60. Auto stocks fell after declaring sales figures for April 2018.

The S&P BSE Mid-Cap index was off 1.05%. The S&P BSE Small-Cap index was off 0.9%. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 1,638 shares fell and 974 shares rose. A total of 115 shares were unchanged. Breadth was strong in early trade. It turned negative from positive in morning trade.

Auto stocks fell after declaring sales figures for April 2018. Hero MotoCorp rose 0.07% ahead of its Q4 March 2018 results today, 2 May 2018. Escorts (down 1.74%), Ashok Leyland (down 1.76%) fell.

TVS Motor Company dropped 4.16%. The company registered a sales growth of 24% to 304,795 units in April 2018 over April 2017. The announcement was made on 1 May 2018.

Maruti Suzuki India shed 0.26%. The company reported a 14.4% increase in total sales at 1,72,986 units in April 2018 against 1,51,215 units in April 2017. The company's domestic sales stood at 1,64,978 units, up 14.2% from 1,44,492 units in April last year, the company said in a statement. The announcement was made on 1 May 2018.

Tata Motors fell 0.69%. The company registered a growth of 86% at 53,511 units in April 2018 as against 28,844 units in April 2017 due to the continued strong sales performance of its commercial and passenger vehicles business in the domestic market. The announcement was made on 1 May 2018.

Mahindra & Mahindra (M&M) declined 0.73%. The company reported a 22% growth in its auto sales at 48,097 vehicles in in April 2018 against 39,417 vehicles during April 2017. The announcement was made on 1 May 2018.

In a separate announcement on 1 May 2018, M&M said it will acquire up to 10% equity in Canada's Resson Aerospace Corp for about Rs 34.50 crore. The consideration would be paid in cash.

Eicher Motors dropped 2.28%. The company said its motorcycles sales jumped 27% at 76,187 units in April 2018 over April 2017. The announcement was made on 1 May 2018.

Bajaj Auto rose 1.03% after the company said its total sales rose 26% to 4.15 lakh units in April 2018 over April 2017. The announcement was made before trading hours today, 2 May 2018.

On the macro front, factory growth in India accelerated in April on strong domestic demand and output, a business survey showed today, 2 May 2018 while price pressures were subdued in a comforting sign for the central bank as it seeks to temper inflation without hurting the economy. The Nikkei Manufacturing Purchasing Managers' Index (PMI) rose to 51.6 in April from 51 in March.

The production of eight core industries, comprising 40.27% of the weight of items included in the Index of Industrial Production (IIP), increased 4.1% in March 2018 over March 2017. Its cumulative output improved 4.2% in April-March 2017-18. The data was released yesterday, 1 May 2018.

Overseas, European markets were trading higher as investors kept their focus on earnings. Most Asian stocks fell as investors await the Fed's view on interest rates, inflation, and the economy. The US Federal Reserve began a two-day meeting yesterday, 1 May 2018. The central bank is reportedly likely to hold interest rates steady but will likely further encourage expectations that it will lift borrowing costs in June on the back of rising inflation and low unemployment.

The Fed raised its benchmark overnight lending rate at its March 20-21 meeting by a quarter percentage point to a target range of between 1.50% and 1.75%. It currently forecasts another two rate rises this year, although an increasing number of policymakers see three as possible. The Fed's next policy meeting is scheduled for 12-13 June.

Meanwhile, US President Donald Trump late Monday gave top allies - the European Union, Canada and Mexico - an extension to the tariff exemption to allow more time negotiate a new pact to avoid the levies. The tariffs of 25% on steel and 10% aluminum- already in effect against China, Russia, Japan and others - were slated to come into effect on 1 May 2018, but have now been pushed back to 1 June 2018.

US stocks closed mostly higher yesterday, 1 May 2018 as a sharp rally in technology stocks helped the S&P 500 and the Nasdaq shake off an early decline. However, the Dow fell for a third straight session as caution remained high ahead of the conclusion of a Federal Reserve policy meeting and fresh developments in global trade.

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