A bout of volatility was witnessed as key benchmark indices recovered from lower level after extending losses in afternoon trade. At 13:21 IST, the barometer index, the S&P BSE Sensex, was off 206.30 points or 0.77% at 26,450.53. The losses for the Sensex were higher in percentage terms than those for the 50-unit CNX Nifty index. The Nifty was currently off 51 points or 0.63% at 8,014.80. The Nifty regained the psychological 8,000 level soon after falling below that mark. The Nifty hit 4-1/2-week low when it dropped 66.50 points or 0.82% at the day's low of 7,999.30 in afternoon trade. The Sensex hit 4-week low when it dropped 255.50 points or 0.95% at the day's low of 26,401.28 in afternoon trade.
The latest slide on domestic bourses materialized after a monthly survey showed a further slowdown in the manufacturing sector in October 2015. Weakness in Asian stocks also weighed on sentiment on the domestic bourses.
The outcome of a monthly survey showed a further loss of growth momentum across the Indian manufacturing sector last month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) hit 22-month low of 50.7 in October 2015 from a reading of 51.2 in September 2015. A reading above 50 indicates expansion in activity, while one below that level signals contraction.
The market breadth indicating the overall health of the market was weak. On BSE, 1,614 shares fell and 914 shares rose. A total of 122 shares were unchanged. The BSE Mid-Cap index was currently down 0.32%. The BSE Small-Cap index was currently down 0.63%. The decline in both these indices was lower in percentage terms than the Sensex's fall.
In overseas stock markets, Chinese and Japanese stocks led decline in Asian equities as China's manufacturing data pointed to slowing activity. US stocks drifted lower during the previous trading session on Friday, 30 October 2015, after a batch of weaker economic reports and mixed corporate earnings.
Meanwhile, Revenue Secretary Hasmukh Adhia was quoted as saying that the government could cut corporate tax to 25% from 30% before a previous deadline of four years and will provide a roadmap for ending corporate tax exemptions shortly. Finance Minister Arun Jaitley, while presenting his annual budget in February, announced that the government would gradually pare corporate tax by 5 percentage points during the next four years and roll back various tax exemptions.
HCL Technologies rose 0.86%. HCL Technologies during market hours today, 2 November 2015, announced that the company has supported International Personal Finance plc (IPF) with the successful launch of its digital lending business in Poland. HCL helped to create the 'hapipozyczki' IT platform, which provides online loans to Polish consumers. The digital transformation program has enabled IPF to drastically reduce its application-to-loan-disbursement cycle to 15 minutes, HCL Technologies said. The new platform will help IPF deliver a great online experience and further cement brand loyalty, the company said.
Pharma stocks declined. Cipla (down 1.07%), Glenmark Pharmaceuticals (down 1.77%), Lupin (down 2.44%), Sun Pharmaceutical Industries (down 2.56%), GlaxoSmithKline Pharmaceuticals (down 3.85%), Cadila Healthcare (down 0.34%) declined. Aurobindo Pharma (up 0.48%) and Wockhardt (up 2.15%) rose.
Dr Reddy's Laboratories rose 0.18%. Dr Reddy's Laboratories said the company has launched pain killer product Nise D spray. It will be available in two convenient pack sizes -- pocket pack at Rs 99 and home pack for Rs 130. By launching Nise D spray the company has strengthened its over the counter (OTC) portfolio in India. In India, the market for pain relief products is approximately Rs 1700 crore as per the A C Nielsen Retail measurement study.
Reliance Communications (RCom) rose 2.06%. RCom has agreed to acquire Russian conglomerate Sistema JSFC's Indian wireless business carried on by Sistema Shyam Teleservices (SSTL) through a stock swap. RCom will acquire approximately 9 million customers and approximately Rs 1500 crore of annual revenues by virtue of the transaction. In addition, RCom will acquire SSTL's most valuable and superior 800/850 MHz band spectrum, ideally suited for 4G LTE services, to complement its own unique nationwide footprint of minimum 5 MHz contiguous 800/850 MHz spectrum aggregating 148.75 MHz, RCom said in a statement.
RCom will assume the liability to pay to the Department of Telecommunications (DoT) installments for SSTL's spectrum dues amounting to Rs 392 crore per annum for the next 10 years, the company said. An appropriate payment/earn-out mechanism has been agreed in relation to disputed spectrum contiguity charges claimed by DoT. SSTL intends to pay off its existing debt before its merger with RCom.
After the share swap, SSTL will hold 10% equity stake in RCom. Post closing of the deal, minority investors of SSTL will be given an option to exchange their shares in SSTL with the pro-rata RCom shares held by SSTL, the company said in a statement.
Tyre stocks declined. Apollo Tyres (down 2.54%), CEAT (down 1.02%), JK Tyre & Industries (down 2.17%), MRF (down 0.89%), Balkrishana Industries (down 0.05%) and TVS Srichakra (down 0.19%) edged lower. Goodyear India rose 1.52%.
Sugar stocks fell. Bajaj Hindusthan (down 1.91%), Dhampur Sugar Mills (down 5.58%), Sakthi Sugars (down 2.19%), Triveni Engineering & Industries (down 1.73%), Shree Renuka Sugars (down 1.57%), Simbhaoli Sugar Mills (down 6.41%), declined. Balrampur Chini Mills rose 0.82%.
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