Post Session: Quick Review

Thursday turned out to be a daunting session for the Indian equity indices which got pounded by around three fourth of a percent. After trading listless near the neutral lines for most part of the day, domestic gauges crashed like house of card in the last leg of trade, as caution prevailed ahead of corporate results. Further, investors opted to remain on sidelines awaiting progress on the tax reforms bill. Market participants failed to get any encouragement with government’s hope on support from regional parties that the Rajya Sabha will clear the indirect tax reform in the first week of August.

Investors shrugged off report that the country’s foreign direct investment (FDI) got a big push by the launch of Make in India programme in September 2014 and surged up by 46 per cent during October 2014 and May this year. Also, traders failed to get any sense of relief with the private report indicating inflation in India to fall to 4.5 per cent by next March, giving the Reserve Bank of India (RBI) space to cut key policy rates by 50 basis points in the current fiscal.

Selling get intensified after European markets made a weak start with CAC, DAX and FTSE trading with a cut of around half a percent in early deals. However, Asian markets climbed to nine-month highs on Thursday, helped by a pick-up in capital inflows and a recovery in global oil prices, while the dollar stood strong on growing bets of a US rate increase as early as September.

Back home, continued sulk in software pack also dampened sentiments despite Nasscom, the IT industry body, stating that it didn't see any reason to cut its growth forecast of 10-12 per cent for FY2017 even as big IT firms continued to disappoint in June quarter. The industry body sees no threat to the demand outlook for the industry. Metal stocks too remained under pressure on report that the government under pressure from exporting countries and Indian small scale industries is planning to prune the list of steel products covered by the Minimum Import Price. On the flip side, Pharma shares extended gains on the back of USFDA approval to manufacture and market generic versions of a blockbuster cholesterol drug, Crestor, in the American market.

The NSE’s 50-share broadly followed index -- Nifty -- declined by over fifty points but managed to hold its psychological 8,500 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- dropped by over two hundred points to finish above the psychological 27,800 mark. Broader markets too traded under pressure and ended the session with a cut of around a two tenth of a percent.

The market breadth remained in the favour off decliners, as there were 1,100 shares on the gaining side against 1,584 shares on the losing side while 185 shares remain unchanged. (Provisional)

The BSE Sensex ended at 27710.52, down by 205.37 points or 0.74% after trading in a range of 27687.54 and 27988.76. There were 7 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.19%, while Small cap index down by 0.14%. (Provisional)

The few gaining sectoral indices on the BSE were Telecom up by 0.17%, FMCG up by 0.16% and Oil & Gas up by 0.06%, while Power down by 2.10%, Utilities down by 1.73%, Bankex down by 1.70%, Finance down by 1.02% and Capital Goods down by 1.01% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 1.21%, Adani Ports &Special up by 1.13%, Asian Paints up by 1.12%, Bharti Airtel up by 0.84% and Wipro up by 0.72%. On the flip side, Axis Bank down by 3.62%, Power Grid Corpn. down by 2.98%, SBI down by 2.30%, Dr. Reddys Lab down by 2.15% and ICICI Bank down by 2.13% were the top losers. (Provisional)

Meanwhile, government has raised its concern over poor implementation of the Building and Other Construction Workers' Welfare Cess Act 1996, as the State and Union territories collected Rs 26,962.18 crore as construction cess to be solely spent on workers' welfare comes, but spent only, Rs 5,684.8 crore till March end this year.

The Labour Minister Bandaru Dattatreya has said that the responsibility of collecting cess and its utilization for welfare of workers lies with the respective state governments/UT administrations and state Building and other Construction Workers' Welfare boards and has asked the states to ensure that States Advisory Committees (SACs) under the law meet once every three months. SACs advice states on matters related to administration of legislations that are referred to them. The minister further pointed that “It has been noticed that SACs are not meeting regularly on account of which the implementation of the Act has suffered further.”

The Labour Ministry had directed states/UTs to constitute SACs through an order issued on October 23, as they play very important role in the implementation of the Building and Other Construction workers Act 1996 and Building and Other Construction Workers Welfare Cess Act 1996. Under the Act real estate developers has to pay 1% of the total cost of construction of the building as cess. The cess is levied to augmenting the resources of the Building and Other Construction Workers Welfare Board. The Act provides for regulating the employment and conditions of service of building and other construction workers and also provides for their safety, health and welfare measures and other matters connected therewith or incidental thereto.

The CNX Nifty ended at 8510.10, down by 55.75 points or 0.65% after trading in a range of 8503.45 and 8585.25. There were 15 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were ACC up by 4.68%, Ultratech Cement up by 2.21%, Indusind Bank up by 1.62%, Ambuja Cement up by 1.49% and Asian Paints up by 1.38%. On the flip side, Axis Bank down by 3.62%, Power Grid Corpn. down by 3.47%, Bank Of Baroda down by 3.36%, BHEL down by 2.81% and Kotak Mahindra Bank down by 2.76% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 31.25 points or 0.46% to 6,697.74, Germany’s DAX shed 31.17 points or 0.31% to 10,110.84 and France’s CAC was down by 24.51 points or 0.56% to 4,355.25.

Asian equity markets ended mixed on Thursday. Hong Kong shares closed above 22,000 for the first time this year, joining a regional rally that led many Asian bourses higher. Japanese shares rose to close near their highest level in more than a month, as the yen weakened to the lower 107 yen zone amid reports that the government is arranging to compile a 20 trillion yen ($186 billion) stimulus package, about double its previous plan. Meanwhile, Chinese shares eked out modest gains as investors looked for bargains after three days of losses in the wake of mixed signals on the economic front.