Key benchmark indices extended initial gains and hit fresh intraday high in morning trade as firmness in Asian stocks boosted sentiment. At 10:20 IST, the barometer index, the S&P BSE Sensex was up 258.51 points or 0.93% at 27,972.88. The Nifty 50 index was currently up 76.90 points or 0.9% at 8,628. Global credit rating agency, Moody's Investors Service's statement that Rajya Sabha's approval of the Goods and Service Tax (GST) constitutional amendment bill is a credit positive for India's sovereign and non-financial corporates also lifted sentiment.
The Sensex rose 274.26 points or 0.98% at the day's high of 27,988.63 in morning trade, its highest level since 3 August 2016. The barometer index rose 81.37 points or 0.29% at the day's low of 27,795.74 in early trade. The Nifty rose 83.65 points or 0.97% at the day's high of 8,634.75 in morning trade, its highest level since 3 August 2016. The index rose 39.05 points or 0.45% at the day's low of 8,590.15 in early trade.
In overseas stock markets, Asian stocks rose driven by the Bank of England's aggressive stimulus measures, but with traders keeping a wary eye on US jobs data due later in the global trading day. The Bank of England yesterday, 4 August 2016 cut its benchmark interest rate by 25 basis points to 0.25% from 0.5%, the lowest in its 322-year history. It expects to cut the rate further in the months ahead. The central bank also revived a UK government bond-buying program, also known as quantitative easing, that has been on pause since 2012, and said it would begin buying corporate bonds. US stocks ended little changed yesterday, 4 August 2016 as investors kept to the sidelines ahead of US payrolls report for July. The monthly hiring data due later in the global day will help investors gauge the health of the economy and possibly offer insight as to when the Federal Reserve will raise interest rates again.
Closer home, the broad market depicted strength. There were more than three gainers against every loser on BSE. 1,540 shares rose and 493 shares fell. A total of 89 shares were unchanged. The BSE Mid-Cap index was currently up 0.83%, underperforming the Sensex. The BSE Small-Cap index was currently up 1.01%, outperforming the Sensex.
Telecom stocks gained. Bharti Airtel (up 0.97%), Tata Teleservices (Maharashtra) (up 0.46%) Reliance Communications (RCom) (up 1.42%) and Idea Cellular (up 1.09%) gained.
Shares of Bharti Infratel rose 0.08%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.
Metal & mining stocks gained as copper prices rose in global commodity markets. Hindustan Copper (up 2.63%), Hindalco Industries (up 2.23%), Hindustan Zinc (up 6.63%), and NMDC (up 1.18%) gained. National Aluminum Company fell 0.82%.
More From This Section
Vedanta rose 3.28% after the company said import and transit permits for the company's iron ore business at Goa was re-issued on 3 August 2016. The announcement was made after market hours yesterday, 4 August 2016. The permit was earlier cancelled on 28 July 2016. The latest permit states that Vedanta is allowed to import iron ore for domestic self consumption for its pig iron plant in Amona, Goa.
High Grade Copper for September 2016 delivery was currently up 0.11% at $2.1765 per pound on the COMEX.
Steel stocks also gained on reports that government extended a floor price for imports of steel products for a further two months, as the government tries to protect the domestic steel industry from cheap overseas shipments, especially from China. JSW Steel (up 1.33%), Bhushan Steel (up 1.06%), Jindal Steel & Power (up 2.45%), Tata Steel (up 1.59%), and Steel Authority of India (Sail) (up 2.24%) gained. The floor price, known as the minimum import price, was introduced in February - the first time the government had taken such a step in over 15 years - for a six-month period that was due to expire on 5 August 2016. An Indian government body recommended this week the introduction of provisional anti-dumping duty on imports of some hot and cold-rolled steel products.
Meanwhile, Revenue Secretary, Ministry of Finance in its presentation on next steps required for the implementation of Goods and Service Tax (GST) constitutional amendment bill after the Rajya Sabha passed the GST bill said yesterday, 4 August 2016 that the target date of GST roll out is 1 April 2017. The passage of the Constitution Amendment Bill by the Parliament shall happen by the first week of August 2016. The bill requires ratification by 50% states after its passage by the Parliament, followed by the Presidential assent of Constitution Amendment and notification in the official Gazette. Cabinet will approve formation of GST Council which will make recommendation of model GST laws. Cabinet will approve the CGST and IGST laws by Centre and SGST laws by all states which have to be passed by the Centre and by all states respectively, which should happen by winter session this year. GST rules will be notified later.
Meanwhile, global credit rating agency, Moody's Investors Service said today, 5 August 2016 that the upper house's approval of the GST bill paves the way for its implementation, a credit positive for the country's sovereign and non-financial corporates. The GST will have a positive impact on growth and tax revenues over the medium term, supporting the sovereign's credit profile. Specifically, it will remove a key hurdle to the smooth movement of goods and services, and by reducing the tax administration costs of the government and corporate sector, it will improve compliance and raise tax receipts. However, its implications over the short term will be limited, given that effective implementation will take some time, and the recommended GST rates are intended to be revenue neutral.
The GST will have a significant impact on relative prices since the effective total tax rates on some goods will fall as taxes are removed and replaced by a lower-rate GST, while other goods and some services will be subject to a higher effective tax rate, says the report. However, the GST will have a negligible impact on overall inflation, in line with the revenue-neutral objective. Over time, Moody believes the impact of the GST will be positive for most corporate sectors across the value chain, spanning procurement of raw materials, manufacturing of goods, sales and distribution of finished goods and services, logistics, and warehousing of goods from manufacturing locations to end-customers.
The India Meteorological Department in its weekly update on rainfall said yesterday, 4 August 2016 that during the week from 28 July to 3 August 2016, rainfall was above long period average (LPA) by 6% over the country as a whole. For the country as a whole, cumulative rainfall during this year's monsoon for July 2016 was 7% above LPA. For the country as a whole, cumulative rainfall during this year's monsoon has so far upto 3 August been 1% above LPA.
Powered by Capital Market - Live News