Benchmarks trade in green ahead of Reliance AGM

Indian equity benchmarks continued their firm trade in morning session on account of buying in frontline blue chip counters like Reliance Industries and Wipro on reporting solid Q1 earnings. The rupee opened higher against dollar on account of selling of American currency by banks and exporters.  Foreign Portfolio Investors stood net buyers in domestic equity markets on Thursday and bought shares worth Rs 1,016.88 crore with gross purchases and gross sales of Rs 6,580.42 crore and Rs 5,563.54 crore, respectively. Traders took support on upbeat earnings from market heavyweight Reliance Industries which reported a consolidated quarterly net profit increase of 28%, helped by higher-than-expected refining and petrochemicals margins and a one-time gain. Net profit rose to Rs 9,079 crore in the quarter ended June from Rs 7,077 crore a year earlier. Revenue rose to Rs 92,661 crore, an increase of 25.5% from Rs 73,829 crore a year ago. Gross refining margin (GRM), or what the company earns from turning every barrel of crude oil into fuel, came in higher than expected at $11.9 per barrel. Wipro’s Q1FY18 IT services revenue, at $1,972 million (up 0.9 percent QoQ), surpassed the estimate, while adjusted EBIT margin at 16% was bang in line. The cement counter was buzzing with ICRA’s report which highlighted that India’s cement demand growth is expected to recover to around 5% during FY18, driven by a pick-up in the infrastructure and housing segments. In FY2017, there was a decline of 1.2% in demand. Investors are eyeing the much awaited 40th Annual General Meeting of Reliance Industries that is scheduled to begin at 11 am. The key focus in the Reliance’s AGM will be Jio followed by petrochemical and refining businesses.

Traders were seen piling up position in Energy, IT and TECK stocks, while selling was witnessed in Telecom, Realty and Healthcare sector stocks. In scrip specific development, Balaji Telefilms was trading in green trade after Mukesh Ambani-led Reliance Industries bought 24.9% stake in the media company for Rs 413.28 crore. InterGlobe Aviation, the country’s largest carrier in terms of market share, was trading under pressure after it said that it will dilute promoter stake to comply with regulatory norms. The board will meet on July 31 to consider it. Select stocks from road and logistics sector were trading in green as the government approved a plan to build 34 mega multi-modal logistics parks at an investment of Rs 2 lakh crore. The projects, for which land is already available with state governments, will be taken up through public-private-partnerships.

On the global front, Asian shares were trading mostly in red, taking a breather from recent climbs. Hong Kong’s Hang Seng Index was down, with shares still hovering near highs not seen in two years. The market opened on an upbeat note Friday but retreated shortly after on profit taking. Hong Kong has risen for the last nine days. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 32,000 and 9,900 levels respectively. The market breadth on BSE was positive in the ratio of 1284:882, while 110 scrips remained unchanged.

The BSE Sensex is currently trading at 32037.23, up by 132.83 points or 0.42% after trading in a range of 31931.34 and 32062.23. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.19%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Energy up by 1.96%, IT up by 1.51%, TECK up by 1.12%, Oil & Gas up by 0.90% and Consumer Durables up by 0.86%, while Telecom down by 0.83%, Realty down by 0.42%, Healthcare down by 0.37%, Power down by 0.12% and Metal down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 7.19%, Reliance Industries up by 3.31%, Coal India up by 2.00%, Infosys up by 1.21% and TCS up by 1.13%.

On the flip side, Lupin down by 2.57%, Bharti Airtel down by 2.08%, Cipla down by 1.43%, Power Grid down by 1.14% and Tata Steel down by 0.62% were the top losers.

Meanwhile, raising concern over the complex formats for the cash bills under the new Goods and Services Tax (GST) regime, the Retailers Association of India (RAI) has appealed to the finance minister to simplify the prescribed sale invoice format for cash bills rendered to customers claiming it is “confusing”. In a appeal to FM it said that there are some aspects of GST regime, which are causing a lot of challenges in business to consumer (B2C) at retail point of sale.

The association requested that retailers be allowed to issue retail cash memo which has details of all articles sold and net price including GST realised for each article. It further said that the need for individual item tax details and HS codes can be done away with for all intra-state retail sales (B2C), this exemption would be required for all retailers without any cap on sales turnover.

The GST rules define that it is mandatory to mention GST rates and HS code for each article sold and provide tax details for each line item. The retailer body has suggested that the GST format follow the globally retail cash memos, which are presented at prices inclusive of all taxes and tax breakups are not shown. They also raised the fact that customers perceive they are being charged higher prices when they are shown a backward calculation of tax.

The CNX Nifty is currently trading at 9911.35, up by 38.05 points or 0.39% after trading in a range of 9878.80 and 9919.85. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Wipro up by 7.11%, Reliance Industries up by 3.28%, Coal India up by 2.23%, HCL Tech up by 1.82% and Zee Entertainment up by 1.33%.

On the flip side, Lupin down by 2.53%, Bharti Airtel down by 2.04%, Cipla down by 1.54%, Power Grid down by 1.01% and Indiabulls Housing down by 0.99% were the top losers.

The Asian markets were trading mostly in red; Taiwan Weighted decreased 52.08 points or 0.5% to 10,447.28, Nikkei 225 decreased 35.73 points or 0.18% to 20,108.86, Hang Seng decreased 34.43 points or 0.13% to 26,705.78, Jakarta Composite decreased 31.64 points or 0.54% to 5,793.57, Shanghai Composite decreased 6.7 points or 0.21% to 3,238.17 and FTSE Bursa Malaysia KLCI decreased 2.06 points or 0.12% to 1,753.57.

On the other hand, KOSPI Index increased 4.22 points or 0.17% to 2,446.06.