Key benchmark indices trimmed losses in mid-afternoon trade. At 14:20 IST, the barometer index, the S&P BSE Sensex was down 215.81 points or 0.77% at 27,765.90. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty was currently down 55 points or 0.64% at 8,567.90. The Sensex was currently trading below the psychologically important 28,000 level after briefly crossing that level at the onset of trading session. Indian stocks dropped today, 3 August 2016 as weakness in global stocks weighed on sentiment on the domestic bourses.
The broad market depicted weakness. There were almost two losers against every gainer on BSE. 1,720 shares fell and 890 shares rose. A total of 138 shares were unchanged. The BSE Mid-Cap index was currently down 0.93%. The decline in this index was higher than the Sensex's decline in percentage terms. The BSE Small-Cap index was currently down 0.7%. The decline in this index was lower than the Sensex's decline in percentage terms.
The Sensex fell 291.65 points or 1.04% at the day's low of 27,690.06 in afternoon trade, its lowest level since 22 July 2016. The barometer index rose 33.72 points or 0.12% at the day's high of 28,015.43 at the onset of trading session. The Nifty declined 77.75 points or 0.9% at the day's low of 8,545.15 in early afternoon trade, its lowest level since 25 July 2016. The index rose 12.55 points or 0.14% at the day's high of 8,635.45 at the onset of trading session.
In overseas stock markets, European and Asian markets edged lower after US stocks took their biggest loss in almost a month yesterday, 2 August 2016, underscoring simmering worries about global economic growth. Meanwhile, growth in China's services sector cooled in July, a private survey showed today, 3 August 2016. The Caixin/Markit services purchasing managers' index (PMI) fell to 51.7 in July on a seasonally adjusted basis, from an 11-month peak of 52.7 in June. US stocks fell yesterday, 2 August 2016 on the back of disappointing auto sales and a steep drop for retailers on forecasts of poor summer sales.
Infosys declined 0.03%. The company announced that it made an investment of $4 million in Cloudyn, a company that provides SaaS solutions for the management and optimization of hybrid, multi-cloud deployments. The announcement was made during market hours today, 3 August 2016. Cloudyn is an Israeli Corporation and originally incorporated in 1 June 2011 with presence in the US. The deal is expected to be competed by 15 August 2016.
FMCG stocks declined. Tata Global Beverages (down 0.68%), Marico (down 1.02%), Britannia Industries (down 1.4%), Procter & Gamble Hygiene and Health Care (down 1.01%), Hindustan Unilever (HUL) (down 1.13%), Dabur India (down 0.35%), Colgate Palmolive India (down 1.97%), GlaxoSmithkline Consumer Healthcare (down 0.88%), and Godrej Consumer Products (down 1.37%) declined. Bajaj Corp (up 1%), Nestle India (up 0.62%), and Jyothy Laboratories (up 0.33%) gained.
Capital goods stocks dropped. BEML (down 1.9%), Havells India (down 1.59%), L&T (down 1.35%), Crompton Greaves (down 0.52%) and Siemens (down 1.52%) declined.
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Bharat Heavy Electricals (Bhel) dropped 2.74%. The company announced that it commissioned the second 500 megawatts (MW) thermal unit at Marwa Thermal Power Station in Chattisgarh. Marwa TPS has been set by Chattisgarh State Power Generation Company (CSPGCL). The first unit of Marwa TPS was also commissioned earlier by Bhel. The announcement was made during market hours today, 3 August 2016.
Astral Poly Technik rose 0.61% after the company announced the launch of chlorinated poly vinyl chloride pipes and fittings under a new brand name. The announcement was made during trading hours today, 3 August 2016. Astral Poly Technik (Astral) has joined hands with Japan-based Sekisui Chemical Co. (Sekisui) to source chlorinated poly vinyl chloride (CPVC) resin for hot and cold water plumbing system. This strategic tie up between Astral and Sekisui enables Astral to go for backward integration into developing its own CPVC compound. On account of this tie up, Astral has launched its own brand "Astral CPVC Pro" for CPVC pipes and fittings for hot and cold water application. This product has NSF-61, ISI, UIPC approvals. The CPVC compound is also NSF certified for potable water.
Insecticides (India) rose 1.39% after the company entered in an agreement with Hyderabad Chemical for marketing the product 'SUZUKA' in India. Hyderabad Chemical is a subsidiary of Nihon Nohyaku Co, Japan. The announcement was made after trading hours yesterday, 2 August 2016.
Wim Plast rose 1.06% after the company's board of directors recommended a liberal 1:1 bonus issue at the time of announcing Q1 result after market hours yesterday, 2 August 2016. Wim Plast's net profit rose 43% to Rs 13.51 crore on 14.8% rise in net sales to Rs 99.32 crore in Q1 June 2016 over Q1 June 2015.
UFO Moviez India lost 7% after consolidated net profit fell 25.9% to Rs 9.82 crore on 2.6% rise in income from operations to Rs 133.76 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 2 August 2016. Commenting on the first quarter results, Kapil Agarwal, Joint Managing Director of UFO Moviez India said that the company's profitability was negatively impacted due to planned losses in Caravan Talkies. Efforts to improve Caravan revenues have further intensified, he said adding that this should lead to Caravan Talkies achieving cash breakeven in the second half of year ending 31 March 2017.
The outcome of a monthly survey showed that Indian service providers enjoyed a welcome upturn in demand during July, with a faster increase in new business underpinning stronger growth of output and boosting confidence. Part of the upswing in incoming new work was supported by price discounts. The seasonally adjusted Nikkei India Services Business Activity Index rose to 51.9 in July, posting above the no-change mark of 50 for the thirteenth month running, highlighting ongoing growth of output in the sector. Up from 50.3 in June, the headline index was at a three-month high and indicative of a modest rate of expansion.
Meanwhile, investors are awaiting the progress on the Goods and Services Tax (GST) constitutional amendment bill in parliament. According to reports, the long-pending GST Bill is listed for consideration and passage in Rajya Sabha today, 3 August 2016 amidst strong indications that the most far-reaching taxation reform would be supported by Congress and all other major political parties. The government is keen to get the GST Bill approved during the Monsoon Session of Parliament ending on 12 August 2016.
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 GST seeks to create a seamless national market in the country by replacing plethora of state taxes and central taxes by one tax.
Meanwhile, the India Meteorological Department (IMD) said that this year the Southwest monsoon rainfall was 11% below the Long Period Average (LPA) during June, however, July rainfall has been 7% above the LPA. The rainfall data was released yesterday, 2 August 2016. Rainfall over the country as a whole during second half of southwest monsoon season from August to September is most likely to be above normal that is more than 106% of LPA with a probability of 55%. Quantitatively, the rainfall for the country as a whole during second half of the season is likely to be 107% of LPA with a model error of 8%. The rainfall during August is likely to be 104 9% of LPA as was forecasted in June. The rainfall in monsoon season from June to September over the country as a whole is likely to be 106% 4% of LPA as was forecasted in June.
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