The market may open with decent gains after the Rajya Sabha yesterday, 3 August 2016 passed the Goods and Services Tax (GST) Constitutional Amendment Bill which the Lok Sabha had already approved last year. The exact rate of the tax will only be decided in the weeks or months ahead. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could gain 52.50 points at the opening bell. The main objective of the GST is to eliminate excessive taxation. GST is a uniform indirect tax levied on goods and services across a country. The measure would harmonize 11 state and central levies into a national sales tax, reducing business transaction costs. The passage of the constitutional amendment bill kicks off a legislative marathon in which both the federal and state parliaments will need to pass further laws setting the rate and scope of the GST.
In overseas stock markets, Asian stocks rebounded from their worst day since the aftermath of the Brexit vote, as crude oil held onto its recovery and high-yielding currencies climbed. US stocks edged higher yesterday, 3 August 2016 as energy companies climbed with the price of oil. Banks also rose, and investors sold traditionally safe stocks. A survey showed that hiring by private companies continued at a solid but uninspiring clip in July. The Bank of England is expected to cut benchmark interest rates after a monetary policy meet later in the global day today, 4 August 2016.
Closer home, foreign portfolio investors (FPIs) bought shares worth a net Rs 578.17 crore yesterday, 3 August 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 800.75 crore yesterday, 3 August 2016, as per provisional data.
Among corporate news, Siemens announced that it has received a crucial order worth Rs 217 crore for Power Grid Company of Bangladesh (PGCB) project from Siemens AG, Germany. The project is a part of India Bangladesh agreement for power exchange as per South Asia Sub Regional Economic Co-operation (SASEC) by Asian Development Bank (ADB). The announcement was made after market hours yesterday, 3 August 2016.
Punj Lloyd announced that its subsidiary Pt Engineering has sold its entire shareholding in its wholly owned subsidiary registered in United Kingdom viz. Simon Carves Engineering to Engineers and Constructors International, Inc, for a cash consideration of $2 million. Simon Carves Engineering contributed 1.73% of the total income of Punj Lloyd during the last financial year. The announcement was made after market hours yesterday, 3 August 2016. Engineers and Constructors International, Inc is a design and engineering company belonging to the Mitsui Group based out of Baton Rouge, Louisiana, US.
Losses in auto, capital goods, FMCG sector stocks and index heavyweights Reliance Industries, HDFC and ITC led losses for key benchmark indices yesterday, 3 August 2016. The Sensex lost 284.20 points or 1.02% to settle at 27,697.51, its lowest closing level since 11 July 2016.
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