Strong market breadth

After erasing a lion's portion of intraday gains in early afternoon trade, key benchmark indices recovered from lower level in afternoon trade. At 13:16 IST, the barometer index, the S&P BSE Sensex was up 49.25 points or 0.2% at 24,932.84. The gains for the Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was currently up 23.95 points or 0.31% at 7,627.15. The Sensex failed to retain the psychologically important 25,000 level which it had crossed at the onset of trading session.

The Sensex rose 117.06 points or 0.47% at the day's high of 25,000.65 at the onset of the trading session. The barometer index lost 25.54 points or 0.1% at the day's low of 24,858.05 in early trade. The Nifty rose 35.45 points or 0.46% at the day's high of 7,638.65 at the onset of the trading session. The index lost 9 points or 0.11% at the day's low of 7,594.20 in early trade.

In overseas stock markets, energy shares led gains in European stocks as crude oil prices rose. Asian stocks witnessed a mixed trend. US stocks closed lower yesterday, 5 April 2016, on concerns about the upcoming corporate results and slowdown in global growth.

Closer home, the market breadth indicating the overall health of the market was strong. On BSE, 1,446 shares rose and 885 shares fell. A total of 119 shares were unchanged. The BSE Mid-Cap index was currently off 0.19%, underperforming the Sensex. The BSE Small-Cap index was currently up 0.67%, outperforming the Sensex.

FMCG shares were mixed. Britannia Industries (up 2%), Marico (up 1.06%), Dabur India (up 1.04%), Godrej Consumer Products (up 0.49%), Hindustan Unilever (up 0.20%) and Bajaj Corp (up 0.09%), edged higher. Procter & Gamble Hygiene & Health Care (down 0.04%), Tata Global Beverages (down 0.04%), Nestle India (down 0.07%), GlaxoSmithKline Consumer Healthcare (down 0.53%), Colgate Palmolive (India) (down 0.8%) and Jyothy Laboratories (down 1.06%), edged lower.

Cement stocks were in demand. UltraTech Cement (up 3%), ACC (up 2.63%) and Ambuja Cements (up 1.70%), edged higher.

Grasim Industries was up 1.98%. Grasim has exposure to cement sector through its holding in UltraTech Cement.

Most fertiliser stocks edged higher. Coromandel International (up 2.66%), Fertilisers & Chemicals Travancore (up 1.90%), Gujarat State Fertilizers Company (up 1.31%), Chambal Fertilisers & Chemicals (up 1.06%), Deepak Fertilisers & Petrochemicals Corporation (up 0.91%), Tata Chemicals (up 0.71%), Rashtriya Chemicals and Fertilisers (up 0.64%) and National Fertilizers (up 0.52%) edged higher.

Power Grid Corporation of India (PGCIL) rose 1.37% to Rs 140.90 on media reports that a foreign brokerage has maintained its buy rating on the stock, citing attractive valuations. The foreign brokerage reportedly said that PGCIL has delivered on FY 2016 capitalization and capital expenditure plan. The brokerage expects over 17% compound annual growth rate (CAGR) in earnings for the company over FY 2015-18.

Meanwhile, the outcome of a monthly survey showed that growth in India's services sector accelerated last month on the back of a marked and accelerated increase in new business. On the flip slide, the latest data indicated that businesses still operated below capacity, as backlogs declined at the quickest rate in seven years. The seasonally adjusted Nikkei India Services purchasing managers' index (PMI) edged higher to 54.3 in March from 51.4 in February. Sub-sector data indicated that the services sector activity rose in five out six categories, with the sole exception being Transport & Storage. Services input costs and output charges rose at relatively weak rates. Indian services companies remained optimistic that activity will increase further over the coming 12 months. The level of confidence was at a nine-month high, with positivity linked to favourable government policies and forecasts of a pick-up in demand.

In its bid to boost economic growth, the Reserve Bank of India (RBI) announced a reduction of 25 basis points (bps) in its benchmark lending rate viz. the repo rate to 6.5% from 6.75% after a scheduled monetary policy review yesterday, 5 April 2016. The central bank also announced the fine-tuning of its liquidity management framework. While retaining the accommodative stance of the monetary policy, RBI Governor Raghuram Rajan indicated in his monetary policy statement that the RBI may cut the repo rate further in the coming months if macroeconomic and financial developments provide room for further rate cut.

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