Key benchmark indices continued to trade with small losses in mid-afternoon trade as caution prevailed ahead of the Reserve Bank of India's monetary policy decision later in the day. At 14:20 IST, the barometer index, the S&P BSE Sensex, declined 73.05 points or 0.22% at 32,502.12. The Nifty 50 index lost 19.20 points or 0.19% at 10,095.45. Weakness in European stocks weighed on sentiment.
Indices opened higher and hit fresh record highs in early trade tracking firm Asian stocks. Market hovered in the positive terrain near the flat line in morning trade. Indices traded with small losses after slipping into the red in mid-morning trade. Later, indices traded with small losses amid drop in European stocks.
The S&P BSE Mid-Cap index fell 0.27%. The decline in the index was higher than the Sensex's fall in percentage terms. The S&P BSE Small-Cap index gained 0.01%, outperforming the Sensex.
The breadth, indicating the overall health of the market, was negative. On the BSE, 1,423 shares fell and 1,118 shares rose. A total of 165 shares were unchanged.
Pharma major Lupin gained 2.16%. The company announced that consolidated net profit fell 59.39% to Rs 358.10 crore on 12.32% decline in net sales to Rs 3806.80 crore in Q1 June 2017 over Q1 June 2016. The announcement was made during market hours today, 2 August 2017.
Commenting on the results, Nilesh Gupta, Managing Director, Lupin said that results have been below company's own expectations on account of higher than anticipated price erosion in select products like Glumetza, disruption on count of GST implementation in India and appreciation in the rupee. The focus remains on building complex generic pipeline, operational excellence, regulatory compliance and building a differentiated specialty business, he added.
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Separately, the company announced that it has received final approval for its Fluocinonide Topical Ointment USP, 0.05% from the United States Food and Drug Administration (FDA) to market a generic version of County Line Pharmaceuticals, LLC's Lidex Ointment, 0.05%.
Lupin's Fluocinonide Topical Ointment USP, 0.05% is AB rated generic equivalent of County Line Pharmaceuticals, LLC's Lidex Ointment, 0.05%. It is indicated for the relief of the inflammatory and pruritic manifestations of corticosteroid-responsive dermatoses. Lidex Ointment had annual US sales of $40.3 million as per IMS MAT March 2017. The announcement was made after market hours yesterday, 1 August 2017.
Capital goods stocks dropped. BEML (down 0.55%), Bharat Heavy Electricals (Bhel) (down 1.9%), L&T (down 0.71%), Thermax (down 1.24%), CG Power & Industries (down 0.42%) and Siemens (down 0.38%) declined. Havells India rose 0.7%.
Tyre stocks rose across the board as oil prices dropped. Apollo Tyres (up 3.61%), JK Tyre & Industries (up 2.63%), MRF (up 1.97%) Goodyear India (up 1.57%), and CEAT (up 2.57%) gained. Nearly 30% of raw material for tyres is derived from crude products. It takes approximately 7 gallons of oil to produce a single tyre.
In the global commodities markets, Brent for October 2017 settlement was down 30 cents at $51.48 a barrel. The contract had fallen 94 cents to settle at $51.78 a barrel during the previous trading session.
On the macro front, the Reserve Bank of India (RBI)'s monetary policy meeting is scheduled at 14:30 IST today, 2 August 2017. RBI is likely to cut policy rates by 25 basis points. In June 2017, RBI kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25%. Consequently, the reverse repo rate under the LAF remained at 6%, and the marginal standing facility (MSF) rate and the Bank Rate at 6.5%.
Meanwhile, Arvind Panagariya, the first vice-chairman of Niti Aayog, reportedly announced yesterday, 1 August 2017, that he will step down from the post and return to academia in the United States. The decision is understood to have followed the economist having informed the government a couple of months ago that he would like to return to Columbia University.
The Government of India has garnered over Rs 1.8 lakh crore in direct tax till 15 July 2017 in the current FY 2018, representing a growth of 21.4% over the same period last year. The current growth rate is higher than the target rate of 15.32% required to achieve the budget estimate. Through direct taxes, the government aims to collect Rs 9.8 lakh crore in FY 2018.
Overseas, European stocks declined weighed down by a fall among mining stocks and banks. Most Asian stocks rose helped by strong results from Apple. US stocks closed higher yesterday, 1 August 2017 and the Dow Jones Industrials Average racked up a fifth straight record high powered by Goldman Sachs, JPMorgan Chase and other banks.
Economic data showed US consumer spending barely rose in June as income failed to increase for the first time in seven months. Also, American manufacturers tapped on the brakes lightly in July but were still expanding near the fastest pace in three years. The Institute for Supply Management said its manufacturing index fell slightly to 56.3% last month after reaching a three-year high of 57.8% in June.
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