Bulls continue to roar on Dalal Street; Sensex jumps 262 points

Bulls continued to hold grip on Indian stock markets in the early noon session with Sensex posting heavy gains of over 200 points as hectic buying activity was seen in Metal, Healthcare and Bankex stocks. Traders took some encouragement with report that India’s services sector activity remained in the growth territory for the second consecutive month in July, as business activity witnessed the strongest growth since October 2016 amid improved demand conditions. The seasonally adjusted Nikkei India Services Business Activity Index rose from 52.6 in June to 54.2 in July. Some support also came with GST Council member, Sushil Modi stating that the reduction in GST tax rates might lead to in ‘better revenues’ in the long term but might lead to revenue shortfall in the next three-four months. Furthermore, traders took note of a report which stated that India plans to put off implementation of retaliatory import duties of $241 million against 29 products from the US by another month-and-a-half as its attempt to avoid a tariff war with the US. Meanwhile, broader markers were outperforming the larger peers and the overall market breadth on BSE was in the favour of advances.

On the global front, Asian markets were trading mixed. Japanese market was trading modestly higher following the most positive cues from Wall Street after Apple topped the $1 trillion market cap and as a weaker yen boosted exporters’ shares. Back home, GST Council member, Sushil Modi said that the Goods and Services Tax Council might replace the 12 per cent and 18 per cent slabs with a 14-15 per cent one. In the scrip specific development, ONGC gained on reporting 58% jump in Q1 net profit.

The BSE Sensex is currently trading at 37427.32, up by 262.16 points or 0.71% after trading in a range of 37319.61 and 37462.58. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.09%, while Small cap index up by 1.02%.

The top gaining sectoral indices on the BSE were Metal up by 1.47%, Healthcare up by 1.29%, Bankex up by 1.12%, Realty up by 1.11% and Basic Materials up by 0.95%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Vedanta up by 3.85%, Yes Bank up by 2.74%, ICICI Bank up by 2.30%, Axis Bank up by 1.83% and Coal India up by 1.46%. On the flip side, Asian Paints down by 0.38%, Wipro down by 0.38%, Hero MotoCorp down by 0.23%, Indusind Bank down by 0.20% and HDFC Bank down by 0.06% were the top losers.

Meanwhile, Industry body Associated Chambers of Commerce and Industry of India (ASSOCHAM) has warned that over-reach and over-regulation of the e-commerce sector could stifle the growth of entrepreneurship. It also cautioned that no micro managing of prices or other business practices should be encouraged or else it could lead to inspector-raj in the cyber and online world as well.

The industry chamber has stated that an initial draft circulated among stakeholders for discussion to frame a national e-commerce policy has suggested to introduce a pre-set timeframe for offering differential pricing or deep discounts by e-commerce players to customers. It also noted that the suggestions are part of the strategy to address anti-competitive issues in the e-commerce sector effectively. It pointed out that the restriction imposed on e-commerce marketplace, to not directly or indirectly influence the price of goods and services, would be extended to group companies of the e-commerce marketplace.

ASSOCHAM further said that deep discount or no discount is a commercial decision as long as it is not resorted to in sectors like banking, insurance or other highly sensitive sectors, the decision should be purely commercial. It also said that the deep discount and cash burning should be the prime concern of the promoters, venture capitalists and private equity funds betting on online entrepreneurs. It added that eventually, those with sound business models would survive; there would be churning, which has already started.

The CNX Nifty is currently trading at 11327.10, up by 82.40 points or 0.73% after trading in a range of 11294.55 and 11336.15. There were 39 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 5.12%, Vedanta up by 3.95%, Yes Bank up by 2.87%, Dr. Reddys Lab up by 2.13% and Lupin up by 2.09%. On the flip side, Tech Mahindra down by 1.61%, Asian Paints down by 0.51%, Wipro down by 0.41%, Hero MotoCorp down by 0.34% and HDFC Bank down by 0.19% were the top losers.

Asian markets were trading mixed; Jakarta Composite decreased 12.88 points or 0.21% to 5,998.84, Straits Times slipped 6.80 points or 0.21% to 3,279.52, Hang Seng declined 27.75 points or 0.1% to 27,686.81 and Shanghai Composite was down 11.23 points or 0.41% to 2,756.79.

On the other hand, Taiwan Weighted increased 82.66 points or 0.75% to 11,012.43, KOSPI surged 17.03 points or 0.74% to 2,287.23 and Nikkei 225 was up 12.65 points or 0.06% to 22,525.18.