A bout of volatility was witnessed in early afternoon trade as key benchmark indices trimmed intraday gains. At 12:20 IST, the barometer index, the S&P BSE Sensex was up 78.57 points or 0.28% at 28,081.69. The gains for the Nifty 50 index were lower than the Sensex's gains in percentage terms. The Nifty was currently up 16.20 points or 0.19% at 8,652.75. Indian stocks rose today, 2 August 2016 as reports suggesting that the long-pending GST Bill is listed for consideration and passage in Rajya Sabha tomorrow, 3 August 2016 boosted sentiment. Data showing a good growth of eight core industries in June also supported gains on the bourses.
The market breadth indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,223 shares fell and 1,204 shares rose. A total of 128 shares were unchanged. The BSE Mid-Cap index was currently up 0.44%, outperforming the Sensex. The BSE Small-Cap index was currently up 0.16%, underperforming the Sensex.
In overseas stock markets, most Asian stocks dropped, with stocks taking cues from a modestly lower day on Wall Street overnight as US crude oil prices slid. US stocks lost momentum to finish mostly lower yesterday, 1 August 2016 as crude-oil futures returned to bear-market territory and weaker-than-expected manufacturing data raised doubts about the strength of the economy.
Metal & mining stocks were mixed. JSW Steel (up 0.15%), Hindustan Copper (up 1.61%), Hindalco Industries (up 0.48%), Tata Steel (up 0.92%), Steel Authority of India (Sail) (up 0.32%), and NMDC (up 0.15%) gained. Bhushan Steel (down 0.47%), Vedanta (down 1.6%), Jindal Steel & Power (down 2.13%), Hindustan Zinc (down 0.38%), and National Aluminum Company (down 2.97%) declined.
High Grade Copper for September 2016 delivery was currently up 0.45% at $2.2095 per pound on the COMEX.
FMCG stocks gained after government weather agency forecast above normal rainfall for the second half of southwest monsoon season from August to September. FMCG firms derive substantial revenue from rural India. Nestle India (up 0.77%), Marico (up 5.73%), Britannia Industries (up 0.53%), Jyothy Laboratories (up 0.94%), Procter & Gamble Hygiene and Health Care (up 0.83%), Hindustan Unilever (HUL) (up 1.05%), Dabur India (up 0.55%), Colgate Palmolive India (up 2.44%), and Godrej Consumer Products (up 0.53%) gained. Tata Global Beverages (down 0.39%), GlaxoSmithkline Consumer Healthcare (down 0.28%), and Bajaj Corp (down 1.51%) declined.
The India Meteorological Department (IMD) said in its forecast for the rainfall during the second half of monsoon season yesterday, 1 August 2016 that 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 i.e. more than 106% of long period average (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 during 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. The quantum of the rainfall and its spatial and temporal distribution are critical for the country's agriculture. Around 70% of the country's farmlands are rain-fed.
Delta Corp rose 5.78% after the company reported consolidated net profit of Rs 20.08 crore in Q1 June 2016 as compared with net loss of Rs 1 crore in Q1 June 2015. The result was announced after market hours yesterday, 1 August 2016. Delta Corp attributed the strong Q1 June 2016 results to better targeted marketing and getting on board the right customers, resulting in a stable income flow; increasing customer numbers and Goa, where the bulk of the company's operations lie, has become a year-round destination rather than seasonal. This has boosted revenues and positively impacted profitability, Delta Corp said.
Delta Corp Chairman Jaydev Mody said that the company's businesses are gaining a strong foothold. The income streams are steady and are bound to translate into greater revenue and growth in the months to come, Jaydev Mody said. The company is confident that this momentum will continue, he added.
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InterGlobe Aviation slumped 6.21% after net profit declined 7.38% to Rs 591.77 crore on 8.51% rise in net sales to Rs 4545.19 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 1 August 2016. InterGlobe Aviation's earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) fell 1.47% to Rs 1554 crore in Q1 June 2016 over Q1 June 2015. EBITDAR margin was reported at 33.9% in Q1 June 2016, lower than 37.4% in Q1 June 2015. The airline's other operating income grew 48.5% to Rs 33.66 crore in Q1 June 2016 over Q1 June 2015. The average fare for the airline declined 10.9% to Rs 4032 in Q1 June 2016 from Rs 4524 in Q1 June 2015. Passengers increased by 20% to 9.85 million in Q1 June 2016 over Q1 June 2015. Load factor, however, declined to 83.3% in Q1 June 2016 from Rs 87.9% in Q1 June 2015.
On macro front, eight core industries comprising nearly 38% of the weight of items included in the Index of Industrial Production (IIP) increased 5.2% in June 2016 over June 2015, compared to 2.8% growth in May 2016 and 3.1% growth in June 2015. Its cumulative growth during the three months period from April to June 2016 was 5.4%. The data was announced after market hours yesterday, 1 August 2016.
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 tomorrow, 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.
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