Strong market breadth

Stocks regained strength in mid-morning trade. At 11:28 IST, the barometer index, the S&P BSE Sensex, was up 48.66 points or 0.14% at 33,621.88. The Nifty 50 index was up 17.90 points or 0.17% at 10,441.70. Both the Sensex and the Nifty turned volatile after scaling record high in early trade. Many metal and mining stocks rose. Cement stocks declined.

Key benchmark indices drifted higher in early trade with both the Sensex and the Nifty scaling record high. Volatility struck bourses in morning trade as the key benchmark indices regained positive zone soon after erasing early gains to sink in negative zone.

The S&P BSE Mid-Cap index was up 0.13%, underperfoming the Sensex. The S&P BSE Small-Cap index was up 0.65%, outperforming the Sensex.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1,460 shares rose and 960 shares fell. A total of 120 shares were unchanged.

Overseas, most Asian stocks were trading lower. Markets in Japan were closed for Culture Day. Activity in China's service sector expanded at a faster pace in October, a private gauge showed Friday, in contrast with official data showing a slower pace of growth. The Caixin China services purchasing managers' index rose to 51.2 in October from 50.6 in September, Caixin Media Co. and research firm Markit said. China's official nonmanufacturing PMI, which includes the construction sector, fell to 54.3 in October from 55.4 in September, the National Bureau of Statistics said on Tuesday.

In US, the Dow Jones Industrial Average closed at a record on Thursday, but the other main benchmarks saw muted moves, as investors parsed through tax reform details.

House Republicans released details of a highly-anticipated tax-reform plan although market moves were subdued. The corporate tax rate would be reduced to 20% from 35% under the plan, which also aims to lower the number of income tax brackets. Hopes for tax cuts have been credited for some market gains over the past year.

Trump announced that Jerome Powell, Federal Reserve Governor, would become the chairman of the Federal Reserve when current Chair Janet Yellen steps down at the end of her term in February. The move had been mostly expected by investors.

In Europe, the Bank of England (BoE) raised its key interest rate by a quarter-percentage point to 0.5%, meeting widely held expectations for the first rate increase to be enacted since July 2007. There remain considerable risks to the outlook, which include the response of households, businesses and financial markets to developments related to the process of EU withdrawal, BoE said in a statement, referring to Britain's plan to exit the European Union, or Brexit.

Back home, many metal and mining stocks rose. Steel Authority of India (Sail) (up 5.32%), National Aluminium Company (up 2.96%), Hindustan Zinc (up 0.78%), Tata Steel (up 0.3%), Jindal Steel & Power (up 1.07%) and Hindustan Copper (up 5.63%) edged higher. JSW Steel (down 0.09%) and NMDC (down 0.19%) fell.

Hindalco Industries rose 1.13% ahead of its Q2 September 2017 results later today, 3 November 2017. The company's overseas arm Novelis reported strong Q2 September 2017 results yesterday, 2 November 2017. Novelis Inc. is a leader in aluminum rolled products and the world's largest recycler of aluminum.

On a consolidated basis, Novelis reported net income of $307 million in Q2 September 2017, compared to a net loss of $89 million in Q2 September 2016. Net sales increased 18% to $2.8 billion in Q2 September 2017 over Q2 September 2016, driven by higher average aluminum prices and higher total shipments.

Vedanta rose 0.53% after consolidated attributable profit after tax before exceptional items rose 43% to Rs 2036 crore on 37% growth in net sales to Rs 21520 crore in Q2 September 2017 over Q2 September 2016. The result was announced after market hours yesterday, 2 November 2017.

There was an exceptional income (credit) of Rs 186 crore in Q2 September 2017, primarily relating to reversal of royalty of Rs 291 crore at Zinc India. This was partially offset by Rs 109 crore of exploratory assets write-off at Oil & Gas business.

The growth in top line during the quarter was on account of higher volume at Copper India, Zinc India, Zinc International, ramp up at aluminium business and higher commodity prices partially offset by currency appreciation, lower volumes at Oil & Gas business.

Kuldip Kaura, Chief Executive Officer, Vedanta, said that key contracts on the company's announced Oil & Gas projects are at advanced stages of being awarded. Kaura expects the second half of the current fiscal to be more robust with the continuing production ramp up and the company continues to maintain a strong balance sheet and remain focused on creating long term shareholder value.

Cement stocks declined. ACC (down 0.16%), UltraTech Cement (down 0.41%) and Shree Cement (down 0.82%) fell. Ambuja Cements (up 0.59%) rose.

Grasim Industries was off 0.22%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.

Excel Crop Care surged 15.58% after net profit jumped 67.78% to Rs 45.15 crore on 42.98% growth in net revenue from operations to Rs 384.75 crore in Q2 September 2017 over Q2 September 2016. The result was announced after market hours yesterday, 2 November 2017.

Bharat Forge rose 2.53% after North America Class 8 truck sales jumped 161% to 35,700 units in October 2017 over October 2016. Bharat Forge earns significant amount of revenues from Class 8 trucks in the US.

On the macro front, data released today, 3 November 2017 showed that the the seasonally adjusted Nikkei India Services Purchasing Managers' Business Activity Index rose to 51.7 in October from 50.7 in September. The Indian service sector's recovery following the implementation of the goods and services tax (GST) gathered pace as the sector observed a faster rise in activity, underpinned by greater inflows of new business. Increased capacity pressures led to firms raising staffing levels for the second month in succession.

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