Key benchmark indices further trimmed intraday gains in mid-afternoon trade. At 14:20 IST, the barometer index, the S&P BSE Sensex was up 208.02 points or 0.75% at 27,922.39. The gains for the Nifty 50 index were higher than those for the Sensex in percentage terms. The Nifty was currently up 76.40 points or 0.89% at 8,627.50. The Sensex was currently hovering below the psychologically important 28,000 level after crossing that mark in mid-morning trade. Gains in global stocks boosted sentiment on the domestic bourses. Global credit rating agency, Moody's Investors Service's statement that Rajya Sabha's approval of the Goods and Service Tax (GST) constitutional amendment bill is a credit positive for India's sovereign and non-financial corporates also lifted sentiment.
The Sensex rose 320.56 points or 1.15% at the day's high of 28,034.93 in mid-morning trade, its highest level since 2 August 2016. The barometer index rose 81.37 points or 0.29% at the day's low of 27,795.74 in early trade. The Nifty rose 102.20 points or 1.19% at the day's high of 8,653.30 in early afternoon trade, its highest level since 2 August 2016. The index rose 39.05 points or 0.45% at the day's low of 8,590.15 in early trade.
In overseas stock markets, European and Asian stocks edged higher driven by the Bank of England's aggressive stimulus measures, but with traders keeping a wary eye on US jobs data due later in the global trading day. In UK, the FTSE 100 index was currently up 0.32%. The Bank of England yesterday, 4 August 2016 cut its benchmark interest rate by 25 basis points to 0.25% from 0.5%, the lowest in its 322-year history. It expects to cut the rate further in the months ahead. The central bank also revived a UK government bond-buying program, also known as quantitative easing, that has been on pause since 2012, and said it would begin buying corporate bonds.
US stocks closed marginally higher yesterday, 4 August 2016 as investors kept to the sidelines ahead of US payrolls report for July. The monthly hiring data due later in the global day will help investors gauge the health of the economy and possibly offer insight as to when the Federal Reserve will raise interest rates again.
Closer home, the broad market depicted strength. There were more than two gainers against every loser on BSE. 1,784 shares rose and 810 shares fell. A total of 161 shares were unchanged. The BSE Mid-Cap index was currently up 1.32%. The BSE Small-Cap index was currently up 1.43%. Both these indices outperformed the Sensex.
Shares of power generation and power distribution companies gained. NTPC (up 0.47%), Torrent Power (up 0.03%), NHPC (up 1.22%), Tata Power Company (up 0.28%), Adani Power (up 0.76%), Reliance Infrastructure (up 2.04%) and Reliance Power (up 0.98%) gained. Power Grid Corporation of India declined 0.17%.
Shares of PSU Coal mining major Coal India rose 1.07%.
Pharma stocks also gained. Aurobindo Pharma (up 2.4%), Cipla (up 0.58%), Lupin (up 1.35%), Wockhardt (up 0.65%), Dr Reddy's Laboratories (up 0.64%), Divi's Laboratories (up 1.02%), Glenmark Pharmaceuticals (up 2.13%) and Cadila Healthcare (up 0.73%) gained. Sun Pharmaceutical Industries fell 0.74%.
GlaxoSmithkline Consumer Healthcare fell 2.41% after net profit rose 2.92% to Rs 160.61 crore on 0.91% decline in total income to Rs 1118.56 crore in Q1 June 2016 over Q1 June 2015. The result was announced during trading hours today, 5 August 2016.
Jamna Auto Industries rose 3.2% after consolidated net profit surged 113.8% to Rs 27.41 crore on 16.6% rise in total income to Rs 340.62 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 4 August 2016. The surge in bottom line came even as depreciation charge rose sharply. The company said in its results footnote that it provided accelerated depreciation of Rs 9.27 crore in Q1 June 2016. The company provided accelerated depreciation taking note of the fact that certain machines may not be usable as the company has decided to upgrade its manufacturing facilities.
Meanwhile, Jamna Auto Industries said that it has decided to incorporate a wholly owned subsidiary company for setting up a plant in Lucknow.
Steel Strips Wheels (SSWL) rose 4.34% after the company said that it bagged its maiden export order from US-based Elio Motors. The announcement was made during trading hours today, 5 August 2016. The latest order includes development of 2 ground wheels. Under the order, the company will supply approximately 3 million wheels spread over 5 years generating cumulative revenue of about $55 million. SSWL aims to increase its presence in North America by launching its commercial vehicle steel wheels and passenger car alloy wheels from its upcoming green field plants in India in coming months, SSWL said.
Meanwhile, as per report the government formally implemented its central inflation target of 4%, an important confirmation of the inflation-fighting policies championed by Reserve Bank of India (RBI) Governor Raghuram Rajan, who steps down next month. Junior finance minister Arjun Ram Meghwal tabled a notification in parliament's upper house that confirmed the target at 4%, plus or minus 2%, in line with the goal the government originally agreed with Rajan.
Meanwhile, Revenue Secretary, Ministry of Finance in its presentation on next steps required for the implementation of Goods and Service Tax (GST) constitutional amendment bill after the Rajya Sabha passed the GST bill said yesterday, 4 August 2016 that the target date of GST roll out is 1 April 2017. As per reports, the GST amendment bill will be tabled in the Lok Sabha on 8 August 2016. The bill requires ratification by 50% states after its passage by the Parliament, followed by the Presidential assent of Constitution Amendment and notification in the official Gazette. Cabinet will approve formation of GST Council which will make recommendation of model GST laws. Cabinet will approve the CGST and IGST laws by Centre and SGST laws by all states which have to be passed by the Centre and by all states respectively, which should happen by winter session this year. GST rules will be notified later.
Meanwhile, global credit rating agency, Moody's Investors Service said today, 5 August 2016 that the upper house's approval of the GST bill paves the way for its implementation, a credit positive for the country's sovereign and non-financial corporates. The GST will have a positive impact on growth and tax revenues over the medium term, supporting the sovereign's credit profile. Specifically, it will remove a key hurdle to the smooth movement of goods and services, and by reducing the tax administration costs of the government and corporate sector, it will improve compliance and raise tax receipts. However, its implications over the short term will be limited, given that effective implementation will take some time, and the recommended GST rates are intended to be revenue neutral, it added.
The GST will have a significant impact on relative prices since the effective total tax rates on some goods will fall as taxes are removed and replaced by a lower-rate GST, while other goods and some services will be subject to a higher effective tax rate, says the report. However, the GST will have a negligible impact on overall inflation, in line with the revenue-neutral objective. Over time, Moody believes the impact of the GST will be positive for most corporate sectors across the value chain, spanning procurement of raw materials, manufacturing of goods, sales and distribution of finished goods and services, logistics, and warehousing of goods from manufacturing locations to end-customers.
The India Meteorological Department in its weekly update on rainfall said yesterday, 4 August 2016 that during the week from 28 July to 3 August 2016, rainfall was above long period average (LPA) by 6% over the country as a whole. For the country as a whole, cumulative rainfall during this year's monsoon for July 2016 was 7% above LPA. For the country as a whole, cumulative rainfall during this year's monsoon has so far upto 3 August been 1% above LPA.
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