A divergent trend was witnessed between the two key benchmark indices in mid-afternoon trade, with the barometer index, the S&P BSE Sensex, trading with small gains and the Nifty 50 index trading with minuscule losses. At 14:15 IST, the Sensex, was up 19.93 points or 0.07% at 28,115.27. The Nifty was down 1.75 points or 0.02% at 8,633.90. The market breadth indicating the overall health of the market was negative. On BSE, 1,321 shares fell and 1,242 shares rose. A total of 177 shares were unchanged. The BSE Mid-Cap index was currently up 0.88%. The BSE Small-Cap index was currently up 0.29%. Both these indices outperformed the Sensex.
In overseas stock markets, main European markets witnessed a mixed trend. Japanese stocks edged lower as expectations receded with regard to the government's soon-to-be announced fiscal stimulus package. The Nikkei 225 Average ended 1.43% lower. According to reports, the Japanese government will inject 6 trillion yen ($57 billion) in direct fiscal outlays into the economy over the next few years, double the amount initially planned. However, the spending will come over several years, which means the initial impact will be less than hoped. Meanwhile, investors are hoping for further easing of monetary policy from the Bank of Japan (BOJ) after the conclusion of a two-day monetary policy meeting on 28-29 July 2016. Strength in the yen against the dollar post last month's Brexit vote and data showing a slowdown in the Japanese economy have triggered expectations of further easing of monetary policy from the BOJ. A stronger yen hurts the competitiveness of Japanese exporters.
US stocks edged lower yesterday, 25 July 2016, as investors turned cautious ahead of a busy week of earnings and central bank meetings. The Federal Open Market Committee (FOMC) is widely expected to keep the benchmark fed funds rates unchanged after the conclusion of two-day monetary policy meeting on 26-27 July 2016. Market participant will scrutinize the Fed statement for clues on policy direction. The Fed has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015.
FMCG stocks were mixed. GlaxoSmithkline Consumer Healthcare (down 3.65%), Godrej Consumer Products (down 3.33%), Tata Global Beverages (down 0.9%), Britannia Industries (down 0.46%), Dabur India (down 0.59%), Emami (down 0.11%) and Jyothy Laboratories (down 0.14%) edged lower. Procter & Gamble Hygiene and Health Care (up 0.03%), Hindustan Unilever (up 0.11%), Marico (up 1.43%), Colgate-Palmolive (India) (up 0.42%), Nestle India (up 0.39%) and Bajaj Corp (up 0.07%) edged higher.
Power generation and distribution stocks edged higher. Reliance Power (up 4.64%), Torrent Power (up 2.7%), Adani Power (up 1.76%), CESC (up 0.58%), NTPC (up 0.83%), JSW Energy (up 0.62%), Reliance Infrastructure (up 0.25%), NHPC (up 0.4%), Power Grid Corporation of India (up 0.68%) and Tata Power Company (up 0.01%) rose. Jaiprakash Power Ventures (down 2.75%) and GMR Infrastructure (down 0.28%) edged lower.
Hindustan Construction Company (HCC) rose 1.48% at Rs 24 after the company said it has secured a contract worth Rs 1749.59 crore from IRCON International to construct two tunnels and a bridge on Katra-Banihal section of Udhampur-Srinagar-Baramulla railway line project. The project will be completed in 30 months. The contract involves construction of two main tunnels totaling 12.8 kilometres along with parallel safety tunnels, a 200 metres bridge adjoining these two tunnels and a station yard at Basindadhar. The announcement was made during market hours today, 26 July 2016.
Meanwhile, the government intends to get the Goods and Services Tax (GST) constitutional amendment bill passed in the Rajya Sabha during the ongoing monsoon session. 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. The month-long monsoon session of the parliament will conclude on 12 August 2016.
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