Post Session: Quick Review

Immense volatility characterized trading whereby benchmark equity indices kept oscillating amid broad range throughout the session but last hour of trade pushed indices higher. Indian equity benchmarks which started the trade on flat note gradually added gains and were trading in green on reports that Odisha becomes the 16th state to ratify the constitutional amendment bill passed by Parliament to introduce the goods and services tax (GST), helping cross the important threshold of more than half the number of states needed for the proposed law to be sent for presidential assent. Chief Economic Adviser Arvind Subramanian stated that India has potential to grow at 8-10%, or even faster, a day after the government reported a 7.1% expansion in April-June GDP, the slowest in five quarters. Union Finance Minister Arun Jaitley said India is protected from all the political and economic challenges that the world is facing and it provides immense opportunity for the country to grow further. The country’s economic growth is better than many of its peers and is in a sweet spot. Some support came in after International Monetary Fund (IMF) in its surveillance note stated that Indian economy is likely to continue to grow strongly, crediting its latest assessment to support from private consumption and saying that the GST will provide a further boost when it is rolled out. There was however anxiety among investors with IMD’s report saying that the country’s cumulative rainfall during this year's monsoon so far (till 31 August 2016) was 3% below the long period average (LPA).

On the global front, Asian shares made mixed closing, while Nikkei stock exchange closed flat as Japan’s economic growth is expected to be revised down slightly to flat over April-June due to a decline in capital expenditure, underscoring the view that any recovery in the current quarter will be modest. European shares rose, but stayed within recent tight ranges as investors waited key US jobs data later in the day for clues about the Federal Reserve’s next interest rate hike.

Back home, mixed reaction were displayed among sugar stocks, since the government imposed stock limits on sugar mills during September and October, 2016 to prevent further rise in sugar prices during upcoming festival season, as retail sugar prices have crossed Rs 40 per kg. This decision will boost availability of sugar in open market and help to control the price rise. This is the first time that the government has imposed limit on the Rs 80,000 crore sugar industry ever since it was partially decontrolled in 2013.

The BSE Sensex ended at 28522.31, up by 98.83 points or 0.35% after trading in a range of 28427.63 and 28581.58. There were 22 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.53%, while Small cap index was up by 0.37%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.03%, Auto up by 0.93%, Bankex up by 0.61%, Power up by 0.56% and Consumer Durables up by 0.55%, while Metal down by 0.42%, IT down by 0.28% and TECK down by 0.04% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 3.61%, Bharti Airtel up by 2.30%, Maruti Suzuki up by 1.92%, Sun Pharma up by 1.55% and Mahindra & Mahindra up by 1.17%. (Provisional)

On the flip side, Coal India down by 1.88%, Reliance Industries down by 1.60%, Infosys down by 0.74%, Hindustan Unilever down by 0.56% and Power Grid Corporation down by 0.49% were the top losers. (Provisional)

Meanwhile, Odisha has become the 16th state to approve the recently passed Constitution (122nd Amendment) Bill, 2014 on GST. This means the Bill has achieved the minimum number of state approvals that is half the total number which is required for the proposed law to be sent for presidential nod.

Not touching the controversial point of capping the tax limit as demanded by the Opposition Congress members, Chief Minister Naveen Patnaik has said that they will soon demand Centre for the imposition of Green Tax along with GST. Also they will request the Centre to take appropriate action for CST compensation to the states up to 2016-17 for reduction of CST from 4 percent to 2 percent.

After successful adoption of the GST bill in the State Assembly, Patnaik has said that all sections will be benefited after the implementation of GST bill as it will reduce the tax burden on several commodities and services. The government will get the benefit of higher revenue efficiency. The business and industry will find it easier to comply with. He added that there are challenges before the state to roll out GST next year as he appealed to all to work together to make GST happen. 

Revenue Secretary Hasmukh Adhia has said that the ratification of the bill has been completed ahead of the schedule. Assam was the first state to ratify the GST Bill. Other states that have approved the bill are Maharashtra, Haryana, Bihar, Jharkhand, Himachal Pradesh, Chhattisgarh, Gujarat, Madhya Pradesh, Delhi, and Nagaland. The bill will now be placed before President Pranab Mukherjee for approval.

The CNX Nifty ended at 8804.70, up by 30.05 points or 0.34% after trading in a range of 8768.20 and 8824.10. There were 34 stocks advancing against 16 stocks declining, while 1 stock remained unchanged on the index. (Provisional)

The top gainers on Nifty were Adani Ports & Special Economic Zone up by 3.71%, Bank of Baroda up by 3.19%, Tata Motors - DVR up by 2.18%, Bharti Airtel up by 2.06% and Maruti Suzuki up by 2.06%. (Provisional)

On the flip side, Coal India down by 1.76%, Reliance Industries down by 1.57%, ACC down by 1.22%, Infosys down by 0.73% and Zee Entertainment down by 0.64% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 48.77 points or 0.72% to 6,794.74 and Germany’s DAX increased 18.33 points or 0.17% to 10,552.64, while France’s CAC increased 32.43 points or 0.73% to 4,472.10.

The Asian markets made a mixed closing on Friday waiting for the American jobs data, which could hint the timing of the next U.S. interest-rate hike. Strong employment report may put the Federal Reserve on track to raise short-term rates this year. South Korea’s central bank raised its estimate of second-quarter economic growth, supporting the currency and the markets. However, the Japanese market ended marginally in red as the yen moved higher for the day. On the other hand the Chinese markets posted modest gains as property developers rebounded from losses in the previous session.