Key benchmark indices provisionally settled with tiny losses as they took a breather after prior three sessions of strong gains. The barometer index, the S&P BSE Sensex fell 10.24 points or 0.04% at 28,441.93, as per the provisional closing data. The Nifty 50 index fell 5.50 points or 0.06% at 8,780.70, as per the provisional closing data. Key indices hovered alternately between gains and losses within a narrow range around the flat line throughout the session.
The Sensex rose 96.68 points or 0.33% at the day's high of 28,548.85 in mid-afternoon trade, its highest level since 23 July 2015. The barometer index slipped 65.56 points or 0.23% at the day's low of 28,386.61 in late trade. The Nifty rose 27.05 points or 0.3% at the day's high of 8,813.25 in mid-afternoon trade. The index shed 26.25 points or 0.29% at the day's low of 8,759.95 in late trade.
In overseas stock markets, most European stocks edged higher as bank and mining shares advanced. Asian stocks were mixed as markets cautiously awaited the release of US jobs data scheduled tomorrow, 2 September 2016. China's official manufacturing purchasing managers' index, a gauge of factory activity, rose to 50.4 in August, returning to expansionary territory, official data showed today, 1 September 2016. The rise from July's 49.9 could be a sign of improvement in the world's second-largest economy. A PMI reading above 50 indicates an expansion in manufacturing activity, while a reading below 50 points to a contraction. However, the Caixin China manufacturing purchasing managers' index, a private gauge of nationwide factory activity, fell to 50 in August from 50.6 in July.
US stocks finished lower yesterday, 31 August 2016, as oil prices fell and promising economic data supported the case for a Federal Reserve rate hike this year. Data showed yesterday, 31 August 2016 the private sector created 177,000 jobs in August, in line with expectations, and contracts to buy previously owned homes surged in July, suggesting the economy was regaining sufficient momentum for the Federal Reserve to raise interest rates this year.
Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 1,423 shares fell and 1,177 shares rose. A total of 179 shares were unchanged. The BSE Mid-Cap index provisionally fell 0.38%. The BSE Small-Cap index provisionally dropped 0.39%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 3644 crore, lower than turnover of Rs 3838.49 crore registered during the previous trading session.
Shares of telecom companies slumped after Reliance Industries Chairman Mukesh Ambani reportedly announced free voice calls and cheap internet plan for Reliance Jio customers. Idea Cellular (down 10.7%), Bharti Airtel (down 6.43%), Reliance Communications (down 9.18%) and Tata Teleservices (Maharashtra) (down 2.98%) edged lower. According to reports, Reliance Industries Chairman Mukesh Ambani announced the launch of "Jio Welcome Offer" from 5 September 2016. Under the new plan, Reliance Jio Infocomm (RJIL) customers can avail data, voice, video and Jio's bouquet of apps for free till 31 December 2016. Reliance Jio will not charge for voice calls or for roaming calls within India. Jio will charge Rs 50 for one gigabyte of 4G data, reports added. Jio's data prices are roughly one-fifth of what customers have been charged by other operators so far.
Reliance Jio's aggressive pricing could force other telecom firms to cut voice and data tariffs. The price war may strain finances of most telecom operators, who are already laden with high debt.
Ambani made the announcement of free voice calls and cheaper 4G data plans during Reliance Industries' (RIL) annual general meeting in Mumbai today, 1 September 2016. RJIL is a unit of RIL. In 2015, RJIL successfully acquired the right to use 4G spectrum in 13 key circles across India.
Shares of index heavyweight Reliance Industries (RIL) dropped 2.84% on reports that a one-man probe panel said that RIL derived "unjust benefit" as a result of gas flowing into its KG-D6 block from the adjacent field of state-run ONGC in the Krishna-Godavari basin. RIL is liable to pay compensation to the government, the panel reportedly said. The panel, under the retired Delhi High Court chief justice A P Shah was set up to suggest a way forward in the ongoing dispute between RIL and ONGC. Shares of ONGC shed 0.02%.
Maruti Suzuki India rose 0.05% after the company announced good sales in August. The company's total sales rose 12.2% to 1.32 lakh units in August 2016 over August 2015. The domestic sales rose 12.3% to 1.19 lakh units in August 2016 over August 2015. Exports rose 10.8% to 12,280 units in August 2016 over August 2015. The announcement was made during market hours today, 1 September 2016.
Separately, the company announced during market hours today, 1 September 2016 that it has commenced sale of light commercial vehicle (LCV), Super Carry, in Gujarat. The company has planned to expand commercial channel to 50 outlets by the year end. The company has invested about Rs 300 crore towards the development of Supper Carry for the Indian market. The vehicle is available at a price of Rs 4.03 lakh ex-showroom Ahmedabad, Gujarat.
Uniply Industries declined 1.68%. The company announced the acquisition of Vector Projects (I) Pvt Ltd for Rs 64.12 crore. The announcement was made after market hours yesterday, 31 August 2016. Vector Projects is one of India's largest end-to-end architectural design and interior fit out companies, having clocked over Rs 210 crore of revenue in the last financial year. Uniply said that the consideration for the acquisition will be paid out as Rs 23.13 crore in stock swap with shares of Uniply, and Rs 40.99 crore through cash payout that will be funded by the promoters of Uniply & other participants via a private placement. Vector will be a wholly-owned subsidiary of Uniply and the impact of this acquisition is effective from 1 April 2016.
On the macro front, the outcome of a monthly survey released today, 1 September 2016 showed that India's manufacturing sector showed a solid improvement last month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) showed a solid improvement in the health of the sector in August, climbing to a 13-month high of 52.6, from July's reading of 51.8. Indian manufacturers enjoyed a solid improvement in operating conditions during August. With demand from the domestic and external markets picking up, companies raised output accordingly. Firms recorded an easing in cost inflation during the month, which in turn resulted in a softer overall increase in factory gate charges.
Meanwhile, India's Gross Domestic Product (GDP) growth slowed down to 7.1% in Q1 June 2016, as against 7.9% in Q4 March 2016 and 7.5% increase in Q1 June 2015.
Another data showed that the index of eight core infrastructure sector rose 3.2% in July 2016 over July 2015. Cumulative eight core infrastructure sector growth stood at 4.9% in the four months period from April to July 2016. The eight core industries comprising coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity have a combined weight of 38% in the Index of Industrial Production (IIP). Both the GDP and core infra data were announced after market hours yesterday, 31 August 2016.
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