A bout of volatility was witnessed in early afternoon trade as key benchmark indices trimmed losses after extending intraday losses and hitting fresh intraday low. At 12:20 IST, the barometer index, the S&P BSE Sensex was down 212.31 points or 0.79% at 27,760.70. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty was currently down 56.80 points or 0.66% at 8,566.10. The Sensex hit lowest level in almost two-weeks. The Nifty hit lowest level in more than one-week. Weakness in Asian stocks weighed on sentiment.
The Sensex fell 277.29 points or 0.99% at the day's low of 27,704.42 in early afternoon trade, its lowest level since 22 July 2016. The barometer index rose 33.72 points or 0.12% at the day's high of 28,015.43 at the onset of trading session. The Nifty declined 77.75 points or 0.9% at the day's low of 8,545.15 in early afternoon trade, its lowest level since 25 July 2016. The index rose 12.55 points or 0.14% at the day's high of 8,635.45 at the onset of trading session.
In overseas stock markets, Asian markets slipped after US stocks took their biggest loss in almost a month yesterday, 2 August 2016, underscoring simmering worries about global economic growth. Meanwhile, growth in China's services sector cooled in July, a private survey showed today, 3 August 2016. The Caixin/Markit services purchasing managers' index (PMI) fell to 51.7 in July on a seasonally adjusted basis, from an 11-month peak of 52.7 in June. US stocks fell yesterday, 2 August 2016 on the back of disappointing auto sales and a steep drop for retailers on forecasts of poor summer sales, after a similar drop on Asian and European markets.
Closer home, the broad market depicted weakness. There were more than two losers against every gainer on BSE. 1,714 shares fell and 717 shares rose. A total of 113 shares were unchanged. The BSE Mid-Cap index was currently down 1.27%. The BSE Small-Cap index was currently down 0.99%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
Bharat Heavy Electricals (Bhel) dropped 2.2%. The company announced that it commissioned the second 500 megawatts (MW) thermal unit at Marwa Thermal Power Station in Chattisgarh. Marwa TPS has been set by Chattisgarh State Power Generation Company (CSPGCL). The first unit of Marwa TPS was also commissioned earlier by Bhel. The announcement was made during market hours today, 3 August 2016.
Cement stocks were mixed. ACC (up 0.43%) and Ambuja Cements (up 0.28%) gained. Shree Cement (down 0.89%) and UltraTech Cement (down 0.02%) declined.
Grasim Industries declined 0.47%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Auto stocks declined. Mahindra & Mahindra (M&M) (down 0.05%), Ashok Leyland (down 2.61%), Eicher Motors (down 0.54%), Bajaj Auto (down 0.91%) and TVS Motor Company (down 1.12%) declined. Hero MotoCorp rose 0.25%.
Maruti Suzuki India declined 2.12%. The company announced that it inaugurated MyNEXA Cocierge airport display and lounge for its customers at T3, Indira Gandhi International Airport, New Delhi. NEXA, the new automobile sales channel of the company, recently completed one year of operations in India. The announcement was made during market hours today, 3 August 2016.
The BSE Auto index had outperformed the market over the past one month till 2 August 2016, rising 6.6% compared with 3.08% rise in the Sensex. The index had also outperformed the market in past one quarter, rising 13.99% as against Sensex's 10% rise.
HEG lost 10.64% after the company reported net loss of Rs 28.92 crore in Q1 June 2016, higher than net loss of Rs 7.05 crore in Q1 June 2015. The result was announced after market hours yesterday, 2 August 2016. The company's net sales declined 32.9% to Rs 161.53 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 2 August 2016. Meanwhile, HEG's board of directors approved the issue of non-convertible debentures for an aggregate amount upto Rs 200 crore on private placement basis subject to the approval of shareholders.
On the macro front, Markit Economics said today, 3 August 2016 that Indian service providers enjoyed a welcome upturn in demand during July, with a faster increase in new business underpinning stronger growth of output and boosting confidence. Part of the upswing in incoming new work was supported by price discounts. The seasonally adjusted Nikkei India Services Business Activity Index rose to 51.9 in July, posting above the no-change mark of 50 for the thirteenth month running, highlighting ongoing growth of output in the sector. Up from 50.3 in June, the headline index was at a three-month high and indicative of a modest rate of expansion.
Meanwhile, investors are awaiting the progress on the Goods and Services Tax (GST) constitutional amendment bill in parliament. According to reports, the long-pending GST Bill is listed for consideration and passage in Rajya Sabha today, 3 August 2016 amidst strong indications that the most far-reaching taxation reform would be supported by Congress and all other major political parties. The government is keen to get the GST Bill approved during the Monsoon Session of Parliament ending on 12 August 2016.
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 GST seeks to create a seamless national market in the country by replacing plethora of state taxes and central taxes by one tax.
Meanwhile, the India Meteorological Department (IMD) said that this year the Southwest monsoon rainfall was 11% below the Long Period Average (LPA) during June, however, July rainfall has been 7% above the LPA. The rainfall data was released yesterday, 2 August 2016. Rainfall over the country as a whole during second half of southwest monsoon season from August to September is most likely to be above normal that is more than 106% of LPA with a probability of 55%. Quantitatively, the rainfall for the country as a whole during second half of the season is likely to be 107% of LPA with a model error of 8%. The rainfall during August is likely to be 104 9% of LPA as was forecasted in June. The rainfall in monsoon season from June to September over the country as a whole is likely to be 106% 4% of LPA as was forecasted in June.
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