Trading of Nifty 50 index futures on the Singapore stock exchange indicates a flat opening. In overseas stock markets, Asian stocks were mixed as markets cautiously awaited the release of US jobs data scheduled for release tomorrow, 2 September 2016.
China's official manufacturing purchasing managers' index, a gauge of factory activity, rose to 50.4 in August, returning to expansionary territory, official data showed today, 1 September 2016. The rise from July's 49.9 could be a sign of improvement in the world's second-largest economy. A PMI reading above 50 indicates an expansion in manufacturing activity, while a reading below 50 points to a contraction. However, the Caixin China manufacturing purchasing managers' index, a private gauge of nationwide factory activity, fell to 50 in August from 50.6 in July.
US stocks finished lower yesterday, 31 August 2016, as oil prices fell and promising economic data supported the case for a Federal Reserve rate hike this year. Data showed yesterday, 31 August 2016 the private sector created 177,000 jobs in August, in line with expectations, and contracts to buy previously owned homes surged in July, suggesting the economy was regaining sufficient momentum for the Federal Reserve to raise interest rates this year.
Closer home, foreign portfolio investors (FPIs) bought shares worth a net Rs 854.19 crore yesterday, 31 August 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 847.70 crore yesterday, 31 August 2016, as per provisional data.
On macro front, India's Gross Domestic Product (GDP) growth at constant (2011-12) prices slowed down to 7.1% in Q1 June 2016, as against 7.9% in Q4 March 2016 and 7.5% increase in Q1 June 2015.
Another data showed the index of eight core infrastructure sector rose 3.2% in July 2016 over July 2015, while its cumulative growth stood at 4.9% in April to July 2016. Both the GDP and core infra data were announced after market hours yesterday, 31 August 2016.
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Markit Economics will announce the India Manufacturing PMI for August 2016 today, 1 September 2016.
Among corporate news, Tata Power Company after market hours yesterday, 31 August 2016 announced that the company operating through its Strategic Engineering Division (SED), has signed a letter of intent (LOI) with Javelin Joint Venture team, a partnership between Raytheon and Lockheed Martin, to explore co-development and production of the Javelin anti-armour missile system. As part of the LOI, the Javelin Joint Venture (JVV) and Tata Power Company SED will create a strategy to co-develop and produce Javelin missile system and integrate platform mounts to meet Indian requirements. This includes ground combat vehicles, dismounted infantry and rotorcraft applications, Tata Power Company said.
HDFC said before market hours today, 1 September 2016 that pursuant to the approval of the board of directors of the company at its meetings held on 31 August 2016 the company is contemplating, subject to market conditions, undertaking the third issuance of Rupee denominated bonds to overseas investors amounting to Rs 1000 crore. Issue opens on 1 September 2016 and closes on 2 September 2016.
Cement stocks will be in focus. The Competition Commission of India (CCI) has imposed penalties upon 10 cement companies and their trade association i.e. Cement Manufacturers Association (CMA) for cartelisation in the cement industry. The final order has been passed by CCI pursuant to the directions issued by Competition Appellate Tribunal remanding the matter back while setting aside the original order of CCI.
The information in the present case was filed by Builders Association of India under Section 19(1)(a) of the Competition Act, 2002 (the Act) against the cement companies and CMA alleging contravention of the provisions of the Act. While holding the cement companies and CMA in contravention of the Act, it was noted by CCI that the cement companies used the platform provided by CMA and shared details relating to prices, capacity utilisation, production and dispatch and thereby restricted production and supplies in the market, contravening the provisions of Section 3(1) read with Section 3(3)(b) of the Act. Further, CCI also found the cement companies to be acting in concert in fixing prices of cement in contravention of the provisions of Section 3(1) read with Section 3(3)(a) of the Act.
Accordingly, penalties of Rs 1147.59 crore was imposed on ACC, Rs 1163.91 crores on Ambuja Cements, Rs 167.32 crore on Binani, Rs 274.02 crore on Century, Rs 187.48 crore on India Cements, Rs 128.54 crore on J K Cements, Rs 490.01 crore on Lafarge, Rs 258.63 crore on Ramco, Rs 1175.49 crore on UltraTech Cement and Rs 1323.60 crore on Jaiprakash Associates have been imposed by CCI. In addition, a penalty of Rs 0.73 crore has also been imposed on CMA. While imposing penalties, the Commission noted the action of the cement companies and CMA as being not only detrimental to the interests of consumers but also as detrimental to the whole economy, as cement is a critical input in construction and infrastructure industry - and thus vital for the economic development of the country.
The cement companies and CMA have been directed to cease and desist from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market. CMA has been further directed to disengage and disassociate itself from collecting wholesale and retail prices through member cement companies or otherwise. Also, CMA has been restrained from collecting and circulating the details relating to production and dispatch by cement companies.
While highlighting the role played by trade associations in promoting the interests of their members and the industry they serve, CCI noted in its order that cement companies were interacting using the platform made available by the trade association (CMA). Such interactions have been found to have transgressed the limits in sharing of information and extended to discussions on cost, prices, production and capacities, thereby, facilitating the enterprises to determine prices and production in a concerted and collusive manner, than in a competitive manner. CCI cautioned that all those who participate in association activities, through meetings or otherwise, whether as a member or an executive or manager or employee, have to be sensitive to the discussions not transgressing advertently or otherwise into anti-trust behaviour or practices. Vide separate order, CCI has also imposed a penalty of Rs 397.51 crore upon Shree Cement in RTPE No. 52 of 2006.
Key benchmark indices edged higher on last trading day of the month yesterday, 31 August 2016 as sentiment was boosted after the Union Cabinet today, 31 August 2016 gave ex-post-facto approval for the foreign direct investment (FDI) policy amendments announced by the Government in June this year. The Sensex rose 109.16 points or 0.39% to settle at 28,452.17, its highest closing level since 22 July 2015.
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