Key benchmark indices continued to hover within a narrow range in positive terrain in mid-morning trade as reports suggesting that the long-pending GST Bill is listed for consideration and passage in Rajya Sabha tomorrow, 3 August 2016 boosted sentiment. At 11:25 IST, the barometer index, the S&P BSE Sensex was up 120.55 points or 0.43% at 28,123.67. The gains for the Nifty 50 index were lower than the Sensex's gains in percentage terms. The Nifty was currently up 31.30 points or 0.36% at 8,667.85. Data showing a good growth in eight core industries in June also supported gains on the bourses.
The market breadth indicating the overall health of the market was positive. On BSE, 1,268 shares rose and 1,047 shares declined. A total of 129 shares were unchanged. The BSE Mid-Cap index was currently up 0.7%, outperforming the Sensex. The BSE Small-Cap index was currently up 0.39%, underperforming the Sensex.
In overseas stock markets, most Asian stocks dropped, with stocks taking cues from a modestly lower day on Wall Street overnight as US crude oil prices slid. US stocks lost momentum to finish mostly lower yesterday, 1 August 2016 as crude-oil futures returned to bear-market territory and weaker-than-expected manufacturing data raised doubts about the strength of the economy.
Cement stocks were mixed. Shree Cement rose 0.09%. UltraTech Cement declined 1.09%.
Grasim Industries rose 0.15%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
ACC dropped 0.79% as the stock turned ex-dividend today, 2 August 2016 for interim dividend of Rs 11 per share for the year ending 31 December 2016 (FY 2016).
Ambuja Cements declined 1.27% as the stock turned ex-dividend today, 2 August 2016 for interim dividend of Rs 1.60 per share for the year ending 31 December 2016 (FY 2016).
IT stocks were mixed. HCL Technologies (up 2.14%) and TCS (up 0.01%) gained. Infosys (down 0.61%) and Wipro (down 0.8%) declined.
Tech Mahindra rose 1.79%. The company's consolidated net profit fell 12.60% to Rs 750 crore on 0.54% increase in revenue to Rs 6921 crore in Q1 June 2016 over Q4 March 2016. EBITDA fell 10.59% to Rs 1029 crore in Q1 June 2016 over Q4 March 2016. The active client count stood at 818 in Q1 June 2016. The consolidated net profit rose 20.5% to Rs 750 crore on 10% increase in revenue to Rs 6921 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 1 August 2016. On a consolidated basis, earnings before interest, taxes, depreciation and amortization (EBITDA) rose 13.7% to Rs 1029 crore in Q1 June 2016 over Q1 June 2015.
Vineet Nayyar, Vice Chairman, Tech Mahindra, said that the company has had a steady quarter inspite of the seasonal weakness in the mobility business. The company looks forward to continuing its journey of improving the profitability of business. C P Gurnani, Managing Director & CEO, Tech Mahindra said that the business has done well on several parameters like large client growth, digital wins and strong cash flows. Automation and Delivery Excellence are two key focus areas for the year going forward, he added.
On macro front, eight core industries comprising nearly 38% of the weight of items included in the Index of Industrial Production (IIP) increased 5.2% in June 2016 over June 2015, compared to 2.8% growth in May 2016 and 3.1% growth in June 2015. Its cumulative growth during the three months period from April to June 2016 was 5.4%. The data was announced after market hours yesterday, 1 August 2016.
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 tomorrow, 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.
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