A bout of volatility was witnessed in mid-afternoon trade as key benchmark indices weakened once again after trimming intraday losses. At 14:25 IST, the barometer index, the S&P BSE Sensex was down 71.69 points or 0.26% at 27,980.17. The decline in the Nifty 50 index was lower than the Sensex's fall in percentage terms. The Nifty was currently down 4.50 points or 0.05% at 8,634. The Sensex was currently trading below the psychologically important 28,000 level after falling below that level in afternoon trade. The market breadth indicating the overall health of the market was negative. On BSE, 1,093 shares rose and 1,568 shares declined. A total of 131 shares were unchanged. The BSE Mid-Cap index was currently up 0.1%, outperforming the Sensex. The BSE Small-Cap index was currently down 0.09%. The losses for this index was lower than the Sensex's decline in percentage terms.
The Sensex lost 178.33 points or 0.63% at the day's low of 27,873.53 in afternoon trade, its lowest level since 25 July 2016. The barometer index rose 232.99 points or 0.83% at the day's high of 28,284.85 in morning trade, its highest level since 10 August 2015. The Nifty lost 48 points or 0.55% at the day's low of 8,590.50 in afternoon trade, its lowest level since 27 July 2016. The index rose 72.80 points or 0.84% at the day's high of 8,711.30 in morning trade, its highest level since 16 April 2015.
In overseas stock markets, European and Asian shares rose as the chances of a US interest-rate increase diminished, after the nation's economic growth for the second quarter came in below expectations. The odds of a September US interest rate rise dropped to 12% from 18%, Fed Funds futures data showed, after the US economy grew at just 1.2% in the second quarter from a year earlier, well below estimates, data showed on Friday, 29 July 2016. Low US interest rates could support demand for emerging-market assets.
In mainland China, the Shanghai Composite closed 0.87% lower. In Hong Kong, the Hang Seng index settled 1.09% higher. China's official manufacturing purchasing managers' index slipped below 50 in July, indicating a contraction in the nation's factory activity for the first time in five months, official data showed today, 1 August 2016. The index fell to 49.9 in July from 50 a month ago. China's official non-manufacturing purchasing managers' index, a gauge of activity outside factory floors, climbed to 53.9 in July from 53.7 in June, the National Bureau of Statistics said today, 1 August 2016. A reading above 50 indicates an expansion, while a figure below that level indicates a contraction.
Strong earnings from Amazon and Google parent Alphabet lifted US stocks mostly higher on Friday, 29 July 2016, countering a disappointing report on second-quarter US economic growth.
FMCG stocks were mixed. Tata Global Beverages (down 0.95 %), Britannia Industries (down 1.64%), Hindustan Unilever (HUL) (down 0.33%), Dabur India (down 0.82%), GlaxoSmithkline Consumer Healthcare (down 0.01%), and Bajaj Corp (down 2.96%) declined. Marico (up 0.55%), Jyothy Laboratories (up 0.82%), Procter & Gamble Hygiene and Health Care (up 0.24%), Colgate Palmolive India (up 1.95%), and Godrej Consumer Products (up 0.04%) gained.
Nestle India fell 2.48% after the company announced Q2 results after market hours on Friday, 29 July 2016. Nestle India reported net profit of Rs 230.84 crore in Q2 June 2016 as against net loss of Rs 64.40 crore in Q2 June 2015. Net sales rose 16.66% to Rs 2256.09 crore in Q2 June 2016 over Q2 June 2015. Results for the quarter and half year ended 30 June 2016 are not entirely comparable with the results of the corresponding periods due to Maggi noodles issue in 2015, the company said in a statement. The company said its net sales jumped on a base impacted by Maggi noodles issue in 2015. The company's domestic sales increased by 17.5% and exports increased by 7% in Q2 June 2016 over Q2 June 2015.
Nestle relaunched Maggi noodles in the market at the beginning of November 2015 after withdrawing the product from the market in June 2015 amid allegations that it contained high levels of lead.
Shares of power generation and power distribution companies were mixed. NHPC (down 0.79%), Adani Power (down 1.96%), Reliance Infrastructure (down 1.19%) and Reliance Power (down 2.58%) declined. Torrent Power (up 1.03%), Tata Power Company (up 0.01%), and Power Grid Corporation of India (up 1.48%) gained.
NTPC rose after the company said that its board approved issuing secured/unsecured, redeemable, taxable/tax-free, cumulative/non-cumulative, non-convertible debentures (bonds/NCDs) upto Rs 15000 crore. The stock gained 0.09% to Rs 158.60. The announcement was made after market hours on Friday, 29 July 2016.
Shares of PSU coal major Coal India dropped 0.5%.
Mahindra & Mahindra (M&M) rose 0.44% after the company announced that total tractor sales rose 14% to 17,553 units in July 2016 over July 2015. Domestic sales rose 15% to 16,452 units in July 2016 over July 2015. Exports fell 7% to 1,101 units in July 2016 over July 2015. The announcement was made during market hours today, 1 August 2016. Commenting on monthly performance, Rajesh Jejurikar, President and Chief Executive- Farm Equipment and Two wheeler division, M&M said that with normal rainfall and its improved spread across India in the month of July, Kharif sowing has been more than last year. The company hopes for as improved agricultural output and tractor demand in the future, he added.
Separately, M&M said its total auto sales rose 14% to 39,458 units in July 2016 over July 2015. Domestic auto sales rose 14% to 35,305 units in July 2016 over July 2015. Exports rose 16% to 4,153 units in July 2016 over July 2015. Total passenger vehicles sales grew 20% to 17,356 units in July 2016 over July 2015. Medium and heavy commercial vehicles (MHCV) sales rose 22% to 382 units in July 2016 over July 2015.
Eicher Motors rose 0.15% after the company announced that total sale volume of VE Commercial Vehicles, an unlisted subsidiary of Eicher Motors rose 18.28% to 4,374 units in July 2016 over July 2015. Separately, the company announced that total motorcycles sales rose 31% to 53,378 units in July 2016 over July 2015. Exports rose 40% to 1,250 units in July 2016 over July 2015. Both the announcements were made during market hours today, 1 August 2016.
Crompton Greaves Consumer Electrical rose 5.16% after the company reported good Q1 June 2016 results after market hours on Friday, 29 July 2016. Crompton Greaves Consumer Electrical (CGCEL), the demerged arm of Crompton Greaves, reported net profit of Rs 91.94 crore in Q1 June 2016 as against net loss of Rs 0.07 crore in Q1 June 2015. Net sales was reported at Rs 1120.84 crore in Q1 June 2016. No sales were reported in Q1 June 2015. The company said its total income rose 15.4% to Rs 1120.80 crore in Q1 June 2016 over Q1 June 2015. Operating profit (profit before interest and tax before corporate expenses and one-time items) rose 24.4% to Rs 172.50 crore in Q1 June 2016 over Q1 June 2015. Operating profit margin improved to 15.4% in Q1 June 2016 from 14.3% in Q1 June 2015. For the above comparison purposes, the company has considered the sales & segment earnings before interest & tax (EBIT) numbers of the consumer business as reported by Crompton Greaves in Q1 June 2015.
Rico Auto Industries surged 15.92% after consolidated net profit jumped 264% to Rs 15.58 crore on 8.4% growth in total income to Rs 275.96 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Friday, 29 July 2016.
The outcome of a monthly survey showed that the performance of India's manufacturing economy continued to improve in July, with a stronger expansion in new business contributing to faster increases in output and buying levels. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) rose to a four-month high of 51.8 in July from a reading of 51.7 in June-indicating a further improvement in overall business conditions across the sector.
Meanwhile, the government reportedly today, 1 August 2016, sought parliament's approval to spend an extra Rs 1.03 lakh crore ($15.43 billion) in the fiscal year ending in March 2017. In a supplementary demand for grants laid before parliament by the finance ministry, the government said net cash outgo would be Rs 20948 crore. The additional expenditure includes Rs 5000 crore for a rural jobs program, about Rs 4200 crore for road construction and Rs 2000 crore for disaster management.
Meanwhile, investors are awaiting the progress on the Goods and Services Tax (GST) constitutional amendment bill in parliament. According to reports, the government on Friday, 29 July 2016, listed the much-awaited GST bill for consideration and passage in Rajya Sabha's agenda for this week. Minister of state for parliamentary affairs Mukhtar Abbas Naqvi, while making a statement regarding government business for the week starting 1 August in the Upper House, reportedly said that the GST constitutional amendment bill will be taken up for consideration and passage in the Rajya Sabha. 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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