Key benchmark indices held firm in afternoon trade. At 13:19 IST, the barometer index, the S&P BSE Sensex, was up 94.72 points or 0.34% at 28,173.07. The Nifty 50 index was currently up 26.20 points or 0.3% at 8,709.35. Gains in European and Asian stocks aided the upmove on the domestic bourses. Global stocks rose after upbeat US job data for July 2016. The market breadth indicating the overall health of the market was positive. On BSE, 1,513 shares rose and 1,026 shares fell. A total of 136 shares were unchanged. The BSE Mid-Cap index was currently up 0.77%. The BSE Small-Cap index was currently up 0.72%. Both these indices outperformed the Sensex.
The Sensex rose 148.03 points or 0.53% at the day's high of 28,226.38 in early trade, its highest level since 1 August 2016. The barometer index rose 56.64 points or 0.2% at the day's low of 28,134.99 in early afternoon trade. The Nifty rose 40.35 points or 0.46% at the day's high of 8,723.50 in early trade, its highest level since 16 April 2015. The index rose 14.45 points or 0.17% at the day's low of 8,697.60 in early afternoon trade.
In overseas stock markets, European and Asian markets rose with sentiment underpinned by a stronger-than-expected US jobs report released on Friday, 5 August 2016. The US economy is the world's largest economy. Japanese stocks edged higher as the yen weakened against the dollar amid the dollar's broad strength driven up upbeat job data. The Nikkei 225 index closed 2.44% higher. Chinese shares shrugged off weak trade data. In mainland China, the Shanghai Composite settled 0.9% higher. In Hong Kong, the Hang Seng index was currently up 1.52%. China's exports continued to fall in dollar terms in July 2016 from a year earlier, as global demand for goods from the world's second-largest economy remained sluggish. Exports slid 4.4% in July 2016 from a year earlier, following a decline of 4.8% in June 2016. Imports fell 12.5% in July 2016, compared with an 8.4% decrease in June 2016.
US stocks edged higher during the previous trading session on Friday, 5 August 2016, with the S&P 500 index and the Nasdaq Composite index settling at all-time closing highs, after a stronger-than-expected jobs report. The US economy added 255,000 jobs in July 2016, which follows a stellar gain in June, demonstrating that the economy is still healthy, despite relatively muted gross domestic product. The unemployment rate was unchanged at 4.9% even as the labor-force participation rate edged up to 62.8%, suggesting the labor market is tightening.
Hero MotoCorp rose 0.47% after the company's net profit rose 18.13% to Rs 883.10 crore on 7.84% rise in total income to Rs 8131.04 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours today, 8 August 2016.
Shares of power generation and power distribution companies gained. Torrent Power (up 4.85%), NHPC (up 0.8%), Tata Power Company (up 0.42%), Adani Power (up 3.31%), Power Grid Corporation of India (up 0.01%), Reliance Infrastructure (up 0.09%) and Reliance Power (up 1.25%) gained. NTPC declined 0.96%.
Shares of PSU Coal mining major Coal India rose 0.33%.
Capital goods stocks were mixed. Bharat Heavy Electricals (Bhel) (up 2.4%), Thermax (up 0.89%), and Siemens (up 0.15%) gained. Havells India (down 0.01%), ABB India (down 0.15%), and L&T (down 0.44%) declined.
Bharat Electronics lost 1.31% after net profit fell 52.94% to Rs 36.09 crore on 18.1% decline in total income to Rs 1010.17 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Friday, 5 August 2016. Bharat Electronics' board approved the proposal for buyback of equity shares of the company for a total consideration not exceeding Rs 2171.15 crore at a buyback price of Rs 1,305 per share through a tender offer. The promoters of the company intimated their interest to participate in the proposed buyback.
Union Bank of India lost 6.31% after net profit fell 67.9% to Rs 166.32 crore on 1.4% decline in total income to Rs 8916.51 crore in Q1 June 2016 over Q1 June 2015. The result was announced on Saturday, 6 August 2016. Union Bank of India's domestic net interest margin (NIM) stood at 2.36% in Q1 June 2016 compared with 2.46% in Q1 June 2015. Global NIM stood at 2.28% in Q1 June 2016 as against 2.39% in Q1 June 2015.
The bank's average current and savings account (CASA) ratio improved to 29.5% in Q1 June 2016 from 27% in Q1 June 2015 and 29.2% in Q4 March 2016. Union Bank of India's gross non-performing assets (NPA) stood at Rs 27280.90 crore as on 30 June 2016 compared with Rs 24170.89 crore as on 31 March 2016 and Rs 14143.62 crore as on 30 June 2015. The ratio of gross NPA to gross advances stood at 10.16% as on 30 June 2016 as against 8.7% as on 31 March 2016 and 5.53% as on 30 June 2015. The ratio of net NPA to net advances stood at 6.16% as on 30 June 2016 compared with 5.25% as on 31 March 2016 and 3.08% as on 30 June 2015.
The bank's provisions and contingencies jumped 110.6% to Rs 1352.96 crore in Q1 June 2016 over Q1 June 2015. Provision coverage ratio stood at 50% as on 30 June 2016 as against 51% as on 31 March 2016 and 58% as on 30 June 2015.
Britannia Industries jumped 7.76% after consolidated net profit rose 13.15% to Rs 219.13 on 9.73% increase in total income to Rs 2236.05 crore in Q1 June 2016 over Q1 June 2015. The result was announced during trading hours today, 8 August 2016. Britannia Industries said in a press release that consolidated profit from operations rose 11% to Rs 288 crore in Q1 June 2016 over Q1 June 2015. Consolidated revenue grew 8% for at Rs 2162 crore in Q1 June 2016 over Q1 June 2015.
Commenting on the performance, Varun Berry, managing director of Britannia, said that the category growths remained subdued during the quarter, however a good monsoon and impact of 7th pay commission would aid consumption and boost demand going forward. The deteriorating geopolitical situation and currency fluctuations in certain geographies like Middle East and Africa have also impacted the company's growths. The firm launched some delightful products like Good day Nuts cookies, NutriChoice Oat cookies & Biscotti during the quarter which bolstered growth. The company intends to drive consumer off take & strengthen its momentum through re-stage of its brands and plugging its product portfolio gaps going forward. Commodity prices have firmed up significantly over the last two quarters and the firm has initiated a combination of price increase & cost efficiency measures to address this. With a strengthened back end in terms of technologically superior factories and state-of-the-art R&D centre, the company is confident of delivering new products for consumers, he added.
Meanwhile, the amendments made by Rajya Sabha in the constitutional amendment bill on Goods and Services Tax (GST) will be taken up for its passage by the Lok Sabha this week. The amended GST constitutional amendment bill was passed by the Rajya Sabha last week. The passage of the constitutional amendment bill in the Rajya Sabha kicks off a legislative marathon in which the Parliament and state assemblies will need to pass further laws setting the rate and scope of the GST. The government plans to implement the nationwide GST from 1 April 2017.
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.
On the macro front, the government in consultation with the Reserve Bank of India (RBI) has notified consumer price inflation target of 4% with upper tolerance level of 6% and lower tolerance level of 2% to be achieved by the Reserve Bank of India (RBI). The government notified the inflation target range of 2% to 6% in the Official Gazette on Friday, 5 August 2016 and it will be valid until 31 March 2021. The inflation target is to be fixed by the central government in consultation with the RBI once in every five years. According a statement from to the finance ministry, the key advantage of a range around a target is that it allows the Monetary Policy Committee (MPC) to recognise the short run trade-offs between inflation and growth but enables it to pursue the inflation target in long run over the course of business cycle. The range also accommodates data limitations, projection errors, short-run supply gaps and instability in the agriculture production, an important factor for CPI inflation, as food articles have a major weight in the CPI indices. It also allows to accommodate unanticipated short-term shocks even while nudging public inflation expectations on the centre of the range, to which the monetary policy will return the economy over the medium term, leading to transparency and predictability.
If the average inflation is more than the upper tolerance level of 4% + 2%, that is, 6%, or less than the lower tolerance level of 4% - 2%, that is 2%, for any three consecutive quarters, it would mean a failure to achieve the inflation target. Where RBI fails to meet the inflation target, in terms of the provisions of RBI Act, it shall set out a report to the Central Government stating the reasons for failure to achieve the inflation target, remedial actions proposed to be taken by RBI and an estimate of the time-period within which the inflation target shall be achieved pursuant to timely implementation of proposed remedial actions.
The government has initiated the process of shifting to a framework of Monetary Policy Committee (MPC) for deciding interest rates. RBI currently sets the rates. The RBI is set to announce monetary policy decision at 11:00 IST tomorrow, 9 August 2016, after a policy review.
Powered by Capital Market - Live News
