Key equity benchmarks extended losses and hit fresh intraday low in the afternoon trade. At 13:26 IST, the barometer index, the S&P BSE Sensex, was down 643.65 points or 1.63% at 38,869.74. The Nifty 50 index was down 203.60 points or 1.72% at 11,607.55.
Weak global cues spoiled investors sentiment. Global shares tumbled as hopes of steep cuts in interest rates by the US Federal Reserve faded after the world's largest economy posted better-than-expected jobs data Friday.
The India's government's move to increase minimum public shareholding in listed companies also disappointed domestic investors. Finance Minister Nirmala Sitharaman in her maiden Budget speech on Friday, 5 July 2019, urged Sebi to consider increasing the minimum public shareholding in listed firms to 35% from 25%. The proposal is potential negative for MNC and companies with high promoter holding. This proposal could also increase the supply of paper in the market, which would suck money out of secondary market.
As many as 1,037 companies need to dillute promoter holding to bring public shareholding to 35% as proposed by the 2019-20 Union Budget. Of these, 62 companies had market cap of more than Rs 10,000 crore. As many as 320 companies belonged to the finance, textiles, chemicals, auto ancillaries and pharmaceuticals sectors.
Further, in order to discourage the practice of avoiding dividend distribution tax (DDT) through buyback of shares by listed companies, the government proposed that listed companies shall be liable to pay additional tax of 20% in case of buyback of share, as is the case for unlisted companies.
Forty-four companies announced/closed their buybacks after 1 April 2019. Of the Rs 26562.69-crore proposed outgo from companies, investors have received Rs 3033.58 crore.
The S&P BSE Mid-Cap index was down 1.73%. The S&P BSE Small-Cap index was down 2.29%.
The market breadth was weak. On the BSE, 455 shares rose and 1860 shares fell. A total of 136 shares were unchanged.
Realty shares tumbled, with the S&P BSE Realty index falling 3.11%.
Parsvnath Developers (down 10.89%), D B Realty (down 7.71%), Oberoi Realty (down 4.76%), Phoenix Mills (down 4.67%), Housing Development and Infrastructure (HDIL) (down 3.92%), Sunteck Realty (down 3.68%), Anant Raj (down 3.18%), DLF (down 3.02%), Godrej Properties (down 2.86%), Prestige Estates Projects (down 2.3%), Indiabulls Real Estate (down 1.68%), Peninsula Land (down 1.45%), Sobha (down 1.31%), Mahindra Lifespace Developers (down 1.12%) and Unitech (down 0.82%) declined. Omaxe was up 0.03%.
Most pharma stocks witnessed selling. Wockhardt (down 2.58%), Divi's Laboratories (down 1.84%), Cadila Healthcare (down 1.57%), Cipla (down 1.45%), Piramal Enterprises (down 1%), Sun Pharmaceutical Industries (down 0.95%), Aurobindo Pharma (down 0.85%), Strides Shasun (down 0.68%), Dr Reddy's Laboratories (down 0.62%), IPCA Laboratories (down 0.52%) and GlaxoSmithKline Pharmaceuticals (down 0.42%) declined. Glenmark Pharmaceuticals (up 0.61%), Alkem Laboratories (up 0.28%) and Lupin (up 0.22%) advanced.
HDFC Bank was down 2.19%. HDFC Bank before market hours today, 8 July 2019 announced that its advances aggregated to approximately Rs. 829500 crore as of 30 June 2019 as compared to Rs 708600 crore as of 30 June 2018 and Rs 819400 crore as of 31 March 2019. The bank's deposits aggregated to approximately Rs 954500 crore as of 30 June 2019 as compared to Rs. 805800 crore as of 30 June 2018 and Rs 923100 crore as of 31 March 2019. The bank's CASA ratio stood at around 40% as compared to 41.7% as of 30 June 2018 and 42.4% as of 31 March 2019. During the quarter ended 30 June 2019, the bank purchased loans aggregating Rs 7230 crore through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation.
TCS was up 0.54%. The IT major announced during market hours today, 8 July 2019, that it has successfully completed the first phase of implementation of the TCS BaNCS lnsurance Platform as part of a business transformation programme for Scottish Widows, the life and pensions arm of Lloyds Banking Group. TCS entered into a 15-year partnership with Scottish Widows in September 2017 for a core transformation to replace multiple legacy systems with the TCS BaNCS platform.
Yes Bank was up 6.12%. The bank said today, 8 July 2019, that its financial position is sound and stable and its liquidity and operating performance continue to be robust.
Meanwhile, Yes Bank announced the appointment of Rajeev Uberoi as senior group president - governance and controls and Anurag Adlakha as senior group president & head - financial management & strategy.
Hindustan Unilever (HUL) was down 1.75%. HUL said it will consider Q1 June 2019 results on Tuesday, 23rd July, 2019.
Maruti Suzuki India was down 5.14%. The company reduced its production by 15.61% to 1.11 lakh units in June 2019 over June 2018. The announcement was made during trading hours on Friday, 5 July 2019. The stock fell 2.71% to Rs 6,364.75 on Friday.
IndusInd Bank was down 2.15%. IndusInd Bank announced during market hours today, 8 July 2019, that it has launched the IndusInd Bank Celesta American Express Credit Card'. This super premium credit card which offers best-in class rewards and benefits has been created keeping the discerning needs of senior professionals and businessmen who are always on the go.
Overseas, most European stocks opened lower while Asian stocks were trading lower on Monday after a strong jobs report moderated expectations that the US Federal Reserve could soon be making a move on interest rates.
China's foreign exchange reserves expanded slightly to $3.1192 trillion at the end of June, official data showed Monday. The amount increased by $18.2 billion, or 0.6$ from the end of May, according to the State Administration of Foreign Exchange (SAFE).
US stocks closed slightly lower Friday, 5 July 2019, following an unexpectedly strong US payrolls report, reducing the chances of multiple Federal Reserve rate cuts by the end of the year.
On the data front, the US economy added a better-than-expected 224,000 jobs in June, while the unemployment rate ticked up slightly to 3.7% from 3.6%.
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