Post Session: Quick Review

Indian markets after witnessing consolidation in the previous session, succumbed to intensified selling pressure in the final hours on Tuesday that dragged the benchmarks down by around a percent. The early euphoria that was generated by the better than expected numbers of IT bellwether Infosys got lost by the end of the session. Markets reacted more to the Parliament session and less to Infosys earnings, with the start of the monsoon session of Parliament, where fate of key legislations such as land bill, implementation of goods and services tax and the real estate bill will be decided. Disruptions marred the proceedings and Rajya Sabha was adjourned thrice on the very first day and Union finance minister Arun Jaitley said the opposition does not want to let the monsoon session of Parliament run. The development weighed on the sentiments and the Sensex and Nifty started edging lower from the very noon deals on apprehensuion that key bills may not be passed in this session of the parliament.

On the global front, while the US markets made a flat closing, the Asian markets ended mostly in green, with Japanese market surging by around a percent on weaker yen and gains in consumer shares. The Shanghai Composite too climbed for a fourth straight day. The European markets made a cautious but positive start on mixed set of earnings from the region. Meanwhile, Greece met a deadline to pay some 6.8 billion euros ($7.4 billion) to creditors Monday, as depositors queued at reopened banks in the first signs of normality after last week’s bailout deal.

Back home, the early momentum in the markets was built by the India's second largest software firm Infosys reporting a net profit of Rs 3,030 crore for first quarter of this fiscal, registering a 5 per cent increase compared to Rs 2886 crore for the same quarter in the previous year. It reported robust revenue growth beating estimates, driven mainly by strong spending from top clients, and maintained its annual revenue guidance of 10-12%. However, traders remained concerned about the yearly SBI Composite Index, an indicator for manufacturing activity in the country, declining sharply to 49.7 in July from 53.2 in June 2015, its lowest level since October 2014. It was result heavy day and traders reacted to different heavyweights earnings announcements, the banking sector was one of the major loser, though largest private sector bank HDFC Bank  reported better than expected numbers with a rise of 21 per cent in net profit standing at Rs 2,696 crore. The total income of the bank rose 26.25 per cent to Rs 16,502.97 crore. Pharma sector too remained under pressure after Sun Pharmaceutical Industries warned that the measures undertaken to integrate Ranbaxy have a bearing on its revenues and profits in the current financial year. For the full year ending 2014-15, Sun Pharma had reported consolidated net sales of Rs 27,286 crore on total net profit of Rs 4,541 crore. Sun Phama shares ended lower by around 15%. On the other hand shares of Bharti Airtel hit a six-year high after the company said it has entered into exclusive talks with France’s Orange to sell its subsidiaries in Africa. On the sectoral front, selling pressure was most visible in pharma, realty, oil & gas and banking stocks. On the other hand, IT and tech sectors’ witnessed some buying interest.

The BSE Sensex ended at 28182.14, down by 237.98 points or 0.84% after trading in a range of 28138.30 and 28518.06. There were just 7 stocks in green against 23 stocks in red on the index. (Provisional)

The broader indices suffered sharper cuts than the benchmarks; the BSE Mid cap index lost 1.42%, while Small cap index slumped by1.59%. (Provisional)

The two gaining sectoral indices on the BSE were IT up by 4.57%, TECK up by 3.82%, while Realty down by 2.16%, INFRA down by 1.98%, Oil & Gas down by 1.74%, FMCG down by 1.67%, Bankex down by 1.66% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 11.29%, Bharti Airtel up by 3.62%, Wipro up by 2.04%, Bajaj Auto up by 1.61% and Hero MotoCorp up by 1.10%. On the flip side, Sun Pharma Inds. down by 14.99%, Lupin down by 5.14%, Vedanta down by 4.88%, ONGC down by 3.58% and Tata Steel down by 3.45% were the top losers.(Provisional)

Meanwhile, government in its quest to roll out GST from April 1 next year has given in to one of the major demands from several opposition parties and has agreed to provide compensation to states for any revenue loss for five years. A Parliamentary Committee, which scrutinised the crucial GST Bill, has prepared a draft report, the report will be considered by the Select Committee of Rajya Sabha when it is expected to be adopted for presentation in Parliament. As per the schedule, the report is to be submitted to Rajya Sabha by July 24, three days after the commencement of the Monsoon Session of Parliament.

The amendment relates to Clause 19 of the Bill, amended version of which now reads as: “Parliament may, by law, on recommendation of the GST Council, provide for compensation to the states for loss of revenue arising on account of implementation of GST for a period of five years.” The earlier version said the compensation would be paid for “up to five years.” Although, the government argued that both words, according to the Constitution, meant the same thing.

The panel completed the consultation process last week when clause-by-clause discussion took place on the bill now the government will move an official amendment to the GST bill.The GST Bill has been passed by Lok Sabha and was referred to the Select Committee by Rajya Sabha.

The government is making all efforts to implement a single GST rate, which would subsume central excise, service tax and other local levies, from April 1, 2016. The three legislations - Central GST (CGST), State GST (SGST) and integrated GST (iGST) - will have to be approved by the respective legislatures. For the rollout of GST, the CBEC is already preparing model legislations, which will be put up for comments from stakeholders after Parliament approves GST Constitution Amendment Bill.

The CNX Nifty ended at 8531.90, down by 71.55 points or 0.83% after trading in a range of 8517.90 and 8646.75. There were 10 stocks on gainers side against 40 stocks decliners’ side on the index. (Provisional)

The top gainers on Nifty were Infosys up by 11.50%, Bharti Airtel up by 3.62%, HCL Tech. up by 2.57%, Zee Entertainment up by 2.21% and Wipro up by 1.66%. On the flip side, Sun Pharma Inds. down by 15.04%, Lupin down by 5.05%, Vedanta down by 4.96%, Asian Paints down by 4.36% and Ultratech Cement down by 4.14% were the top losers. (Provisional)

European Markets were trading modestly in green, France’s CAC was up by 7.89 points or 0.15% to 5,150.38, Germany’s DAX gained 9.64 points or 0.08% to 11,745.36, UK’s FTSE 100 was lower by 1.62 points or 0.02% to 6,787.07.

Asian markets closed mostly in green on Tuesday, while Indonesia stock exchange was closed on account of ‘National Leave’ holiday. The Bank of Japan board was largely in agreement that prices will rise in the longer term, according to minutes of the June monetary policy meeting released, though one member stated that it would show up moderately in consumer inflation. However, other members notified that the impact of the quantitative easing to buy 80 trillion yen of mostly government bonds annually has had a big impact on the economy and higher prices are spreading and are also driven by higher wages. Board member Takahide Kiuchi has been the lone dissenter in recent reviews by the nine-member board, calling for the easing program to be scaled back to 45 trillion yen. Foreign investment into China rose 8% in the first half of this year as mergers and acquisitions by overseas companies more than quadrupled in value. Foreign direct investment (FDI), which excludes financial sectors, totaled $68.41 billion during the January-June period.  Thailand Governor Prasarn Triratvorakul stated that the Bank of Thailand has no target for the Thai baht but is pleased to see that it has weakened since April and is moving more in line with regional currencies. Thailand’s interest rates are near a record low after two surprise cuts this year. But lower rates have done little for the Thai economy as consumers, struggling to pay off record household debt, keep their money in their pockets.