A range bound movement was witnessed as the two key benchmark indices hovered near the flat line in mid-afternoon trade. At 14:15 IST, the barometer index, the S&P BSE Sensex, was down 39.20 points or 0.14% at 27,937.32. The Nifty 50 index was currently down 5.35 points or 0.06% at 8,585.30. 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 market breadth indicating the overall health of the market was negative. On BSE, 1,358 shares fell and 1,196 shares rose. A total of 189 shares were unchanged. The BSE Mid-Cap index was currently up 0.19%. The BSE Small-Cap index was currently up 0.35%. 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.
Pharma stocks witnessed a mixed trend. Cadila Healthcare (down 4.88%), Strides Shasun (down 0.16%), Alkem Laboratories (down 0.81%), Lupin (down 0.87%) and Cipla (down 0.17%) edged lower. Sun Pharmaceutical Industries (up 0.18%), Wockhardt (up 5.01%), Ipca Laboratories (up 0.95%), Glenmark Pharmaceuticals (up 0.95%), Divi's Laboratories (up 0.22%), Aurobindo Pharma (up 0.99%) and GlaxoSmithkline Pharmaceuticals (up 0.05%) edged higher.
Shares of Dr Reddy's Laboratories (DRL) tumbled, with the stock extending losses registered during the previous trading session triggered by weak Q1 June 2016 results. The stock was off 9.27% at Rs 3,014.90. The stock had fallen 4.37% to settle at Rs 3,322.85 yesterday, 26 July 2016. DRL's consolidated net profit fell 76.28% to Rs 153.50 crore on 14.06% decline in total income to Rs 3289.50 crore in Q1 June 2016 over Q1 June 2015. Meanwhile, a domestic brokerage has reportedly downgraded the DRL stock to ''sell'' from ''reduce'' and cuts its price target to Rs 2,500 from Rs 3,100 stating that the company's US business would face headwinds from double-digit price erosion on base business.
Realty stocks edged lower. Prestige Estates Projects (down 3.15%), Indiabulls Real Estate (down 0.9%), Sobha (down 0.64%), Housing Development & Infrastructure (down 0.44%), Oberoi Realty (down 0.58%) and Godrej Properties (down 0.18%) declined. DLF (up 0.22%), Unitech (up 2.85%) and D B Realty (up 1.26%) edged higher.
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Ingersoll-Rand (India) surged 6.68% at Rs 767.80 after net profit jumped 119.3% to Rs 15.77 crore on 7% growth in net sales to Rs 149.31 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 26 July 2016.
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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