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A divergent trend was witnessed among the two key benchmark indices in morning trade, with the barometer index, the S&P BSE Sensex, trading with small gains and the 50-unit Nifty 50 index trading with minuscule losses. At 10:17 IST, the Sensex was up 17.63 points or 0.07% at 24,842.46. The Nifty was down 3.10 points or 0.04% at 7,552.85. The market breadth indicating the overall health of the market was positive. On BSE, 1,096 shares rose and 780 shares fell. A total of 77 shares were unchanged. The BSE Mid-Cap index was currently up 0.01%, underperforming the Sensex. The BSE Small-Cap index was currently up 0.29%, outperforming the Sensex.
The Reserve Bank of India (RBI) is scheduled to announce its sixth bi-monthly monetary policy for the year 2015-16 at 11:00 IST today, 2 February 2016. In the fifth bi-monthly monetary policy on 1 December 2015, the RBI kept its benchmark interest rate viz. the repo rate unchanged at 6.75% and the cash reserve ratio (CRR) for commercial banks unchanged at 4% of net demand and time liability (NDTL).
In overseas stock markets, Asian equities edged lower on fresh weakness in oil prices. But Chinese stocks edged higher after the country's central bank injected more liquidity into the financial system, in a move to stave off potential liquidity squeezes ahead of the weeklong Lunar New Year holiday that starts on 7 February 2016. The Shanghai Composite index was currently up 2.36%. US stocks pared sharp opening losses to finish nearly unchanged for the day yesterday, 1 February 2016, as weak US manufacturing data were taken as an indication that the Federal Reserve will hold off on its plans to raise interest rates later this year.
Telecom stocks edged higher. Bharti Airtel (up 1.75%), Reliance Communications (up 1.15%), Idea Cellular (up 1.14%) and Mahanagar Telephone Nigam (up 0.27%) gained. Tata Teleservices (Maharashtra) (down 0.15%) edged lower.
Metal and mining stocks declined. Tata Steel (down 2.91%), Vedanta (down 3.05%), JSW Steel (down 2.14%), Steel Authority of India (down 1.87%), Jindal Steel & Power (down 1.25%), Hindustan Zinc (down 0.78%), Hindalco Industries (down 0.14%) and NMDC (down 0.06%) edged lower. National Aluminium Company (up 0.29%) edged higher.
Tech Mahindra dropped after announcing Q3 results. The stock was off 2.38% at Rs 486.95. Tech Mahindra's consolidated net profit fell 3.4% to Rs 759 crore on 1.3% increase in revenue to Rs 6701 crore in Q3 December 2015 over Q2 September 2015. The sequential decline in bottom line was due to a sharp fall in non-operational income or the so called other income. The other income dropped 61.43% to Rs 63.94 crore in Q3 December 2015 over Q2 September 2015. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 3.2% to Rs 1136 crore in Q3 December 2015 over Q2 September 2015. The EBITDA margin edged higher to 16.95% in Q3 December 2015 from 16.64% in Q2 September 2015. The result was announced after market hours yesterday, 1 February 2016.
In US dollar terms, Tech Mahindra's net profit fell 3.7% to $115 million on 0.4% growth in revenue at $1015 million in Q3 December 2015 over Q2 September 2015. EBITDA rose 2.5% at $172 million in Q3 December 2015 over Q2 September 2015. The EBITDA margin stood at 16.9% in Q3 December 2015, an increase of 30 basis points on sequential basis. In constant currency terms, Tech Mahindra's revenue rose 1.2% on sequential basis in Q3 December 2015.
Meanwhile, data released by the government after market hours yesterday, 1 February 2016, showed that the combined index of eight core industries stood at 175.7 in December 2015, which was 0.9% higher compared to the index of December 2014. The eight core industries comprise nearly 38% of the weight of items included in the Index of Industrial Production (IIP).
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