Key benchmark indices extended gains, with the barometer index, the S&P BSE Sensex, hitting its highest level in more than 11 months and the Nifty 50 index hitting its highest level in more than 15 months. At 10:15 IST, the Sensex was up 224.27 points or 0.8% at 28,200.79. The Nifty was currently up 71.05 points or 0.83% at 8,661.70. The Sensex was currently trading above the psychologically important 28,000 level after crossing that level in early trade. The latest upmove on the bourses was triggered by expectations that the Goods and Services Tax (GST) constitutional amendment bill may be passed in parliament during the ongoing monsoon session.
The Sensex jumped 234.36 points or 0.83% at the day's high of 28,210.88 in morning trade, its highest level since 10 August 2015. The barometer index lost 3.15 points or 0.01% at the day's low of 27,973.37 in early trade. The Nifty rose 74.35 points or 0.86% at the day's high of 8,665 in morning trade, its highest level since 17 April 2015. The index rose 3.20 points or 0.03% at the day's low of 8,593.85 in early trade.
The latest upmove on the bourses was triggered by expectations that the Goods and Services Tax (GST) constitution amendment bill may be passed in parliament during the ongoing monsoon session. According to reports, the empowered committee of state finance ministers which met Finance Minister Arun Jaitley yesterday, 26 July 2016, has reached a consensus on key aspects of the constitutional amendment bill on GST. The committee has decided to keep the main GST rate low, according to reports. The GST bill is likely to be moved in the Rajya Sabha next week. The Rajya Sabha has already allotted five hours for discussion on the GST bill, according to media 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.
The broad market depicted strength. There were more than two gainers against every loser on BSE. 1,405 shares rose and 487 shares declined. A total of 84 shares were unchanged. The BSE Mid-Cap index was currently up 0.77%, underperforming the Sensex. The BSE Small-Cap index was currently up 0.84%, outperforming the Sensex.
In overseas stock markets, Asian stocks witnessed a mixed trend. Japanese stocks edged higher on expectations of further easing of monetary policy from the Bank of Japan later this week. The Nikkei 225 Average was currently up 2.19%. 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.
Most US stocks edged higher in a lacklustre trading session yesterday, 26 July 2016. Investors were reluctant to carve out big positions ahead of the monetary policy outcome from the Federal Reserve. The Federal Open Market Committee (FOMC) is widely expected to keep the benchmark fed funds rates unchanged after the conclusion of two-day monetary policy today, 27 July 2016. Market participant will scrutinize the Fed statement for clues on policy direction. The Fed has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015.
Bank stocks edged higher on renewed buying. Among public sector banks, Punjab National Bank (up 1.97%), Bank of India (up 1.99%), State Bank of India (up 1.41%), Bank of Baroda (up 1.13%), Union Bank of India (up 1.27%), IDBI Bank (up 1.02%) and Indian Bank (up 0.3%) rose.
Reserve Bank of India (RBI) Governor Raghuram Rajan yesterday, 26 July 2016, said that a clean-up of the balance sheets of public sector banks is underway and needs to be taken to its logical conclusion. Rajan was speaking at the 10th Statistics Day Conference 2016 in Mumbai.
Among private sector banks, ICICI Bank (up 2.69%), IndusInd Bank (up 1.01%), Kotak Mahindra Bank (up 1.3%) and Axis Bank (up 0.33%) edged higher.
Index heavyweight HDFC Bank was up 0.54% at Rs 1,245.40. The stock hit a high of Rs 1,247 and a low of Rs 1,236.30 so far during the day.
Yes Bank was off 0.58%. The bank announced before market hours today, 27 July 2016, that it has received an in-principle approval from the Securities & Exchange Board of India (Sebi) to sponsor a mutual fund and set up an asset management company (AMC) and a trustee company. The bank said it has already identified senior leadership and technology architecture to establish this business, and will commence operations within 12 months.
Yes Bank is scheduled to announce Q1 June 2016 results today, 27 July 2016.
IT stocks also moved higher. Oracle Financial Services Software (up 1.11%), TCS (up 1.07%), HCL Technologies (up 0.73%) and Tech Mahindra (up 0.76%) edged higher.
Index heavyweight and software major Infosys was up 0.1% at Rs 1,089.90. The stock hit a high of Rs 1,097.10 and a low of Rs 1,085.70 so far during the day.
Wipro was up 0.76% after the company announced before market hours today, 27 July 2016, that it has launched a three-year Corporate Social Investment project in South Africa in partnership with the country's Industrial Development Corporation (IDC) to set up 29 computer laboratories that will benefit 28,000 students from rural areas.
Shares of Dr Reddy's Laboratories (DRL) tumbled, with the stock extending losses registered during the previous trading session triggered by weak Q1 June 2016 results. The stock off 8.87% at Rs 3,028. The stock had fallen 4.37% to settle at Rs 3,322.85 yesterday, 26 July 2016. DRL's consolidated net profit fell 76.28% to Rs 153.50 crore on 14.06% decline in total income to Rs 3289.50 crore in Q1 June 2016 over Q1 June 2015. Meanwhile, a domestic brokerage has reportedly downgraded the DRL stock to ''sell'' from ''reduce'' and cuts its price target to Rs 2,500 from Rs 3,100 stating that the company's US business would face headwinds from double-digit price erosion on base business.
Powered by Capital Market - Live News
