Key benchmark indices edged higher in early trade as reports suggesting that the long-pending GST Bill is listed for consideration and passage in Rajya Sabha tomorrow, 3 August 2016 boosted sentiment. At 9:30 IST, the barometer index, the S&P BSE Sensex was up 75.99 points or 0.27% at 28,079.11. The Nifty 50 index was currently up 16.85 points or 0.2% at 8,653.40. FMCG and metal stocks led gains on the bourses.
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. Meanwhile, Japan's Prime Minister Shinzo Abe's cabinet is reportedly likely to approve a 28 trillion yen ($273 billion) stimulus package today, 2 August 2016, though direct fiscal spending will total only about 7 trillion yen. 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.
Closer home, the market breadth indicating the overall health of the market was strong. On BSE, 935 shares rose and 552 shares declined. A total of 56 shares were unchanged. The BSE Mid-Cap index was currently up 0.27%. The BSE Small-Cap index was currently up 0.25%. Both these indices underperformed the Sensex.
NTPC rose 0.16% after the company announced that its board of directors at a meeting held on Friday, 29 July 2016, approved the issue of secured/unsecured, redeemable, taxable/ tax-free, cumulative/non-cumulative, non-convertible debentures (bonds/NCDs) upto Rs 15000 crore during the period commencing from the date of passing of Special Resolution in the Annual General Meeting (AGM), to be held on 20 September 2016, till completion of one year thereof or the date of next AGM in the financial year 2017-18 whichever is earlier. The announcement was made after market hours yesterday, 1 August 2016.
Separately, NTPC announced after market hours yesterday, 1 August 2016 that it has commissioned a 50 megawatts (MW) capacity of NP Kunta Ultra Mega Solar Power Project Stage-I at Anantapuramu on 29 July 2016. With this the installed capacity of NP Kunta Ultra Mega Solar Power Project Stage-I at Anantapuramu has become 250 MW and that of NTPC Group has become 47,228 MW.
Passenger car major Maruti Suzuki India (MSIL) gained 2% after the company announced an increase in prices of select models ranging from Rs 1,500 to Rs 5,000 ex-showroom Delhi with effect from 1 August 2016. In case of newly launched models like Vitara Brezza and Baleno, the prices are being increased by upto Rs 20,000 and upto Rs 10,000 respectively, MSIL said. This price revision is based on factors like segment wise demand, forex movements and strategic objectives of the company, MSIL said in a statement. The announcement was made after market hours yesterday, 1 August 2016.
Hero MotoCorp (HMCL) rose 0.14% after the company announced that its total two-wheelers sales rose 9.13% to 5.32 lakh units in July 2016 over July 2015. The announcement was made after market hours yesterday, 1 August 2016. In July 2016, HMCL commenced retail sales of Splendor iSmart 110 - the first motorcycle to have been completely designed and developed by its in-house R&D team at the state-of-the-art, world class Hero Centre of Innovation and Technology in Jaipur. The initial customer response to the new bike has been positive, the company said. With the above average monsoon and implementation of the seventh pay commission recommendations, the company remains cautiously optimistic about a positive turnaround in the industry in the second half of the year, HMCL said in a statement.
ACC dropped 0.98% as the stock turned ex-dividend today, 2 August 2016 for interim dividend of Rs 11 per share for the year ending 31 December 2016 (FY 2016).
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Ambuja Cements declined 0.68% as the stock turned ex-dividend today, 2 August 2016 for interim dividend of Rs 1.60 per share for the year ending 31 December 2016 (FY 2016).
Tata Motors gained 0.09% after the company announced that Tata Motors passenger and commercial vehicle sales (including exports) rose 7% to 43,160 vehicles in July 2016 over July 2015. The company's domestic sales of Tata commercial and passenger vehicles rose 8% to 37,789 units in July 2016 over July 2015. The company's sales from exports rose 6% to 5,371 units in July 2016 over July 2015. The announcement was made after market hours yesterday, 1 August 2016.
Drug major Lupin rose 0.77% after the company announced that its Japanese subsidiary Kyowa Pharmaceutical Industry Co., has entered into a strategic asset purchase agreement with Shionogi & Co., on 1 August 2016, to acquire 21 long-listed products from the Japanese pharma major, effective 1 December 2016, subject to certain closing conditions and regulatory approvals including the transfer of marketing authorization of the products to Kyowa. The announcement was made before trading hours today, 2 August 2016.
With the vision of growing globally as a drug discovery-based pharmaceutical company, Shionogi is focusing its resources on its core therapeutic and marketing areas, while continuing to create innovative medicines to support future growth and to strengthen its business operations. As a part of this growth strategy, Shionogi would transfer 21 long-listed products to Kyowa, the Japanese subsidiary of Lupin. Kyowa is amongst the top 10 Generic companies in Japan and a market leader in Central Nervous System (CNS) space well known for its "AMEL" brand, in addition to other generic pharmaceutical products in its portfolio. With this acquisition, Kyowa will rank 6th amongst generic companies in Japan. The 21 products cover therapy areas such as Central Nervous System (CNS), Oncology, Cardiovascular and Antiinfectives. These 21 products had sales of 9,400 million yen ($90 million) collectively on NHI price basis. Under the terms of this agreement, Kyowa will book the sales of the 21 products after 1 December 2016, and Shionogi will receive 15.4 billion yen from Kyowa.
On macro front, the index of 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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