Post Session: Quick Review

Erasing all their losses, Indian equity markets ended the session with a gain of around two tenth of a percent ahead of GST. The countdown for launch of GST at midnight has begun as the country braces for one nation, one tax. The equity benchmarks made a soft start and traded in red in early deals after Asian Development Bank (ADB) said that implementation of Goods and Services Tax (GST) will remain a challenge for the government. GST has been very important achievement of the Indian government and it will integrate the country into one market, while expressing apprehension that implementation would be an important challenge. There can be some transitional issues like filing of returns and its scrutiny; another issue might be that of enforcement by state and central government tax officials. Buying crept in after the Industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) said that the rollout of new tax regime will bring about significant gains to Indian economy and advantages for the stakeholders. FICCI also looks forward to working closely with the government to ensure successful implementation of GST. The Industry body has clarified that GST will bring down the tax burden of taxpayers in understanding and complying with tax laws and help curb black money generation.

On the global front, Asian markets closed mostly in red. The Korean won weakened against the dollar after the country reported industrial production rose by 0.2 percent in May from a month earlier, missing expectations for growth of 1.5 percent. That followed a 2.2 percent decline in April. Chinese Manufacturing PMI rose to an annual rate of 51.7, from 51.2 in the preceding month. European shares were trading mostly in green but were set to end June with their biggest monthly loss in a year as worries over tightening monetary conditions soured the mood.

Back home, telecom stocks closed mixed on ICRA’s report that intense competition and pricing pressure will continue to take a toll on the telecom sector with industry revenue expected to plunge by another 6 per cent during the current financial year. Mixed reaction was witnessed in real estate stocks after the government on Thursday hiked the GST rate for the construction sector to 18 per cent from 12 per cent, but removed land value from computation of tax liability.

The BSE Sensex ended at 30924.68, up by 67.16 points or 0.22% after trading in a range of 30680.66 and 30965.45. There were 15 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.70%, while Small cap index was up by 0.71%.  (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.40%, FMCG up by 2.18%, Healthcare up by 1.56%, Basic Materials up by 0.62% and IT up by 0.57%, while Realty down by 0.55%, Telecom down by 0.51%, Energy down by 0.42%, Auto down by 0.34% and Metal down by 0.18% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 3.73%, Sun Pharma up by 3.01%, Cipla up by 1.95%, Tata Steel up by 1.68% and Dr. Reddy’s Lab up by 1.49%.  (Provisional)

On the flip side, Tata Motors - DVR down by 1.97%, HDFC down by 1.23%, ICICI Bank down by 1.09%, Reliance Industries down by 0.78% and Bajaj Auto down by 0.76% were the top losers. (Provisional)

Meanwhile, in order to improve the investment climate of the country, the government will clear all foreign direct investment (FDI) proposals within a maximum of 10 weeks after the receipt of an application as per the Standard Operation Procedure (SOP) released by the Department of Industrial Policy and Promotion (DIPP). The newly formulated SOP will replace the 25-year old foreign investment advisory body- the Foreign Investment Promotion Board (FIPB) which has been abolished by the government.

As per the SOP guidelines, proposals not requiring security clearance will be cleared in eight weeks, while applications that require security nod would take a cumulative time period of ten weeks. Besides, DIPP will get an additional time of two weeks for consideration of the proposals proposed for rejection or where additional conditions which are not provided in the FDI policy are proposed to be imposed by the competent authority.

Furthermore, the FDI proposals requiring government’s nod need to be scrutinized by the concerned ministries or departments and such proposals will be filed online on the revamped FIPB portal which has been renamed as Foreign Investment Facilitation Portal (FIFP). FDI applications which require security clearances include investments in broadcasting, telecommunication, satellites, private security agencies, defence, civil aviation and mining & mineral separation of titanium bearing minerals and ores.

The CNX Nifty ended at 9523.40, up by 19.30 points or 0.20% after trading in a range of 9448.75 and 9535.80. There were 22 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bank of Baroda up by 4.08%, ITC up by 3.98%, Sun Pharma up by 3.46%, Cipla up by 2.62% and BPCL up by 2.09%.  (Provisional)

On the flip side, Tata Motors - DVR down by 1.60%, Indiabulls Housing down by 1.56%, Tech Mahindra down by 1.50%, Eicher Motors down by 1.25% and Tata Power down by 1.16% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 1.09 points or 0.01% to 7,351.41, Germany’s DAX increased 26.64 points or 0.21% to 12,442.83 and France’s CAC increased 22.65 points or 0.44% to 5,177.00.

Asian equity markets ended mostly in red on Friday due to heavy selling pressure as broad declines on Wall Street and in Europe overnight overshadowed encouraging manufacturing data from China. Japanese shares hit two-week lows, with a stronger yen, weak overnight cues from Wall Street and mixed economic reports weighing on sentiment. While consumer price inflation rose for the fifth straight month in May, consumer spending remained tepid, the jobless rate ticked higher and industrial output slipped back into contraction, adding to underlying risks. However, Chinese shares bucked the weak trend to end a tad higher as official manufacturing and services sector data added to signs of a stabilizing economy. China's official manufacturing PMI rose to 51.7 in June from 51.2 in May, marking the quickest pace of expansion in three months. Non-manufacturing activity also expanded at a faster pace in June, with the PMI coming in at 54.9, up from 54.5 in May. Meanwhile, Indonesian markets remained closed today.