Nifty holds 8,500 amid choppy trades; broader markets outshine

Key benchmark indices extended gains in early afternoon trade after media reports suggested that the Goods and Services Tax (GST) constitutional amendment bill has been listed for discussion in the Rajya Sabha next week. At 12:16 PM, the barometer index, the S&P BSE Sensex, was up 75.73 points or 0.27% at 27,786.25. The Nifty 50 index was currently up 24.15 points or 0.28% at 8,534.25.

The Sensex rose 84.68 points, or 0.31% at the day's high of 27,795.20 in early afternoon trade. The index fell 64.31 points, or 0.23% at the day's low of 27,646.21 in mid-morning trade, its lowest level since 19 July 2016. The Nifty rose 28.80 points, or 0.34% at the day's high of 8,538.90 in early afternoon trade. The index fell 20.30 points, or 0.24% at the day's low of 8,489.80 in early trade, its lowest level since 19 July 2016.
 
The market breadth indicating the overall health of the market was strong. On BSE, 1,453 shares rose and 888 shares fell. A total of 194 shares were unchanged. The BSE Mid-Cap index was currently up 0.83%. The BSE Small-Cap index was currently up 0.8%. Both these indices outperformed the Sensex.

As per latest media reports, the Goods and Services Tax (GST) constitutional amendment bill has been listed for discussion in the Rajya Sabha next week. 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 month-long monsoon session of the parliament will conclude on 12 August 2016.

In overseas stocks markets, Japanese stocks led losses for Asian equities after comments by Bank of Japan (BOJ) Governor Haruhiko Kuroda dashed hopes for so-called helicopter money or ultra-aggressive easing measures from the Japanese central bank. The Nikkei 225 Average settled 1.09% lower. In an interview to a British radio station taped in mid-June and broadcast yesterday, 21 July 2016, Kuroda ruled out the idea of using helicopter money -- or directly underwriting the budget deficit -- to combat deflation.

The BOJ is scheduled to review monetary policy at a two-day meeting on 28-29 July 2016. US stocks edged lower yesterday, 21 July 2016, with the Dow Industrial Average snapping a nine-day string of gains, as a hot equity market cooled ahead of key central-bank meetings across the globe.

Meanwhile, the European Central Bank (ECB) held rates unchanged after a monetary policy review yesterday, 21 July 2016, and emphasized that it intends to keep rates at current or lower levels for an extended period and that its program of monthly bond buys would run until at least March 2017, and possibly beyond.

Most auto stocks edged higher. Ashok Leyland (up 1.24%), Tata Motors (up 0.99%), Mahindra & Mahindra (up 0.64%), Maruti Suzuki (India) (up 0.57%), Eicher Motors (up 0.33%), TVS Motor Company (up 0.28%), Escorts (up 0.22%) and Hero MotoCorp (up 0.12%), edged higher. Bajaj Auto was down 0.85%).

Telecom stocks also edged higher. Reliance Communications (up 1.99%), Idea Cellular (up 1.85%), Bharti Airtel (up 0.64%), MTNL (up 0.23%) and Tata Teleservices (Maharashtra) (up 0.15%), edged higher.

Biocon jumped 6.34% after consolidated net profit rose 34.46% to Rs 166.60 crore on 22.72% rise in total income to Rs 1023.30 crore in Q1 June 2016 over Q1 June 2015. The result was announced after trading hours yesterday, 21 July 2016. Biocon said that revenue rose led by all-round growth of its business verticals viz. small molecules, biologics, branded formulations and Syngene, which represents research services business.

The research services business through Syngene reported a robust revenue growth of 18% at Rs 263 crore in Q1 June 2016 over Q1 June 2015, driven by a strong performance across its three verticals. The positive growth and outlook positions Syngene for a strong performance in the year ending 31 March 2017 (FY 2017).

Separately, Biocon and Mylan N.V. yesterday, 21 July 2016, announced that the European Medicines Agency (EMA) has accepted for review, Mylan's Marketing Authorization Application (MAA) for the proposed biosimilar Pegfilgrastim, which is used to reduce the duration of neutropenia and the incidence of febrile neutropenia in adult patients treated with cytotoxic chemotherapy for malignancy (with the exception of chronic myeloid leukaemia and myelodysplastic syndromes).

Mylan, a global pharmaceutical company and Biocon, who have co-developed the proposed biosimilar, received EMA's acceptance of the submission for review. In addition to analytical, functional and pre-clinical data, the application includes clinical data from pivotal Pharmacokinetic/Pharmacodynamic (PK/PD) and confirmatory efficacy, safety and immunogenicity studies completed earlier in 2016. The results from the studies are expected to be presented at the prestigious European Society of Medical Oncology (ESMO) Annual Congress to be held in Copenhagen in October 2016. Pegfilgrastim is prescribed for cancer patients to help them with some of the side-effects of their treatment.

Biocon and Mylan are exclusive partners on a broad portfolio of biosimilars and generic insulin analogs. The proposed biosimilar Pegfilgrastim is one of the six biologic products co-developed by Mylan and Biocon for the global marketplace. Mylan has exclusive commercialization rights for the proposed biosimilar Pegfilgrastim in the US, Canada, Japan, Australia, New Zealand and in the European Union and European Free Trade Association countries. Biocon has co-exclusive commercialization rights with Mylan for the product in the rest of the world.

Raymond lost 4.71% after the company reported consolidated net loss of Rs 16.61 crore in Q1 June 2016, higher than net loss of Rs 14.47 crore in Q1 June 2015. Net sales rose 4.8% to Rs 1057.36 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 21 July 2016. Raymond said that current demand scenario is weak.

The company expects pick up in demand in the coming months in light of good monsoon, seventh pay commission payouts to central government employees and festive season. The company continues to focus on fundamentals through product innovations, expansion and modernisation of retail network, improving customer engagement by further strengthening loyalty program and innovative, cluster-breaking advertising & digital initiatives.

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