A bout of volatility was witnessed in morning trade as key benchmark indices trimmed losses after extending initial losses and hitting fresh intraday low. At 10:20 IST, the barometer index, the S&P BSE Sensex was down 125.26 points or 0.45% at 27,856.45. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty was currently down 30.80 points or 0.36% at 8,592.10. The Sensex and the Nifty, both, hit their lowest level in more than a week in morning trade. Weakness in Asian stocks weighed on sentiment.The Sensex fell 221.43 points or 0.79% at the day’s low of 27,760.28 in morning trade, its lowest level since 25 July 2016. The barometer index rose 33.72 points or 0.12% at the day’s high of 28,015.43 at the onset of trading session. The Nifty declined 58.60 points or 0.67% at the day’s low of 8,564.30 in morning trade, its lowest level since 25 July 2016. The index rose 12.55 points or 0.14% at the day’s high of 8,635.45 at the onset of trading session.In overseas stock markets, Asian markets slipped after US stocks took their biggest loss in almost a month yesterday, 2 August 2016, underscoring simmering worries about global economic growth. Meanwhile, growth in China’s services sector cooled in July, a private survey showed today, 3 August 2016. The Caixin/Markit services purchasing managers’ index (PMI) fell to 51.7 in July on a seasonally adjusted basis, from an 11-month peak of 52.7 in June. US stocks fell yesterday, 2 August 2016 on the back of disappointing auto sales and a steep drop for retailers on forecasts of poor summer sales, after a similar drop on Asian and European markets.Closer home, the broad market depicted weakness. There were almost two losers against every gainer on BSE. 1,286 shares fell and 662 shares rose. A total of 85 shares were unchanged. The BSE Mid-Cap index was currently down 0.39%. The BSE Small-Cap index was currently down 0.35%. The decline in both these indices was lower than the Sensex’s decline in percentage terms.Realty stocks declined. Sobha (down 0.14%), Indiabulls Real Estate (down 1.84%), Unitech (down 0.71%), Oberoi Realty (down 0.12%), NBCC (down 1.1%) and Godrej Properties (down 1.1%) edged lower.DLF declined 0.54%. The company announced that credit ratings agency ICRA has upgraded its outlook on the company’s non-convertible debentures (NCD) and bank facilities to stable from negative. The rating agency has also re-affirmed its long term rating of ICRA A assigned to the company’s NCD programme and bank facilities. The announcement was made after market hours yesterday, 2 August 2016.The BSE Realty index had underperformed the market over the past one month till 2 August 2016, rising 2.74% compared with 3.08% rise in the Sensex. The index had, however, outperformed the market in past one quarter, rising 17.51% as against Sensex’s 10% rise.Shares of power generation and power distribution companies edged lower. GVK Power & Infrastructure (down 0.16%), NTPC (down 0.97%), Adani Power (down 0.93%), Power Grid Corporation of India (down 2.32%), and Reliance Power (down 0.67%) declined. Tata Power Company rose 0.42%. Reliance Infrastructure gained 0.35%.The BSE Power index had underperformed the market over the past one month till 2 August 2016, rising 2.44% compared with 3.08% rise in the Sensex. The index had, however, outperformed the market in past one quarter, rising 11.33% as against Sensex’s 10% rise.Torrent Power fell 1.43% after consolidated net profit declined 79.56% to Rs 45.62 crore on 13.28% decline in net sales to Rs 2534.10 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 2 August 2016. The company’s consolidated earnings before depreciation, interest and tax (EBDIT) fell 33.45% to Rs 562.78 crore in Q1 June 2016 over Q1 June 2015.NHPC slipped 0.97%. The company announced that the Unit 4 of Teesta Low Dam Project-IV (160 MW) project has been successfully spun at its full RPM on 1 August 2016. The announcement hit the market at the fag end of trading session yesterday, 2 August 2016.EIH fell 3.49% after the company reported net loss of Rs 12.24 crore in Q1 June 2016 as against net profit of Rs 21.15 crore in Q1 June 2015. The result was announced after market hours yesterday, 2 August 2016. EIH’s net sales declined 8.39% to Rs 273.64 crore in Q1 June 2016 over Q1 June 2015.Meanwhile, investors are awaiting the progress on the Goods and Services Tax (GST) constitutional amendment bill in parliament. According to reports, the long-pending GST Bill is listed for consideration and passage in Rajya Sabha today, 3 August 2016 amidst strong indications that the most far-reaching taxation reform would be supported by Congress and all other major political parties. The government is keen to get the GST Bill approved during the Monsoon Session of Parliament ending on 12 August 2016.
The GST bill, which has been approved by the Lok Sabha, is pending in the Rajya Sabha because of opposition to the bill in its current form by the Congress party. A constitutional amendment bill requires at least 50% attendance and support of two-third of those present and voting in the house. For the GST bill to become a law, the bill also needs to be approved by half the state assemblies after its passage in the parliament. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. The GST seeks to create a seamless national market in the country by replacing plethora of state taxes and central taxes by one tax.
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