Key benchmark indices held firm in mid-afternoon trade as firmness in global stocks perked up sentiment. At 14:20 IST, the barometer index, the S&P BSE Sensex was up 270.34 points or 0.87% at 31,191.95. The Nifty 50 index rose 81.30 points or 0.85% at 9,602.20.
The sentiment was boosted after the biggest tax reform, the Goods and Services Tax came into force from 1 July 2017. The gains were also supported by a sharp jump in index heavyweight ITC.
Trading for July started on a buoyant note, with indices witnessing a gap-up opening. Indices held firm later during the session.
Among other indices, the S&P BSE Mid-Cap index rose 0.88%. The S&P BSE Small-Cap index gained 0.96%. Both these indices outperformed the Sensex.
The broad market depicted strength. There were more than two gainers against every loser on BSE. 1,747 shares rose and 818 shares fell. A total of 145 shares were unchanged.
Shares of power generation and power distribution companies were mixed. Torrent Power (up 0.79%), NHPC (up 1.43%), Adani Power (up 0.17%), Power Grid Corporation of India (up 0.38%), and Reliance Infrastructure (up 2.19%) gained. GVK Power & Infrastructure (down 1.16%), NTPC (down 1.13%), and Reliance Power (down 0.47%) declined.
Tata Power Company declined 0.5%. The company announced that the company through Adjaristsqali Georgia LLC (AGL), its joint venture with Norway's Clean Energy Invest AS Norway (Clean Energy) and IFC InfraVentures (IFC), a member of the World Bank Group announced completion of construction of its 187 megawatts (MW) Shuakhevi hydro power project in Georgia. The project investment cost was over $420 million. The announcement was made during market hours today, 3 July 2017.
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The power generated by the project will be exclusively sold within Georgia throughout the winter which is a period of energy deficit.
Shares of psu coal mining major Coal India gained 1.45%. The company achieved production of 92% of target at 39.66 million tonnes in June. The company achieved offtake of 94% of target at 45.67 million tonnes in June. The announcement was made on Sunday, 2 July 2017.
Fertiliser stocks rose after Union Minister for Chemicals & Fertilizers and Parliamentary Affairs, Ananthkumar said that it was decided to reduce the GST rate of fertilizers from the existing 12% to 5%. Chambal Fertilisers & Chemicals (up 2.09%), Rashtriya Chemicals and Fertilisers (up 0.13%), Fertilisers & Chemicals Travancore (up 3.99%), National Fertilizers (up 3.45%), Coromandel International (up 2.58%), Tata Chemicals (up 2.5%), Gujarat State Fertilizers & Chemicals (up 4.86%) and Deepak Fertilisers & Petrochemicals Corporation (up 6.81%) edged higher
This decision was primarily taken in the interests of the farmers. The government has also taken up with the industry to pass on the benefit to the farmers, the minister informed.
Hero MotoCorp rose 1.6% after the company's sales rose 14% to 6.24 lakh units in June 2017 over June 2016. The announcement was made during market hours today, 3 July 2017. Hero MotoCorp has clocked such robust volumes in the month of June on account of strong growth in both motorcycles and scooters.
The company has passed on the benefit of GST to its customers with a reduction in the prices of models across its product portfolio in most of the states from 1 July 2017. The quantum of reduction ranges from Rs 400 to Rs 1800 on mass-selling models. The actual benefit varies from state to state, depending on the pre and post-GST rates. Some of the premium segment models see a reduction of up to Rs 4000 in certain markets. In one or two states, such as Haryana, where the pre-GST rates were lower than the post-GST rate, the prices of a few models have gone up marginally.
On macroeconomic data front, Markit Economics said during market hours today, 3 July 2017 that Purchasing Managers' Index (PMI) data highlighted a slowdown in growth across India's manufacturing sector during June. A softer rise in factory new orders resulted in weaker growth of production, with rates of expansion at four-month lows in both cases. Down from 51.6 in May to a four-month low of 50.9 in June, the Nikkei India Manufacturing PMI pointed to a slight and weaker improvement in the health of the sector.
Meanwhile, the output of eight core infrastructure industries, comprising 40.27% of the weight of items included in the Index of Industrial Production (IIP), improved 3.6% in May 2017. The cumulative output of eight core infrastructure industries moved up 3.2% in April-May 2017-18. The data was announced after market hours on Friday, 30 June 2017.
The Goods and Services Tax came into force from 1 July 2017, amid a historic midnight session in the Central Hall of Parliament on 30 June 2017. President Pranab Mukherjee, Prime Minister Narendra Modi, and Finance Minister Arun Jaitley addressed the gathering, before the President and the Prime Minister pressed a button to mark the launch of GST. The biggest tax reform since independence - GST - will pave the way for realization of the goal of One Nation - One Tax - One Market.
Overseas, European stocks edged higher entering into the new month on a solid footing after markets posted gains for the first half of the year. Factories across the euro zone rounded off the first half of 2017 by ramping up activity at the fastest rate for over six years as rising prices failed to put a dent in orders, a survey showed. IHS Markit's Manufacturing Purchasing Managers' Index for the euro zone rose to 57.4 in June, up from May's 57 and pipping the preliminary reading of 57.3.
Most Asian stocks gained. US stocks closed mixed on Friday, 30 June 2017.
On macro economic data front, a private gauge of China's factory activity rebounded in June to show an expansion, indicating an improvement in the manufacturing sector that tallied with official data released last week. The Caixin China manufacturing purchasing managers' index rose to 50.4 in June from 49.6 in May, showing a rise in activity, Caixin Media Co. and research firm Markit said. The 50 level separates an expansion in manufacturing activity from a contraction.
Japanese manufacturing activity expanded at a slightly slower pace in June. The final June Markit/Nikkei Japan Manufacturing PMI was 52.4, higher than a preliminary reading of 52 but still below a final 53.1 in May.
Japan's business confidence among the nation's large manufacturers strengthened to its highest level in more than three years in the second quarter, according to a central bank survey. The main index measuring large manufacturers' confidence rose to plus 17 in the April-June period from plus 12 previously, according to the Bank of Japan's quarterly tankan survey.
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