Key benchmark indices eked out small gains after media reports suggested that the Goods and Services Tax (GST) constitutional amendment bill has been listed for discussion in the Rajya Sabha next week. The barometer index, the S&P BSE Sensex, rose 99.05 points or 0.36% at 27,809.57, as per the provisional closing data. The Nifty 50 index rose 31.10 points or 0.37% to 8,541.20, as per the provisional closing data.
The Sensex rose 121.93 points, or 0.44% at the day's high of 27,832.45 in late trade. The index fell 64.31 points, or 0.23% at the day's low of 27,646.21 in mid-morning trade, its lowest level since 19 July 2016. The Nifty rose 38.85 points, or 0.46% at the day's high of 8,548.95 in late trade. The index fell 20.30 points, or 0.24% at the day's low of 8,489.80 in early trade, its lowest level since 19 July 2016.
The market breadth indicating the overall health of the market was positive. On BSE, 1,449 shares rose and 1,107 shares fell. A total of 192 shares were unchanged. The BSE Mid-Cap index provisionally rose 0.96%. The BSE Small-Cap index provisionally rose 0.80%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 3291 crore, lower than turnover of Rs 3388.14 crore registered during the previous trading session.
As per media reports, the Goods and Services Tax (GST) constitutional amendment bill has been listed for discussion in the Rajya Sabha next week. The GST bill, which has been approved by the Lok Sabha is pending in the Rajya Sabha because of opposition to the bill in its current form by the Congress party. A constitutional amendment bill requires at least 50% attendance and support of two-third of those present and voting in the house. For the GST bill to become a law, the bill also needs to be approved by half the state assemblies after its passage in the parliament. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. The month-long monsoon session of the parliament will conclude on 12 August 2016.
In overseas stocks markets, European stocks reversed initial losses after a flash reading on the eurozone composite Purchasing Managers' Index (PMI) for July 2016 beat expectations. The flash composite PMI compiled by Markit Economics came in at 52.9. The flash services PMI came in at 52.7, beating expectations. On the other hand, the flash manufacturing PMI came in at a two-month low of 51.90 and fell short of market expectations.
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European stocks ended on a mixed note yesterday, 21 July 2016, after European Central Bank (ECB) held rates unchanged after a monetary policy review. ECB emphasized that it intends to keep rates at current or lower levels for an extended period and that its program of monthly bond buys would run until at least March 2017, and possibly beyond.
Earlier during the global day, Japanese stocks led losses for Asian equities after comments by Bank of Japan (BOJ) Governor Haruhiko Kuroda dashed hopes for so-called helicopter money or ultra-aggressive easing measures from the Japanese central bank. The Nikkei 225 Average settled 1.09% lower. In an interview to a British radio station taped in mid-June and broadcast yesterday, 21 July 2016, Kuroda ruled out the idea of using helicopter money -- or directly underwriting the budget deficit -- to combat deflation. The BOJ is scheduled to review monetary policy at a two-day meeting on 28-29 July 2016.
US stocks edged lower yesterday, 21 July 2016, with the Dow Industrial Average snapping a nine-day string of gains, as a hot equity market cooled ahead of key central-bank meetings across the globe.
Power Grid Corporation of India rose 2.92% to Rs 167.50 after the company's board of directors in a meeting held on 20 July 2016 accorded approval for eleven investment proposals aggregating Rs 2734.94 crore. The announcement was made after market hours yesterday, 21 July 2016.
Index heavyweight and housing finance major HDFC rose 1.88% to Rs 1,357. The stock hit a high of Rs 1,358.50 and a low of Rs 1,327 in intraday trade. The company after market hours yesterday, 21 July 2016, announced that it has completed the issue of rupee denominated bonds aggregating to Rs 3000 crore. HDFC had last week announced successfully raising Rs 3000 crore in first overseas issue of rupee denominated bonds by an Indian company.
Cigarette major ITC edged lower in volatile trading after announcing first quarter results. The stock shed 0.46% at Rs 249.50. The stock hit a high of Rs 256 and a low of Rs 247.20 in intraday trade. The company's net profit rose 10.09% to Rs 2384.67 crore on 8.61% increase in total income to Rs 13673.58 crore in Q1 June 2016 over Q1 June 2015. The result was announced after trading hours yesterday, 21 July 2016.
ITC said it delivered steady performance in Q1 June 2016 despite a challenging operating environment marked by continuing pressure on legal cigarette industry volumes and persistently sluggish demand conditions prevailing in the FMCG industry. Operating conditions in the hotels and paperboards, paper and packaging segment also remained subdued.
ITC said that the performance of the cigarette business during the quarter remained subdued on account of continued pressure on the legal cigarette industry in India. Over the last 4 years, the incidence of excise duty and VAT on cigarettes, at a per unit level, has gone up cumulatively by 118% and 142% respectively thereby exerting severe pressure on legal industry volumes even as illegal trade grows unabated. High incidence of taxation and a discriminatory regulatory regime on cigarettes in India have over the years led to a significant shift in tobacco consumption to lightly taxed or tax-evaded tobacco products like bidi, khaini, chewing tobacco, gutkha and illegal cigarettes which presently constitute over 89% of total tobacco consumption in the country.
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