Key benchmark indices regained strength in mid-morning trade. At 11:25 IST, the barometer index, the S&P BSE Sensex was up 278.67 points or 0.9% at 31,190.22. The Nifty 50 index was up 82.20 points or 0.86% at 9,603.10. The sentiment was boosted after the biggest tax reform, the Goods and Services Tax came into force from 1 July 2017. The gains were also supported by a sharp jump in index heavyweight ITC.
Trading for July started on a buoyant note, with indices witnessing a gap-up opening. Stocks regained strength in mid-morning trade after trimming initial spurt in morning trade. The Sensex and the Nifty, had hit almost one-week high at the onset of the session.
The S&P BSE Mid-Cap index rose 0.79%, underperforming the Sensex. The S&P BSE Small-Cap index gained 0.95%, outperforming the Sensex.
The broad market depicted strength. There were almost three gainers against every loser on BSE. 1,657 shares rose and 574 shares fell. A total of 121 shares were unchanged.
Tata Power Company declined 0.06%. The company announced that the company through Adjaristsqali Georgia LLC (AGL), its joint venture with Norway's Clean Energy Invest AS Norway (Clean Energy) and IFC InfraVentures (IFC), a member of the World Bank Group announced completion of construction of its 187 megawatts (MW) Shuakhevi hydro power project in Georgia. The project investment cost was over $420 million. The announcement was made during market hours today, 3 July 2017.
The power generated by the project will be exclusively sold within Georgia throughout the winter which is a period of energy deficit.
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Telecom stocks rose on renewed buying. Bharti Airtel (up 0.12%), Tata Teleservices (Maharashtra) (up 1.61%) Reliance Communications (Rcom) (up 0.93%), MTNL (up 0.99%) and Idea Cellular (up 0.41%) gained.
Shares of Bharti Infratel rose 2.53%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.
Cement stocks also gained in a firm market. ACC (up 0.99%), Shree Cement (up 2.68%), Ambuja Cements (up 0.87%), and UltraTech Cement (up 0.78%) gained.
Grasim Industries advanced 0.31%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Bajaj Auto dropped 1.02% after total sales fell 23% to 2.44 lakh units in June 2017 over June 2016. Domestic sales slumped 34% to 1.26 lakh units in June 2017 over June 2016. Exports dropped 4% to 1.17 lakh units in June 2017 over June 2016. The announcement was made before market hours today, 3 July 2017.
Separately, the company announced during market hours today, 3 July 2017 that KTM and the company have elevated the cooperation to the next level and decided to take Husqvarna Motorcycles globally with roll out slated in 2018. There will be an increase in production of KTM and Husqvarna branded motorcycles produced in India from expected 1 lakh units in 2017 to over 2 lakh units in the next years.
Husqvarna Motorcycles founded in 1903 for which KTM has secured a long term license agreement in the year 2013.
Infosys rose 0.29% after the company announced that it has signed on 29 June 2017, an agreement for divestment of its entire investment in Cloudyn for a total consideration of approximately $4.4 million. The divestment is due to Microsoft signing a definitive agreement for the acquisition of Cloudyn. The announcement was made after market hours on Friday, 30 June 2017. Infosys on 3 August 2016 had announced minority investment in Cloudyn Software.
On macroeconomic data front, Markit Economics said today, 3 July 2017 that Purchasing Managers' Index (PMI) data highlighted a slowdown in growth across India's manufacturing sector during June. A softer rise in factory new orders resulted in weaker growth of production, with rates of expansion at four-month lows in both cases. Down from 51.6 in May to a four-month low of 50.9 in June, the Nikkei India Manufacturing PMI pointed to a slight and weaker improvement in the health of the sector.
Meanwhile, the output of eight core infrastructure industries, comprising 40.27% of the weight of items included in the Index of Industrial Production (IIP), improved 3.6% in May 2017. The cumulative output of eight core infrastructure industries moved up 3.2% in April-May 2017-18. The data was announced after market hours on Friday, 30 June 2017.
The Goods and Services Tax came into force from 1 July 2017, amid a historic midnight session in the Central Hall of Parliament on 30 June 2017. President Pranab Mukherjee, Prime Minister Narendra Modi, and Finance Minister Arun Jaitley addressed the gathering, before the President and the Prime Minister pressed a button to mark the launch of GST. The biggest tax reform since independence - GST - will pave the way for realization of the goal of One Nation - One Tax - One Market.
Overseas, Asian stocks were mixed as the second half of the year kicked off, tracking mixed signals from US markets. US stocks closed mixed on Friday, 30 June 2017.
On macro economic data front, a private gauge of China's factory activity rebounded in June to show an expansion, indicating an improvement in the manufacturing sector that tallied with official data released last week. The Caixin China manufacturing purchasing managers' index rose to 50.4 in June from 49.6 in May, showing a rise in activity, Caixin Media Co. and research firm Markit said. The 50 level separates an expansion in manufacturing activity from a contraction.
Japanese manufacturing activity expanded at a slightly slower pace in June. The final June Markit/Nikkei Japan Manufacturing PMI was 52.4, higher than a preliminary reading of 52.0 but still below a final 53.1 in May.
Japan's business confidence among the nation's large manufacturers strengthened to its highest level in more than three years in the second quarter, according to a central bank survey. The main index measuring large manufacturers' confidence rose to plus 17 in the April-June period from plus 12 previously, according to the Bank of Japan's quarterly tankan survey.
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