Post Session: Quick Review

Indian equity markets bounced back on Wednesday bucking sluggish global cues, on strong value buying in oil & gas and banking shares, coming out of some poor earnings announcement from select blue chip companies yesterday. Traders got some support with Goods and Services Tax (GST) panel submitting its report to Rajya Sabha, proposing three modifications related to clause 12, 18 and 19. The first modification is regarding 1 percent additional tax on inter-state supply in Clause 18, which the panel has said that may lead to cascading effect on taxes. The panel said the term 'supply' should be clarified and proposed term ‘Band’ be defined within GST limit. The panel has recommended compensation for GST loss for 5 years. There is a strong possibility of passage of the GST Bill during the ongoing monsoon session of Parliament given 'broad consensus' among political parties.

On the global front, the Asian markets following the weakness in US indices made a soft closing and while the Shanghai Composite Index erased earlier declines to extend its gains for the fifth straight session, shares in Hong Kong extended the world’s biggest declines this month. The European markets too made a weak start, extending decline for the second day, with Apple Inc.’s worse-than-forecast results dragging the semiconductor companies lower. Apple’s lower-than-expected iPhone shipments and a sales forecast below estimates hit shares of suppliers.

Back home, the traders remained in euphoric mood for most part of the day, holding the gains despite intermittent mild profit booking at higher levels, but once after gaining momentum there was no looking back and both the major indices posted triple digit rally, with Nifty reclaiming the crucial psychological level of 8600 and ending near the three months closing high. There was some support to the markets, with the government extending the interest subvention scheme to banks to ensure availability of crop loans of up to Rs 3 lakh to farmers at 7 percent per annum. The Union Cabinet, chaired by Prime Minister Narendra Modi, also decided to provide relief to farmers affected by natural calamities, where the interest subvention of 2 percent will continue to be available to banks for the first year on the restructured amount. Back on street, the broader markets too remained in jubilant mood, while most of the sectoral indices ended with good gains. Oil & gas was the major gainer with sector heavyweight Reliance Industries surging over 4%. Strong buying was also seen in banking stocks that had witnessed selling pressure in the previous 3 sessions. The realty sector too kept buzzing, after a unit of the New York-based private equity firm Warburg Pincus, in a biggest deal in India's real estate sector announced to invest $284 million for a minority stake in Piramal Realty, the real estate development arm of Piramal Group. Metal pack that was in somber mood in early deals too recovered, despite decline in base and precious metals in global markets and fear of poor earnings announcements from some of the resource majors.

The BSE Sensex ended at 28492.78, up by 310.64 points or 1.10% after trading in a range of 28070.91 and 28546.42. There were 22 stocks green against 8 stocks in red on the index. (Provisional)

The broader indices too equally participated in the rally; the BSE Mid cap index ended up by 1.36%, while Small cap index gained 0.87%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.43%, Bankex up by 1.42%, PSU up by 1.27%, INFRA up by 1.25%, Auto up by 1.13%, while IT down by 0.45% and TECK down by 0.36% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Reliance Industries up by 4.42%, Mahindra & Mahindra up by 3.38%, Sun Pharma Inds. up by 3.15%, Bajaj Auto up by 3.07% and Hindustan Unilever up by 2.88%. On the flip side, Lupin down by 3.65%, Bharti Airtel down by 1.47%, TCS down by 1.32%, Infosys down by 1.09% and Vedanta down by 0.59% were the top losers. (Provisional)

Meanwhile, amid indication by the Prime Minister Narendra Modi that the government will consider suggestions from the Opposition on the Land Bill, the Joint Parliamentary Panel inspecting the Land Bill has got another extension. The committee which was originally scheduled to submit its report on the first day of the Monsoon session of the parliament had got an extension by a week. Lok Sabha Speaker Sumitra Mahajan said that there is a fresh request to grant some more time and now, the report is expected to be submitted in the first week of August.

Lok Sabha Speaker further stated that she had received a letter from panel Chairman SS Ahluwalia of the BJP seeking another extension till the first week of August as the members wanted to seek certain clarifications from the government on the amendments brought to the 2013 law.

Earlier, Prime Minister had said that “It is time that we move forward on the Land Bill issue, incorporating suggestions from all sides. We should move positively on this issue.” He also said that “We need to see what the Joint Parliamentary Committee report says. If there is a consensus in the Committee, it is good for national interest as well as farmers. If the Committee makes a lot of suggestions and recommendations, we may have to bring in a new Bill.”

The proposed Land Bill, which will be replacing the ‘Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is facing serious resentment from the opposition parties. The government has promulgated the Land ordinance thrice and if it is unable to manage to get the Bill passed in the monsoon session, the ordinance will lapse on September 1.

The CNX Nifty ended at 8631.65, up by 102.20 points or 1.20% after trading in a range of 8498.65 and 8643.90. There were 41 stocks on gainers side against 9 stocks on decliners’ side on the index. (Provisional)

The top gainers on Nifty were Zee Entertainment up by 5.22%, Reliance Industries up by 4.38%, Mahindra & Mahindra up by 3.34%, Sun Pharma Inds. up by 3.34% and Bajaj Auto up by 3.27%. On the flip side, Lupin down by 3.41%, Idea Cellular down by 1.67%, Bharti Airtel down by 1.24%, TCS down by 1.19% and Infosys down by 1.14% were the top losers.(Provisional)

European Markets were trading lower, UK’s FTSE 100 was down by 68.32 points or 1.01% to 6,700.75, Germany’s DAX lost 43.38 points or 0.37% to 11,561.42 and France’s CAC was lower by 18.35 points or 0.36% to 5,088.22.

Asian markets closed mostly in red on Wednesday following a negative lead from Wall Street and Japanese shares dragged by a stronger yen but Shanghai extended its latest rally to a fifth straight day. Japan’s cabinet is expected to approve by Friday the outline of a 2016/17 budget that will not set any cap on spending requests from ministries, reflecting the priority given to growth over fiscal restraint. The outline of the 2016/17 budget will be based on fiscal guidelines mapped out last month that called for limiting rises in general-account spending for the next three years, but stopped short of setting a binding target. Japan’s government lowered its assessment of industrial output in July as auto makers and electronic parts manufacturers curb output to bring down inventories of finished goods. Japan’s All Industries Activity Index fell to a seasonally adjusted -0.5%, from 0.1% in the preceding month. The Philippines will likely miss its export growth target of 8-10 percent this year after shipments contracted in the first five months of 2015. The exports in May fell 17.4 percent from a year earlier which is the steepest drop since September 2011, with total shipments in the first five months falling 5 percent.