The market was hovering in a narrow range with small gains in afternoon trade. At 13:18 IST, the barometer index, the S&P BSE Sensex, was up 71.31 points or 0.20% at 36,567.68. The Nifty 50 index was up 29.75 points or 0.27% at 11,039.95. Sentiment was boosted after the government cut goods and services tax (GST) rate on 88 goods and services.
Trading for the week began on an upbeat note as stocks edged higher in early trade boosted by the Narendra Modi government winning the no-confidence motion in the Lok Sabha on Friday, 20 July 2018. Stocks trimmed gains in morning trade. Key benchmark indices hovered with modest gains in afternoon trade.
The S&P BSE Mid-Cap index was up 0.53%. The S&P BSE Small-Cap index was up 0.37%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On the BSE, 1,303 shares rose and 1,125 shares fell. A total of 137 shares were unchanged.
ITC (up 3.91%), Bharti Airtel (up 2.79%), Hindustan Unilever (up 2.02%), NTPC (up 1.90%) and Adani Ports & Special Economic Zone (up 1.66%), were the major Sensex gainers.
Shares of two wheeler companies slumped. Hero MotoCorp (down 8.17%), Bajaj Auto (down 5.89%) and TVS Motor Company (down 4.40%), edged lower.
IT major Wipro was down 2.54%. On a consolidated basis, Wipro's net profit rose 16.27% to Rs 2093.80 crore on 1.52% increase in net sales to Rs 13977.70 crore in Q1 June 2018 over Q4 March 2018. The result was announced after market hours on Friday, 20 July 2018.
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IT services segment revenue rose 2.2% to Rs 13700 crore in Q1 June 2018 over Q4 March 2018. Wipro expects revenue from its IT services business to be in the range of $2,009 million to $2,049 million. This translates to a sequential growth of 0.3% to 2.3%, excluding the impact of the divestment of its hosted data center services business which concluded in the quarter ended 30 June 2018.
Index heavyweight Reliance Industries (RIL) was down 0.98%. Reliance Brands, a subsidiary of RIL, has purchased an additional 8.14% equity stake in Genesis Colors (GCL) for about Rs 34.17 crore, taking its total stake in GCL to 9.29%. The announcement was made on Saturday, 21 July 2018.
GCL was incorporated in November, 1998 and is in the business of retailing and wholesale of branded readymade garments, bags, footwear and accessories directly and through its subsidiary/Joint ventures. GCL belongs to a similar industry as Reliance Brands. This acquisition will add to the existing portfolio of branded fashion retail outlets. GCL's annual turnover in FY 2017-18 is Rs 86.02 crore (provisional). GCL reported a turnover of Rs 80.04 crore and Rs 114.16 crore in FY 2016-17 and FY 2015-16, respectively.
HDFC Bank was down 1.19%. The bank's net profit rose 18.17% to Rs 4601.44 crore on 18.85% increase in total income to Rs 26367.04 crore in Q1 June 2018 over Q1 June 2017. The bank's gross non-performing assets (NPAs) stood at Rs 9538.62 crore as on 30 June 2018 as against Rs 8606.97 crore as on 31 March 2018 and Rs 7242.93 crore as on 30 June 2017. The result was announced on Saturday, 21 July 2018.
The ratio of gross NPAs to gross advances stood at 1.33% as on 30 June 2018 as against 1.30% as on 31 March 2018 and 1.24% as on 30 June 2017. The ratio of net NPAs to net advances stood at 0.41% as on 30 June 2018 as against 0.40% as on 31 March 2018 and 0.44% as on 30 June 2017. The bank's provisions and contingencies rose 4.53% to Rs 1629.37 crore in Q1 June 2018 over Q1 June 2017. Provision coverage ratio of the bank was at 70% as on 30 June 2018.
On the political front, the Narendra Modi government won the no-confidence motion in the Lok Sabha on Friday, 20 July 2018 following a 12-hour debate in the Lower House. In a 451-member House that voted, 126 members voted in favour of the motion, 325 votes went against it. The no-confidence motion was brought by the Telugu Desam Party (TDP) and supported by several Opposition parties including the Congress.
Meanwhile, the GST Council in its 28th meeting held on Saturday, 21 July 2018 announced reduction in tax rates on 88 goods and services. The revised tax rates will come into effect from 27 July 2018.
Overseas, European shares were trading lower, mimicking weaker trading in markets overseas. Asian stocks were mixed after the Bank of Japan offered to buy bonds at the first fixed-rate operation since February, in a sign the central bank was trying to rein yields. US stocks closed mostly lower on Friday, 20 July 2018 after President Donald Trump's latest verbal salvos fanned investor concern that a global trade war is escalating.
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