Expectations that the constitutional amendment bill on goods and services tax (GST) will be passed during the winter session of parliament triggered modest gains for key benchmark indices. The barometer index, the S&P BSE Sensex, rose 182.89 points or 0.71% to settle at 25,958.63. The Nifty 50 index rose 52.20 points or 0.67% to settle at 7,883.80. A bout of volatility was witnessed towards the fag end of the trading session as the Sensex fell below the psychological 26,000 mark soon after surpassing that level. Volatility at the fag end of the trading session materialized as the near month November 2015 contracts expired in the futures & options (F&O) segment. The Sensex and the Nifty, both, hit their highest closing level in more than two weeks. Index heavyweights ITC, Reliance Industries (RIL) and Infosys led the upmove for key benchmark indices which snapped a two-day losing streak.
As the month long winter session of the parliament began today, 26 November 2015, investors' focus is on whether the GST constitutional amendment bill will be passed in the Rajya Sabha. The constitutional amendment bill for the implementation of GST, which subsumes all indirect taxes to create a unified market across the country, has been cleared by the Lok Sabha and is awaiting legislative passage in the Rajya Sabha. A constitutional amendment bill requires a majority of two thirds in the house for its passage. The BJP-led NDA has a comfortable majority in Lok Sabha, but lags in numbers in the Rajya Sabha, the upper house, where members are elected by the strength of legislators in the states house. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.
The Sensex rose 182.89 points or 0.71% to settle at 25,958.63, its highest closing level since 9 November 2015. The index rose 240.30 points or 0.93% at the day's high of 26,016.04. The index fell 5.93 points, or 0.02% at the day's low of 25,769.81.
The Nifty rose 52.20 points or 0.67% to settle at 7,883.80, its highest closing level since 9 November 2015. The index rose 65.50 points or 0.83% at the day's high of 7,897.10. The index rose 0.40 points or 0.005% at the day's low of 7,832.
The BSE Mid-Cap index rose 0.26%. The BSE Small-Cap index rose 0.45%. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,623 shares rose and 1,049 shares fell. A total of 228 shares were unchanged.
Among the sectoral indices on BSE, the S&P BSE Energy index (up 1.27%), BSE FMCG index (up 0.74%), BSE Industrials index (up 0.9%), BSE Telecom index (up 2.66%), BSE Utilities index (up 1.7%), BSE Auto index (up 1.29%), BSE Consumer Durables index (up 1.03%), BSE Metal index (up 1.07%), BSE Oil & Gas index (up 0.9%), BSE Power index (up 0.99%) and BSE Realty index (up 1.8%) outperformed the Sensex. The S&P BSE Finance index (up 0.29%), BSE Healthcare index (down 0.53%), BSE IT index (up 0.13%), BSE Bankex index (up 0.34%), BSE Capital Goods index (down 0.23%) and BSE Teck index (up 0.65%) underperformed the Sensex.
The total turnover on BSE amounted to Rs 2763 crore, higher than turnover of Rs 2738.01 crore registered during the previous trading session.
In overseas stock markets, European stocks edged higher on growing bets that the European Central Bank (ECB) will roll out more stimulus at its monetary policy meeting next week. The ECB has signaled its readiness to expand its bond purchase program to combat weak inflation. The next monetary policy review from the ECB is scheduled on 3 December 2015. Earlier during the global day, Asian stocks ended on a mixed trend. US stocks ended little changed in a thinly traded preholiday session yesterday, 25 November 2015.
Index heavyweight Reliance Industries (RIL) rose 2.04% to Rs 987.70 after the company said it has repaid the third installment of redemption proceeds on the outstanding debentures. On 24 November 2015, RIL repaid the third installment of redemption proceeds on the outstanding debentures. After the payment of the third installment of redemption, the face value of the debentures has been reduced from Rs 6.66 lakh to Rs 5 lakh per debenture effective 24 November 2015, RIL said. It may be recalled that RIL had issued 8,000 secured redeemable non-convertible debentures of Rs 10 lakh each aggregating Rs 800 crore in November 2003. The debentures carry a coupon of 6.25%. As per the terms of issue of the debentures, the debentures shall be redeemed in six equal annual installments starting from the end of the tenth year from the date of allotment i.e. 24 November 2003.
Index heavyweight and India's largest cigarette maker by sales ITC rose 1.96% to Rs 342.60. The stock hit a high of Rs 344.80 and a low of Rs 334.75 in intraday trade.
Index heavyweight and IT major Infosys rose 1.17% to Rs 1,053.20. The stock hit a high of Rs 1,058.70 and a low of Rs 1,035 in intraday trade.
Index heavyweight and engineering and construction major L&T fell 0.62% to Rs 1,334. The stock hit a high of Rs 1,354.10 and a low of Rs 1,331.10 in intraday trade.
Auto stocks were mixed. Bajaj Auto (down 0.66%), Ashok Leyland (down 0.74%) and Eicher Motors (down 1.18%) fell. TVS Motor Company gained 2.67%.
Tata Motors advanced 5.51% to Rs 423.15 after the company's British luxury car unit Jaguar Land Rover (JLR) announced that it will spend 450 million to double the size of its engine manufacturing centre (EMC) in the UK. The EMC supplies engines to the three vehicle plants of JLR located in the UK. JLR said that the decision to expand the size of the EMC was driven by global demand for current and future car models of JLR. Tata Motors released the press release on JLR EMC expansion after trading hours on Tuesday, 24 November 2015.
Mahindra & Mahindra (M&M) rose 2.06% to Rs 1,345.10 after the company announced the launch of the automatic transmission variant in its XUV500 sports utility vehicle (SUV). The automatic transmission option will be available on three variants of XUV500. The automatic transmission option starts at a price of Rs 15.36 lakh (ex-showroom Navi Mumbai) for the W8 FWD variant and will be available across M&M dealerships 5 December 2015 onwards.
Hero MotoCorp rose 1.32% to Rs 2,680.80 in volatile trade after media reports suggested that US private equity firm Bain Capital has launched a deal to sell its entire holding of 29.8 lakh shares of Hero MotoCorp. The stock hit high of Rs 2,698 and low of Rs 2,610 in intraday trade. The stock witnessed a surge in volumes. On BSE, 6.91 lakh shares were traded in the counter as against average daily volume of 24,474 shares in the past one quarter. On NSE, 14 lakh shares were traded in the counter as against average daily volume of 3.37 lakh shares in the past one quarter.
Bain launched the deal to sell Hero MotoCorp shares in the indicative price band of between Rs 2,570 and Rs 2,600 per share, according to reports. Bain's holding in Hero MotoCorp is through its unit BC India Private Investors II.
Maruti Suzuki India slipped 0.63% to Rs 4,611.40. The company announced after market hours on Tuesday, 24 November 2015, that it will offer dual airbags and anti-lock braking system (ABS) as an option in all variants of Swift and DZire, including the base variant. In the fiscal year ended March 2015, Swift and DZire maintained an average sale of over 17,000 units each per month.
Dr Reddy's Laboratories (DRL) tumbled 8.21% to Rs 3,110.35 after the US Food and Drug Administration (USFDA) put up the warning letter issued to the company issued early this month on its web site. The USFDA has identified significant deviations from current good manufacturing practice (CGMP) at DRL's two pharmaceutical manufacturing facilities in Andhra Pradesh and a unit in Telangana. The warning letter states that several violations are recurrent or represent long-standing failures to adequately resolve significant manufacturing quality problems at these three units. The warning letter states that the USFDA may withhold approval of any new applications for drugs manufactured by the company unless and until the three units conform to CGMP. The USFDA may also refuse exports of products into the US manufactured at these three units until the company takes remedial measures.
DRL in a press release issued during market hours today, 26 November 2015 said that it is in the process of preparing a response to USFDA's warning letter. The USFDA has granted an extension until 7 December 2015 for the submission of the company's response to the warning letter, Dr Reddy's Laboratories said in a statement.
Sun Pharmaceutical Industries (Sun Pharma) advanced 3.96% to Rs 735.95. Sun Pharma after market hours on Tuesday, 24 November 2015, announced that some of the company's subsidiaries who were contemplating investment in a wind energy project in the US have now decided not to proceed with this investment.
Idea Cellular rose 5.15% and Videocon Industries jumped 4.14% after Idea Cellular signed a pact with Videocon Industries' subsidiary Videocon Telecommunications (VTL) for acquiring the right to use VTL's spectrum in the Uttar Pradesh (West) and Gujarat circles for Rs 3310 crore. This final consideration is subject to adjustment based on the due diligence exercise. The spectrum trading arrangement is for 1800 MHz spectrum, with the right to use the spectrum until December 2032.
Idea said it intends to use this acquired spectrum for launching 4G (LTE) mobile broadband services in the service areas of Gujarat and Uttar Pradesh (West). With this spectrum trading arrangement, Idea's 4G (LTE) spectrum footprint will expand to 12 service areas covering over 75% of Idea's current revenue and over 72% of existing 170 million quality subscribers on visitor location register (VLR).
Most metal shares edged higher. Jindal Steel & Power (up 4.81%), National Aluminium Company (up 4.81%), Hindustan Copper (up 3.77%), Hindalco Industries (up 1.76%), Tata Steel (up 1.58%), Steel Authority of India (up 0.57%), JSW Steel (up 0.45%) and Hindustan Zinc (up 0.21%), edged higher. NMDC (down 0.33%) and Bhushan Steel (down 1.29%), edged lower. Vedanta was unchanged at Rs 90.30.
Select stocks of state-run firms were in demand. Mangalore Refinery & Petrochemicals (up 7.19%), Hindustan Copper (up 3.77%), Engineers India (up 3.37%), GAIL (India) (up 3.33%), Oil India (up 2.20%), Bharat Electronics (up 1.89%), Power Grid Corporation of India (up 1.71%), NTPC (up 1.30%), Coal India (up 1.07%), ONGC (up 1.01%), MMTC (up 0.67%), Steel Authority of India (up 0.57%), Rural Electrification Corporation (up 0.33%), Container Corporation of India (up 0.12%) and Power Finance Corporation (up 0.05%), edged higher.
Bank stocks were mixed. Among PSU banks, Punjab and Sind Bank (up 2.59%), Bank of India (up 1.53%), IDBI Bank (up 1.28%), Bank of Baroda (up 1.19%), Punjab National Bank (up 1.12%), Indian Bank (up 1.08%), Union Bank of India (up 0.94%), Vijaya Bank (up 0.59%), State Bank of India (up 0.52%) and Bank of Maharashtra (up 0.16%), edged higher. Corporation Bank (down 0.24%), UCO Bank (down 0.32%), Dena Bank (down 0.36%), Allahabad Bank (down 0.41%), United Bank of India (down 0.46%), Canara Bank (down 0.57%), Syndicate Bank (down 1.05%) and Andhra Bank (down 1.11%), edged lower.
Among private sector banks, Kotak Mahindra Bank (up 0.82%), Yes Bank (up 0.71%), ICICI Bank (up 0.36%), Axis Bank (up 0.29%) and HDFC Bank (up 0.06%), edged higher. Federal Bank (down 0.26%), IndusInd Bank (down 0.35%) and City Union Bank (down 1.28%), edged lower.
Meanwhile, according to a monthly survey, business confidence among India's largest companies dropped this month despite it being the festive month of Diwali. The MNI India Business Sentiment Indicator, a gauge of sentiment among BSE-listed companies, fell to 60.9 in November 2015 from 62.3 in October 2015. The fall in sentiment was observed across both manufacturing and construction companies. On the flip side, sentiment among service sector companies rose for the first time in five months. According to the survey, Indian companies are less optimistic about the outlook for the next three months with the future expectations indicator falling to 72.2 in November 2015 from 75.1 in October 2015.
The Sensex and the Nifty snapped a two-day losing streak. The Sensex had fallen 92.75 points or 0.36% in the preceding two trading sessions to settle at 25,775.74 on Tuesday, 24 November 2015, from its close of 25,868.49 on 20 November 2015. The stock market was closed yesterday, 25 November 2015, for a holiday. The Sensex has declined 698.20 points or 2.62% in this month so far (till 26 November 2015). The Sensex has fallen 1,540.79 points or 5.60% in this calendar year so far (till 26 November 2015). From a 52-week low of 24,833.54 hit on 8 September 2015, the Sensex has risen 1,125.09 points or 4.53%. The Sensex is off 4,066.11 points or 13.54% from a record high of 30,024.74 hit on 4 March 2015.
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