Key benchmark indices edged higher in afternoon trade. At 13:15 IST, the barometer index, the S&P BSE Sensex was up 116.45 points or 0.42% at 28,140.78. The Nifty 50 index was currently up 35.60 points or 0.41% at 8,651.40. Market sentiment was positive after the US Federal Reserve has opted to keep interest rates at ultra-low level after the conclusion of a two-day monetary policy meeting. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets.
The Sensex rose 125.39 points or 0.45% at the day's high of 28149.72 in afternoon trade. The barometer index rose 40.57 points or 0.14% at the day's low of 28,064.90 at the onset of trading session. The Nifty rose 37.45 points or 0.43% at the day's high of 8,653.25 in afternoon trade. The index rose 10.55 points or 0.12% at the day's low of 8,626.35 at the onset of trading session.
In overseas stock markets, most European stocks declined in early trade today, 28 July 2016, as Royal Dutch Shell Plc and Dialog Semiconductor Plc fell after reporting results. Asian stocks edged lower tracking lacklustre trading in US markets overnight. In Japan, the Nikkei 225 Average ended 1.13% lower. 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 closed mixed yesterday, 27 July 2016, after the Federal Reserve statement and major earnings reports. The Federal Open Market Committee (FOMC) has decided not to raise interest rates, maintaining the ultra-low level they have been at since December 2015. The US central bank opted to keep rates between 0.25% and 0.5%. The Fed said near-term risks to the economic outlook have diminished but inflation remained below the bank's target.
Closer home, the market breadth indicating the overall health of the market was strong. 1,499 shares rose and 984 shares declined. A total of 185 shares were unchanged. The BSE Mid-Cap index was currently up 0.82%. The BSE Small-Cap index was currently up 0.87%. Both these indices outperformed the Sensex.
Most metal shares declined. Tata Steel (down 2.26%), Jindal Steel & Power (down 2.1%), JSW Steel (down 1.59%), Steel Authority of India (down 1.54%), Hindustan Zinc (down 0.92%), National Aluminium Company (down 0.84%), Bhushan Steel (down 0.79%) and Vedanta (down 0.56%), edged lower. Hindalco Industries (up 0.15%), Hindustan Copper (up 0.85%) and NMDC (up 1.40%), edged higher.
FMCG shares were mixed. Colgate Palmolive (India) (down 1.12%), Dabur India (down 0.68%), Marico (down 0.52%), Godrej Consumer Products (down 0.48%), Hindustan Unilever (down 0.29%) and GlaxoSmithKline Consumer Healthcare (down 0.16%), edged lower. Procter & Gamble Hygiene & Health Care (up 0.31%), Bajaj Corp (up 0.43%), Jyothy Laboratories (up 0.57%), Nestle India (up 1.47%), Britannia Industries (up 2.22%) and Tata Global Beverages (up 2.37%), edged higher.
HDFC was down 0.33% to Rs 1383.25. The company said that it will issue secured redeemable non convertible debentures aggregating Rs 500 crore on private placement basis. The announcement was made during market hours today, 28 July 2016.
HDFC said that the non convertible debentures (NCDs) carry a coupon of 8.2% per annum, payable annually with a tenor of 5 years. The issue of NCDs will open tomorrow, 29 July 2016 and closes on the same day. The object of the issue is to augment the long term resources of the company. The proceeds would be utilized for financing/refinancing the housing finance business requirements of the company.
Separately, HDFC announced after market hours yesterday, 27 July 2016 that its board granted in-principle approval for the amalgamation of wholly-owned subsidiaries, Grandeur Properties, Haddock Properties, Winchester Properties, Pentagram Properties and Windermere Properties with HDFC. The amalgamation is subject to various regulatory approvals as applicable. HDFC with this amalgamation intends to consolidated the activities of the wholly owned subsidiaries in the company and reduce operation costs. The subsidiaries are in the business of generating rental income on commercial properties. The amalgamation will not entail any cash consideration or any issue of shares. The shares and debentures held by the company in its subsidiaries will be cancelled after amalgamation.
Meanwhile, according to reports, the government yesterday, 27 July 2016, cleared changes in the constitutional amendment bill on Goods and Services Tax (GST) including doing away with the additional 1% tax by producing states and compensating all states for any revenue loss in the first five years post the GST rollout. The Cabinet, headed by Prime Minister Narendra Modi, decided not to accede to the Congress party's demand of specifying the GST rate in the Constitution itself, reports suggested. It is likely to be part of the GST bill that will be legislated separately by both the Centre and states, as per reports.
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.
Powered by Capital Market - Live News
