Key benchmark indices provisionally settled higher after what was a volatile trading session. The barometer index, the S&P BSE Sensex rose 55.83 points or 0.2% at 27,753.34, as per the provisional closing data. The Nifty 50 index gained 18.15 points or 0.21% at 8,563, as per the provisional closing data. The passage of Goods and Services Tax (GST) Constitutional Amendment Bill by the Rajya Sabha yesterday, 3 August 2016 underpinned sentiment. Firmness in global stocks also supported gains on the bourses. The Sensex had hit more than three-week low while the Nifty hit more than one-week low in late trade.
The Sensex rose 224.40 points or 0.81% at the day's high of 27,921.91 at the onset of trading session. The barometer index fell 69.54 points or 0.25% at the day's low of 27,627.97 in late trade, its lowest level since 11 July 2016. The Nifty rose 56.55 points or 0.66% at the day's high of 8,601.40 at the onset of trading session. The index declined 26.70 points or 0.31% at the day's low of 8,518.15 in late trade, its lowest level since 25 July 2016.
The market breadth indicating the overall health of the market turned positive from negative in late trade. On BSE, 1,444 shares rose and 1,258 shares fell. A total of 163 shares were unchanged. The BSE Mid-Cap index provisionally rose 0.38%. The BSE Small-Cap index provisionally gained 0.39%. Both these indices outperformed the Sensex.
The Rajya Sabha yesterday, 3 August 2016 passed the Goods and Services Tax (GST) constitutional amendment bill which the Lok Sabha had already approved last year. With the Rajya Sabha clearing the constitution amendment bill for introduction of the GST, the amended GST bill once again will have to be ratified by the Lok Sabha. Once amendments to the bill are passed in the Lok Sabha it will later go to the state assemblies for clearance. Atleast 50% of the states must approve the legislation.
A key task for the proposed GST Council now will be determining the rate of taxation. A decision on the tax rate will have to be ratified by a three-fourth majority of the centre and the states. As per the proposed legislation, the centre will have one-third weightage on its vote and states will have two-third weightage. In its report submitted to the government last December, a panel headed by Chief Economic Adviser Arvind Subramanian had recommended a revenue-neutral rate (RNR) of GST of 15-15.5%, with a standard rate of 17-18% that is to be levied on most goods and all services.
The main objective of the GST is to eliminate excessive taxation. GST is a uniform indirect tax levied on goods and services across a country. The measure would harmonize 11 state and central levies into a national sales tax, reducing business transaction costs.
In overseas stock markets, European stocks rose as investors wait for what could be the Bank of England's first interest-rate cut since the global financial crisis. The Bank of England is expected to cut benchmark interest rates after a monetary policy meet later in the global day today, 4 August 2016 in reaction to a string of data pointing to a sharp economic downturn following the UK's vote to leave the European Union. Earlier, Asian stocks edged higher as crude oil held onto its recovery and high-yielding currencies climbed.
US stocks rose yesterday, 3 August 2016 as energy companies climbed with the price of oil. A survey showed that hiring by private companies continued at a solid but uninspiring clip in July. US private employers added a better-than-expected 179,000 jobs last month, a report by a payrolls processor showed yesterday, 3 August 2016. The private employment figures came ahead of the US Labor Department's more comprehensive monthly non-farm payrolls report tomorrow, 5 August 2016, which includes both public- and private-sector employment.
The total turnover on BSE amounted to Rs 3154 crore, lower than turnover of Rs 3260.65 crore registered during the previous trading session.
Auto stocks rose on expectations that auto manufacturers may benefit from the Goods and Services Tax constitutional amendment bill passed by the Rajya Sabha yesterday, 3 August 2016. Tata Motors (up 4.35%), Bajaj Auto (up 0.91%), Hero MotoCorp (up 1.79%), Ashok Leyland (up 1.05%), Maruti Suzuki (India) (up 0.48%), TVS Motor Company (up 0.27%) and Eicher Motors (up 1.01%) edged higher. Mahindra & Mahindra (M&M) fell 0.53%. According to reports, on-road price of vehicles could drop by 8% once a nationwide Goods and Services Tax (GST) kicks off. Lower prices can be construed as indirect stimulus to boost auto sales volumes.
Ambuja Cements gained 1.05% after the company announced that Foreign Investment Promotion Board (FIPB) vide its letter dated 1 August 2016 conveyed its approval for the company's proposal to acquire 24% stake in Holcim (India) Private Limited (HIPL) and subsequent merger of HIPL with the company. The board of directors of the company at its meeting held today, 4 August 2016 took note of the satisfaction of all conditions precedent to, and confirmed the steps for, completion of the transaction. The Cabinet Committee on Economic Affairs (CCEA), Government of India had already given its approval for this transaction.
Prakash Industries rose 2.68% after the company secured a coal linkage of 53,500 metric tonnes per annum for the next five years. The announcement was made after market hours yesterday, 3 August 2016. The coal linkage attained from South Eastern Coalfields in Chattisgarh is expected to provide long term stability and cost savings to the company's captive power plant, Prakash Industries said in a statement.
Gulf Oil Lubricants India jumped 8.08% after net profit rose 52.2% to Rs 31.16 crore on 23.2% growth in net sales to Rs 283.02 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 3 August 2016. Gulf Oil Lubricants India's earnings before interest, taxation, depreciation and amortization (EBITDA) rose 39.7% to Rs 48.47 crore in Q1 June 2016 over Q1 June 2015. The company's EBIDTA margins expanded by about 202 basis points on year on year basis to about 17.1% in Q1 June 2016 on the back of volume growth.
Gulf Oil Lubricants India said its Q1 June 2016 results press release that the company has gained significant volume traction in Q1 June 2016 achieving growth across all business segments. The company's initiatives on distribution expansion started showing impact as its channel business grew double digit in volumes after many quarters. B2B businesses including original equipment manufacturer (OEM) volumes have also continued their growing trend recording double digit growth, the company said. An institutional order also boosted volumes in Q1 June 2016, it added.
Arvind rose 4.65% after consolidated net profit jumped 32.92% to Rs 73.36 crore on 17.08% growth in total income to Rs 2123.74 crore in Q1 June 2016 over Q1 June 2015. The result was announced during trading hours today, 4 August 2016. Arvind said in its Q1 June 2016 results press release that its profit after tax before exceptional items rose 27% to Rs 74 crore on 18% increase in revenue to Rs 2104 crore in Q1 June 2016 over Q1 June 2015. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 16% at Rs 241 crore in Q1 June 2016 over Q1 June 2015.
Commenting on the results as well as outlook of the company, Jayesh Shah, director and chief financial officer said that the company's textiles business continues to deliver a strong performance as it continues to pursue a calibrated growth strategy. The brands business continues to demonstrate strong growth, he said. The company's established power brands consolidated their market positions in Q1 June 2016.
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