Post Session: Quick Review

Buying activity which remained buoyant throughout the session, as investors continued piling up hefty positions almost across the counters and as rate hike jitters faded. Indian equity benchmarks made a gap-up opening after Reserve Bank of India in its latest report stated that the near-term growth outlook for India seems brighter than last fiscal and the economy is likely to expand at 7.6 percent in 2016-17. It stated that a better than anticipated agricultural performance and the possibility of allowances under the 7th Pay Commission’s award being paid out in the fourth quarter of 2016-17 provided upsides to this projection. Meanwhile, Niti Aayog Vice-Chairman Arvind Panagariya added that India’s economy will accelerate to 8% growth in the current financial year thanks to a good monsoon, policy reforms and PM Narendra Modi’s focus on implementation at the grassroots’ level. He also expects private investment doing better this year. Additional buying was witnessed after Indian rupee gained against the US dollar at the Interbank Foreign Exchange (forex) market following selling of the American currency by banks and exporters amid firm domestic and global cues. Global liquidity is one factor driving up the market higher. So far this year, FPIs have invested Rs 39,905 crore in equities while they withdrew Rs 7,450 crore from the debt market. This resulted in a net flow of Rs 32,455 crore.

On the global front, Asian shares ended mostly under pressure, with Japanese shares edged down in a muted reaction. Japanese household spending fell less than expected in July and the jobless rate hit a two-decade low, offering some hope for policymakers battling to pull the world's third-largest economy out of stagnation. European markets were up despite a raft of data indicating the euro zone economy is feeling a pinch in the post-Brexit vote climate.

Back home, the benchmarks continued its firm trade on account of fresh round of buying by foreign as well as domestic financial institutions. Buying was witnessed in banking counter for second day in a row with Union Minister Nirmala Sitharaman defending her demand for 2% cut in interest rates by RBI, saying it is essential to boost SMEs and create jobs. Commerce and Industry Minister Nirmala Sitharaman has pitched for as much as 200 basis points interest rate cut by Reserve Bank of India (RBI) to boost Small and Medium Enterprises (SMEs) and create jobs.

The BSE Sensex ended at 28350.32, up by 447.66 points or 1.60% after trading in a range of 28010.66 and 28478.02. There were 29 stocks advancing against 1 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.76%, while Small cap index was up by 0.97%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 1.83%, IT up by 1.77%, Bankex up by 1.48%, FMCG up by 1.40% and PSU up by 1.32%. (Provisional)

The top gainers on the Sensex were Bajaj Auto up by 3.09%, Asian Paints up by 2.95%, Maruti Suzuki up by 2.85%, GAIL India up by 2.69% and HDFC Bank up by 2.56%. (Provisional)

On the flip side, Bharti Airtel down by 2.84% were the top losers. (Provisional)

Meanwhile, pointing to the various benefits of the Goods and Services Tax (GST), the Central Board of Excise and Customs (CBEC), a part of department of revenue has said that GST will make consumer goods cheaper, increase consumption and generate more employment by enhancing economic activity. Further it said that exemption for a majority of small retailers will make products cheaper for consumers.

GST will replace more than a dozen levies of center and state, including central excise, service tax and sales tax as well as VAT, to make movement of goods seamless. Under the new GST set-up, goods will be taxed at the point of consumption, instead of the goods being taxed multiple times. And it will eliminate double taxation on certain sectors like works contracts, software and hospitality, among others. CBEC has said that average tax burden on supplies of goods and services are likely to come down leading to more consumption.

CBEC further said that GST will integrate taxes, unleash growth, create a national market and ease compliance. On advantage for the trade and industry, it will also reduce compliance cost as the assesses will not have to maintain multiple records for a variety of taxes. The new tax regime will be simpler with a few exemptions and result in increased economic activity and generate more job opportunities. It also said that GST will create a unified common national market for India, giving a boost to foreign investment and Make in India campaign.

The CNX Nifty ended at 8745.10, up by 137.65 points or 1.60% after trading in a range of 8642.25 and 8750.60. There were 47 stocks advancing against 4 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ambuja Cement up by 3.97%, Bosch up by 3.94%, Grasim Industries up by 3.55%, ACC up by 3.50% and Eicher Motors up by 3.24%. (Provisional)

On the flip side, Bharti Airtel down by 3.09%, Idea Cellular down by 0.64%, Zee Entertainment down by 0.30% and BHEL down by 0.18% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 8.28 points or 0.12% to 6,846.33, France’s CAC increased 38.9 points or 0.88% to 4,463.15 and Germany’s DAX increased 108.02 points or 1.02% to 10,652.46.

The Asian markets ended mostly in red on Tuesday, with some indices paring the early gains after they rose in morning on a firm lead from Wall Street and higher commodity prices. Japanese market coming off a strong surge of last session, ended modestly in red, as the yen's retreat halted owing to better-than-expected economic data and increased doubts over U.S. rate hike this year. Meanwhile, the Japanese household spending fell less than expected in July, while retail sales fell by the smallest margin in five months. The Chinese market however managed a positive close supported by rebound in banks, while Hong Kong market surged close to a percent.