Stocks advanced on first trading day of the week boosted by the government's reduction in goods and services tax (GST) rate on 88 goods and services. The barometer index, the S&P BSE Sensex, gained 222.23 points or 0.61% at 36,718.60, as per the provisional closing data. The Nifty 50 index gained 74.55 points or 0.68% at 11,084.75, as per the provisional closing data. The Sensex scaled a record high in late trade.
Trading for the week began on an upbeat note buoyed 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. Indices hovered with modest gains in mid-morning trade. Stocks held onto modest gains amid narrow movement early afternoon and afternoon trade. Indices extended gains in mid-afternoon trade. Fresh buying pushed the key benchmark indices to day's high in late trade.
The S&P BSE Mid-Cap index rose 1.29%. The S&P BSE Small-Cap index rose 0.93%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On the BSE, 1,526 shares rose and 1,064 shares fell. A total of 186 shares were unchanged.
Index heavyweight and cigarette major ITC jumped 3.8% to Rs 283.85.
Index heavyweight Reliance Industries (RIL) fell 0.74%. 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.
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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.
Wipro lost 2.47%. 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.
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.
HDFC Bank fell 1.48%. 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.
UPL surged 15.41% after the company announced that its wholly-owned subsidiary UPL Corporation has signed a definitive agreement with Platform Specialty Products Corporation to acquire Arysta LifeScience Inc. and its subsidiaries (collectively Arysta), a global provider of innovative crop protection solutions, including biosolutions and seed treatment, for approximately $4.2 billion in cash consideration. The announcement was made after market hours on Friday, 20 July 2018.
South Indian Bank lost 17.82% after net profit fell 77.29% to Rs 23.04 crore on 5.25% increase in total income to Rs 1799.81 crore in Q1 June 2018 over Q1 June 2017. The result was announced on Saturday, 21 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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