Key benchmark indices hovered in a narrow range in negative zone in afternoon trade. At 13:15 IST, the barometer index, the S&P BSE Sensex was down 280.57 points or 1% at 27,701.14. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty was currently down 69.95 points or 0.81% at 8,552.95. The Sensex was currently trading below the psychologically important 28,000 level after briefly crossing that level at the onset of trading session. Weakness in global stocks weighed on sentiment on the domestic bourses.
The broad market depicted weakness. There were more than two losers against every gainer on BSE. 1,744 shares fell and 776 shares rose. A total of 127 shares were unchanged. The BSE Mid-Cap index was currently down 1.13%. The decline in this index was higher than the Sensex's decline in percentage terms. The BSE Small-Cap index was currently down 0.92%. The decline in this index was lower than the Sensex's decline in percentage terms.
The Sensex fell 290.81 points or 1.03% at the day's low of 27,690.90 in 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, European and Asian markets edged lower 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.
Stocks of public sector banks witnessed a mixed trend. Union Bank of India (up 1.55%), Bank of India (up 0.55%), Bank of Baroda (up 0.43%) and Punjab National Bank (up 0.01%) edged higher. IDBI Bank (down 0.07%), State Bank of India (down 0.01%), Indian Bank (down 1.91%) and United Bank of India (down 0.9%) edged lower.
Stocks of private sector banks edged lower. Axis Bank (down 0.99%), ICICI Bank (down 0.61%) and IndusInd Bank (down 0.93%) declined. Yes Bank (up 0.39%) and Kotak Mahindra Bank (up 0.24%) rose.
Index heavyweight HDFC Bank was down 0.02%.
Steel stocks were mixed. Jindal Steel & Power (down 2.03%) and Tata Steel (down 1.35%) edged lower. Steel Authority of India (up 0.01%) and JSW Steel (up 0.76%) edged higher.
The Director general of safeguards, Customs and Central Excise in a notification issued yesterday, 2 August 2016 recommended imposing safeguard duty on import of some steel products for a period of two years and six months with effect from 4 August 2016. For the first year, a safeguard duty of 10% ad valorem (minus anti-dumping duty, if any) is proposed on select steel products imported at a price below $504 per metric tonne (MT). A safeguard duty of 8% ad valorem (minus anti-dumping duty, if any) is proposed on the products imported at a price below $504 per MT. For the first six months of the third year, a safeguard duty of 6% ad valorem (minus anti-dumping duty, if any) is proposed on the products imported at a price below $504 per MT.
As the imports from developing nations, as listed in a notification dated 5 February 2016, except China PR, Indonesia and Ukraine do not exceed 3% individually and 9% collectively, the import of product under consideration originating from developing nations except China PR, Ukraine and Indonesia will not attract safeguard duty, a statement in the notification issued by the Director general of safeguards, Customs and Central Excise said.
The government had imposed a minimum import price (MIP) on select steel products in February this year for a period of six months, to counter the global slump in steel prices, which threatened domestic industry.
Metal stocks edged lower. Hindalco Industries (down 0.89%), Hindustan Copper (down 0.98%), National Aluminium Company (down 0.84%), Hindustan Zinc (down 0.07%) and NMDC (down 0.3%) declined. Vedanta (up 0.74%) edged higher.
Meanwhile, copper prices edged lower in global commodities markets. High Grade Copper for September 2016 delivery was currently down 0.38% at $2.2005 per pound on the COMEX.
Ambuja Cements was off 0.44%. Ambuja Cements has secured coal linkage of 20,400 tonnes at Rs 1,810 per tonne from Western Coalfields (Niljai colliery), 16,500 tonnes at Rs 1,095 per tonne from South Eastern Coalfields (Kusmunda siding) and 82,300 tonnes at Rs 1,070 per tonne from South Eastern Coalfields (Gevra siding). The announcement was made after market hours yesterday, 2 August 2016.
Ambuja Cements had late last month announced securing a linkage of 96,000 tonnes of coal at Rs 1,050 per tonne from Junadih siding of South Eastern Coalfields.
The outcome of a monthly survey showed 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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