Key benchmark indices held firm in early afternoon trade as gains in Asian stocks boosted sentiment. At 12:20 IST, the barometer index, the S&P BSE Sensex was up 294.24 points or 1.05% at 28,008.61. The Nifty 50 index was currently up 94.45 points or 1.1% at 8,645.55. The Sensex was currently hovering above the psychological 28,000 mark after crossing that mark in mod-morning trade. Global credit rating agency, Moody's Investors Service's statement that Rajya Sabha's approval of the Goods and Service Tax (GST) constitutional amendment bill is a credit positive for India's sovereign and non-financial corporates also lifted sentiment.
The Sensex rose 320.56 points or 1.15% at the day's high of 28034.93 in mid-morning trade, its highest level since 2 August 2016. The barometer index rose 81.37 points or 0.29% at the day's low of 27,795.74 in early trade. The Nifty rose 101.05 points or 1.18% at the day's high of 8,652.15 in mid-morning trade, its highest level since 2 August 2016. The index rose 39.05 points or 0.45% at the day's low of 8,590.15 in early trade.
In overseas stock markets, Asian stocks rose driven by the Bank of England's aggressive stimulus measures, but with traders keeping a wary eye on US jobs data due later in the global trading day. The Bank of England yesterday, 4 August 2016 cut its benchmark interest rate by 25 basis points to 0.25% from 0.5%, the lowest in its 322-year history. It expects to cut the rate further in the months ahead. The central bank also revived a UK government bond-buying program, also known as quantitative easing, that has been on pause since 2012, and said it would begin buying corporate bonds. US stocks ended little changed yesterday, 4 August 2016 as investors kept to the sidelines ahead of US payrolls report for July. The monthly hiring data due later in the global day will help investors gauge the health of the economy and possibly offer insight as to when the Federal Reserve will raise interest rates again.
Closer home, the broad market depicted strength. There were more than two gainers against every loser on BSE. 1,700 shares rose and 732 shares fell. A total of 143 shares were unchanged. The BSE Mid-Cap index was currently up 1.06%. The BSE Small-Cap index was currently up 1.28%. Both these indices outperformed the Sensex.
Bharti Airtel rose 0.21% after the company announced two new postpaid plans under its 'myPlan Infinity' series, offering unlimited voice calls along with bundled 3G/4G data at just Rs 1199. Airtel postpaid 'myPlan Infinity' combines unlimited voice calling with variable data benefits, giving customers the flexibility to choose from a wide range of plans. Under the new 'Infinity' plans, for Rs 1199, customers will enjoy unlimited voice calling - local, STD, and on national roaming - along with 100 SMS per day, 1GB 3G/4G data and free subscription to Wynk Music and Wynk Movies. The Rs 1599 plan will offer unlimited voice calling - local, STD, and on national roaming - along with 100 SMS per day, 5GB 3G/4G data and free subscription to Wynk Music and Wynk Movies.. The announcement was made during market hours today, 5 August 2016. These plans are in addition to the existing 'myPlan Infinity' Airtel offers for its postpaid mobile customers which were launched last year enabling customers to enjoy unbeatable voice and data offers on Airtel 3G/4G. The new plans will also offer a pay-as-go-rate of only 50p/MB post exhaustion of the data limit.
Realty stocks rose. DLF (up 0.52%), D B Realty (up 0.38%), Sobha (up 1.68%), Unitech (up 2.16%), NBCC (up 1.8%), Godrej Properties (up 3.49%), Housing Development & Infrastructure (HDIL) (up 1.73%), and Oberoi Realty (up 1.35%) edged higher. Indiabulls Real Estate fell 1.99%.
Capital goods stocks also gained. Bharat Heavy Electricals (Bhel) (up 2.76%), BEML (up 1.86%), Havells India (up 0.74%), ABB India (up 1.14%), Bharat Electronics (up 1.31%), L&T (up 1.99%), and Thermax (up 1.05%) gained.
Siemens rose 1.06% to Rs 1,268 after the company announcement at the time of unveiling Q3 June 2016 results that its order inflow jumped 44.3% at Rs 3224.25 crore in Q3 June 2016 over Q3 June 2015. Shares of Siemens had edged lower ahead of Q3 results. The stock fell 6.06% in three trading sessions to settle at Rs 1,254.70 yesterday, 4 August 2016, from its close of Rs 1,335.65 on 1 August 2016.
Siemens's net profit fell 22.72% to Rs 130.03 crore on 8.81% increase in total income to Rs 2648.28 crore in Q3 June 2016 over Q3 June 2015. The company said in its Q3 June 2016 results press release that the decline in bottom line on year on year basis in Q3 June 2016 was mainly due to one-time costs and adverse exchange rates. Sunil Mathur, managing director and chief executive officer Siemens said that the company has delivered a satisfactory financial performance in a difficult economic environment. New orders continued to flow from railways, transmission and distribution projects though private sector capex is still muted, he added.
Monsanto India fell 1.35% after net profit fell 9.9% to Rs 56.60 crore on 9.1% decline in net sales to Rs 236.08 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 4 August 2016.
3M India rose 1.66% after net profit jumped 60.2% to Rs 59.72 crore on 13.8% rise in net sales to Rs 581.57 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 4 August 2016.
Meanwhile, the government has reportedly set 4% as target for inflation for the next five years till 2021.
Meanwhile, Revenue Secretary, Ministry of Finance in its presentation on next steps required for the implementation of Goods and Service Tax (GST) constitutional amendment bill after the Rajya Sabha passed the GST bill said yesterday, 4 August 2016 that the target date of GST roll out is 1 April 2017. As per reports, the GST amendment bill will be tabled in the Lok Sabha on 8 August 2016. The bill requires ratification by 50% states after its passage by the Parliament, followed by the Presidential assent of Constitution Amendment and notification in the official Gazette. Cabinet will approve formation of GST Council which will make recommendation of model GST laws. Cabinet will approve the CGST and IGST laws by Centre and SGST laws by all states which have to be passed by the Centre and by all states respectively, which should happen by winter session this year. GST rules will be notified later.
Meanwhile, global credit rating agency, Moody's Investors Service said today, 5 August 2016 that the upper house's approval of the GST bill paves the way for its implementation, a credit positive for the country's sovereign and non-financial corporates. The GST will have a positive impact on growth and tax revenues over the medium term, supporting the sovereign's credit profile. Specifically, it will remove a key hurdle to the smooth movement of goods and services, and by reducing the tax administration costs of the government and corporate sector, it will improve compliance and raise tax receipts. However, its implications over the short term will be limited, given that effective implementation will take some time, and the recommended GST rates are intended to be revenue neutral, it added.
The GST will have a significant impact on relative prices since the effective total tax rates on some goods will fall as taxes are removed and replaced by a lower-rate GST, while other goods and some services will be subject to a higher effective tax rate, says the report. However, the GST will have a negligible impact on overall inflation, in line with the revenue-neutral objective. Over time, Moody believes the impact of the GST will be positive for most corporate sectors across the value chain, spanning procurement of raw materials, manufacturing of goods, sales and distribution of finished goods and services, logistics, and warehousing of goods from manufacturing locations to end-customers.
The India Meteorological Department in its weekly update on rainfall said yesterday, 4 August 2016 that during the week from 28 July to 3 August 2016, rainfall was above long period average (LPA) by 6% over the country as a whole. For the country as a whole, cumulative rainfall during this year's monsoon for July 2016 was 7% above LPA. For the country as a whole, cumulative rainfall during this year's monsoon has so far upto 3 August been 1% above LPA.
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