Key benchmark indices registered small losses in a volatile trading session as investors maintained caution ahead of the possible discussion on the Goods and Services Tax (GST) bill in Rajya Sabha this week. The barometer index, the S&P BSE Sensex lost 48.74 points or 0.17% to settle at 28,003.12. The decline in the Nifty 50 index was lower than the Sensex's fall in percentage terms. The Nifty dropped 1.95 points or 0.02% to settle at 8,636.55. The Sensex settled above the psychologically important 28,000 level after hovering above and below that level in intraday trade. The Sensex hit its lowest closing level in almost a week.
The Sensex and the Nifty declined for the second straight trading session.
Stocks of public sector banks declined. Stocks of private sector banks were mixed. Capital goods stocks were mixed.
ICICI Bank edged lower after the bank reported weak Q1 June 2016 results. L&T dropped in volatile trade after the company announced strong Q1 earnings. Maruti Suzuki India rose after the company reported 12.7% growth in total sales in July 2016. Mahindra & Mahindra edged higher after the company reported 14% growth each in its total tractor sales and total automobile sales in July 2016. Shares of Advanced Enzyme Technologies (AETL) witnessed strong debut on the bourses.
In overseas stock markets, European stocks were mixed. Asian stocks 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.
The Sensex lost 48.74 points or 0.17% to settle at 28,003.12, its lowest closing level since 26 July 2016. The index rose 232.99 points or 0.83% at the day's high of 28,284.85. The index lost 178.33 points or 0.63% at the day's low of 27,873.53.
The Nifty shed 1.95 points or 0.02% to settle at 8,636.55, its lowest closing level since 27 July 2016. The index rose 72.80 points or 0.84% at the day's high of 8,711.30. The index lost 48 points or 0.55% at the day's low of 8,590.50.
The BSE Mid-Cap index rose 0.38%. The BSE Small-Cap index was up 0.1%. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,178 shares rose and 1,563 shares declined. A total of 153 shares were unchanged.
The total turnover on BSE amounted to Rs 3937 crore, higher than turnover of Rs 3671.73 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Industrials index (down 1.04%), the BSE Bankex index (down 1.18%) and the BSE Capital Goods index (down 2.34%) underperformed the Sensex. The BSE IT index (up 1.76%), the BSE Metal index (up 1.31%) and the BSE Teck index (up 1.54%) outperformed the Sensex.
Stocks of public sector banks declined. Bank of Baroda (down 3.06%), Union Bank of India (down 1.92%), Indian Bank (down 1.8%), IDBI Bank (down 2.22%), Corporation Bank (down 1.44%), Bank of India (down 1.48%), State Bank of India (down 0.7%) and Punjab National Bank (down 0.97%) declined.
Stocks of private sector banks were mixed. Yes Bank (up 0.35%), IndusInd Bank (up 1.63%) and Axis Bank (up 0.76%) edged higher. Kotak Mahindra Bank declined 1.02%.
Index heavyweight HDFC Bank was off 0.39%.
ICICI Bank lost 5.19% at Rs 249.20 after net profit fell 24.99% to Rs 2232.35 crore on 6.06% increase in total income to Rs 16759.51 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Friday, 29 July 2016.
ICICI Bank's gross non-performing assets (NPAs) stood at Rs 27193.58 crore as on 30 June 2016 as against Rs 26221.25 crore as on 31 March 2016 and Rs 15137.61 crore as on 30 June 2015. The ratio of gross NPAs to gross advances stood at 5.87% as on 30 June 2016 as against 5.82% as on 31 March 2016 and 3.68% as on 30 June 2015. The ratio of net NPAs to net advances stood at 3.35% as on 30 June 2016 as against 2.98% as on 31 March 2016 and 1.58% as on 30 June 2015. The bank's provisions and contingencies (excluding tax provisions) rose 163.19% to Rs 2514.52 crore in Q1 June 2016 over Q1 June 2015. Provision coverage ratio of the bank was at 57.1% as on 30 June 2016.
The bank said it continued to achieve robust growth in current and savings account (CASA) deposits. ICICI Bank's total CASA deposits increased by 18% to Rs 191348 crore as on 30 June 2016 over 30 June 2015. The bank's CASA ratio was 45.1% at 30 June 2016 compared to 45.8% at 31 March 2016 and 44.1% at 30 June 2015. The average CASA ratio was at 41.7% in Q1 June 2016 compared to 40.5% in Q4 March 2016 and 41.1% in Q1 June 2015. Total deposits increased by 15% to Rs 424086 crore at 30 June 2016 over 30 June 2015. The bank had a network of 4,451 branches and 14,073 ATMs at 30 June 2016.
On a consolidated basis, the bank's net profit fell 22.17% to Rs 2515.85 crore on 9.03% increase in total income to Rs 24483.75 crore in Q1 June 2016 over Q1 June 2015.
Capital goods stocks were mixed. Bharat Heavy Electricals (down 2.74%), Suzlon Energy (down 1.43%), Thermax (down 1.39%), ABB India (down 0.78%), Praj Industries (down 0.17%) and Crompton Greaves (down 0.06%) edged lower. Havells India (up 3.72%), Alstom T&D India (up 1.33%), Siemens (up 1.11%), Bharat Electronics (up 0.26%) and BEML (up 0.22%) edged higher.
India's largest engineering and construction major by sales L&T dropped in volatile trade after announcing results. The stock dropped 4.12% at Rs 1,493.80. The stock was volatile. The stock hit high of Rs 1,584.95 and low of Rs 1,490.10 in intraday trade. The company's consolidated net profit rose 46% to Rs 610 crore on 9.1% growth in gross revenue to Rs 21874 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Friday, 29 July 2016. L&T's consolidated order book increased by 8% on year-on-year (YoY) basis to Rs 2.57 lakh crore as on 30 June 2016. International order book constituted 29% of the total order book.
On future business outlook, L&T said that on the international front, the company will continue to target select prospects in the space of core infrastructure and oil & gas sector in the Middle East, Africa and other neighboring countries. The company said it has recently finalised its strategic plan for five years with a focus on profitable growth. L&T said it remains well placed to benefit from emerging opportunities with its execution capabilities and leadership position in various sectors.
Separately, L&T announced during market hours today, 1 August 2016 that it won orders worth Rs 1167 crore across various business segments.
Stocks of public sector oil marketing companies edged higher. HPCL (up 0.44%) rose. Indian Oil Corporation (IOCL) (down 0.25%) edged lower. IOCL announced that the petrol price was cut by Rs 1.42 a litre and diesel by Rs 2.01 per litre in Delhi (including state levies) with corresponding price revision in other states. The price changes were effective from midnight of 31 July 2016. Petrol will cost Rs 61.09 a litre in Delhi as compared to Rs 62.51 a litre earlier. Similarly, diesel will cost Rs 52.27 per litre as against Rs 54.28 earlier.
BPCL was up 0.43% after the company said it has entered into an agreement for acquiring a 21% stake (on a fully diluted basis) in the share capital of FINO PayTech for a consideration of Rs 251 crore in an all cash deal. The definitive agreements to this effect were signed on 29 July 2016 and the transaction is expected to be completed by 31 December 2016. FINO PayTech is one of the entities to have been granted an in principle approval by the Reserve Bank of India (RBI) for setting up a Payments Bank. FINO Pay Tech is a payments technology solutions provider to banks, financial institutions and MFIs. The announcement was made after market hours on Friday, 29 July 2016.
Stocks of oil exploration and production (E&P) firms declined. Cairn India (down 0.79%) and ONGC (down 0.5%) edged lower. Oil India (up 0.6%) edged higher.
Index heavyweight Reliance Industries was down 0.61% at Rs 1,009.30.
In the global commodities markets, Brent for October settlement was currently down 68 cents at $42.85 a barrel. The contract had risen 30 cents or 0.69% to settle at $43.53 a barrel during the previous trading session.
Index heavyweight and software major Infosys was up 1.03% at Rs 1,085.
Maruti Suzuki India rose 2.41% to Rs 4,869.80 after the company reported 12.7% growth in total sales to 1.37 lakh units in July 2016 over July 2015. Maruti's domestic sales rose 13.9% to 1.25 lakh units in July 2016 over July 2015. This is the company's record monthly sales in the domestic market. The company's exports rose 0.3% to 11,338 units in July 2016 over July 2015. The announcement was made during market hours today, 1 August 2016.
Mahindra & Mahindra (M&M) rose 0.55% to Rs 1,475 after the company reported 14% growth each in its total tractor sales and total automobile sales in July 2016 over July 2015. M&M reported 14% increase in its total tractor sales at 17,553 units in July 2016 over July 2015. Domestic tractor 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.
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. 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. Total auto exports rose 16% to 4,153 units in July 2016 over July 2015.
Shares of Advanced Enzyme Technologies (AETL) settled at Rs 1,178.30 on BSE, a premium of 31.51% over the initial public offer (IPO) price of Rs 896 on its debut on the bourses today, 1 August 2016. The stock debuted at Rs 1,210, a premium of 35.04% over IPO price. The stock hit a high of Rs 1,242.75 and low of Rs 1,168.55 in intraday trade. On BSE, 11.57 lakh shares changed hands in the counter.
AETL had priced its IPO at Rs 896 per share -- the top end of the Rs 880-896 per share price band for the IPO. The IPO had received a strong response from investors and the issue was heavily oversubscribed. The IPO of AETL was a combination of a fresh issue of shares and offer from promoter group selling shareholders, investor group selling shareholders and other selling shareholders.
The Sensex and the Nifty declined for the second straight trading session. The Sensex has declined 205.50 points or 0.72% in two trading sessions from its close of 28,208.62 on 28 July 2016. The Sensex has risen 1,885.58 points or 7.21% in calendar year 2016 so far (till 1 August 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 5,508.51 points or 24.48%. The Sensex is off 414.47 points or 1.45% from a 52-week high of 28,417.59 hit on 10 August 2015. The Sensex is off 2,021.62 points or 6.73% from a record high of 30,024.74 hit on 4 March 2015.
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 current fiscal year ending 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 Bharatiya Janata Party (BJP) today, 1 August 2016, issued a whip to its 53 members in the upper house, wherein they will have to be present in the house for the next three days. The whip is significant as the BJP-led National Democratic Alliance (NDA) is hopeful that the Goods and Services Tax (GST) bill will be tabled in Rajya Sabha this week and it will be taken up for discussion and passage. 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 had 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.
The India Meteorological Department (IMD) said in its forecast for the rainfall during the second half of monsoon season today, 1 August 2016 that rainfall over the country as a whole during second half of southwest monsoon season from August to September is most likely to be above normal i.e. more than 106% of long period average (LPA) with a probability of 55%. Quantitatively, the rainfall for the country as a whole during second half of the season is likely to be 107% of LPA with a model error of 8%. The rainfall during August is likely to be 104 9% of LPA as was forecasted in June. The rainfall during monsoon season from June to September over the country as a whole is likely to be 106% 4% of LPA as was forecasted in June. The quantum of the rainfall and its spatial and temporal distribution are critical for the country's agriculture. Around 70% of the country's farmlands are rain-fed.
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