Amid a divergent trend among various index constituents, the Nifty 50 index traded near the flat line. The barometer index, the S&P BSE Sensex, languished in negative zone. At 13:15 IST, the Sensex was down 43.48 points or 0.16% at 27,933.04. The Nifty was currently down 6.40 points or 0.07% at 8,584.25. The Sensex was currently trading below the psychologically important 28,000 level. The Sensex has alternately swung above and below the psychologically important 28,000 level so far during the trading session after surpassing that mark in initial trade.
The Sensex lost 76.59 points or 0.27% at the day's low of 27,899.93 in early afternoon trade, its lowest level since 25 July 2016. The barometer index jumped 234.36 points or 0.83% at the day's high of 28,210.88 in morning trade, its highest level since 10 August 2015. The Nifty lost 18.60 points or 0.22% at the day's low of 8,572.05 in early afternoon trade, its lowest level since 25 July 2016. The index rose 74.35 points or 0.86% at the day's high of 8,665 in morning trade, its highest level since 17 April 2015.
The market breadth indicating the overall health of the market was negative. On BSE, 1,388 shares fell and 1,114 shares rose. A total of 178 shares were unchanged. The BSE Mid-Cap index was currently up 0.09%. The BSE Small-Cap index was currently up 0.19%. Both these indices outperformed the Sensex.
In overseas stock markets, Asian and European stocks edged higher after media reports suggested that Japanese Prime Minister Shinzo Abe plans to introduce an economic stimulus plan worth more than 28 trillion yen next week. In Japan, the Nikkei 225 Average ended 1.72% higher. In addition to fiscal stimulus from the government, global investors are hoping for further easing of monetary policy from the Bank of Japan (BOJ) after the conclusion of a two-day monetary policy meeting on 28-29 July 2016. Strength in the yen against the dollar post last month's Brexit vote and data showing a slowdown in the Japanese economy have triggered expectations of further easing of monetary policy from the BOJ. A stronger yen hurts the competitiveness of Japanese exporters.
Most US stocks edged higher in a lacklustre trading session yesterday, 26 July 2016. Investors were reluctant to carve out big positions ahead of the monetary policy outcome from the Federal Reserve. The Federal Open Market Committee (FOMC) is widely expected to keep the benchmark fed funds rates unchanged after the conclusion of two-day monetary policy today, 27 July 2016. Market participant will scrutinize the Fed statement for clues on policy direction. The Fed has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015.
Two-wheeler maker Bajaj Auto was down 0.41% at Rs 2,659.30 after the company reported a minuscule growth in bottom line in Q1 June 2016 over Q1 June 2015. The company's net profit rose 2.19% to Rs 978.37 crore on 2.72% increase in total income to Rs 6355.81 crore in Q1 June 2016 over Q1 June 2015. Operating earnings before interest, taxes, depreciation and amortization (EBITDA) rose 3.02% to Rs 1227 crore in Q1 June 2016 over Q1 June 2015. Operating EBITDA margin was reported at 21.2% in Q1 June 2016, slightly higher than 21.1% in Q1 June 2015.
On a consolidated basis, the company's net profit rose 13.77% to Rs 1039.70 crore on 4.22% increase in total income to Rs 6355.84 crore in Q1 June 2016 over Q1 June 2015. The result was announced during trading hours today, 27 July 2016.
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Bajaj Auto said in a statement that the company continues to witness headwinds in exports markets viz. Nigeria and Egypt. The company said its exports have been adversely impacted by external factors viz. non availability of foreign currency and depreciation of the local currency.
Most power generation stocks edged lower. Jaiprakash Power Ventures (down 3.96%), JSW Energy (down 2.14%), Reliance Infrastructure (down 0.97%), Reliance Power (down 0.92%), GMR Infrastructure (down 0.56%), NHPC (down 0.39%), Tata Power (down 0.35%), Torrent Power (down 0.35%) and Adani Power (down 0.18%), edged lower. NTPC (up 0.09%) and CESC (up 0.22%), edged higher.
FMCG shares were mixed. Marico (down 2.83%), Nestle India (down 1.36%), Bajaj Corp (down 0.9%), Procter & Gamble Hygiene & Health Care (down 0.53%), Colgate Palmolive (India) (down 0.49%), Hindustan Unilever (down 0.33%), Jyothy Laboratories (down 0.22%) and Dabur India (down 0.21%), edged lower. Godrej Consumer Products (up 0.35%), GlaxoSmithKline Consumer Healthcare (up 0.37%), Britannia Industries (up 0.62%) and Tata Global Beverages (up 2.06%), edged higher.
Meanwhile, according to reports, the empowered committee of state finance ministers which met Finance Minister Arun Jaitley yesterday, 26 July 2016, has reached a consensus on key aspects of the constitutional amendment bill on Goods and Services Tax (GST). The committee has decided to keep the main GST rate low, according to reports. The GST bill is likely to be moved in the Rajya Sabha next week. The Rajya Sabha has already allotted five hours for discussion on the GST bill, according to media reports.
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. The month-long monsoon session of the parliament will conclude on 12 August 2016.
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