Sensex hits lowest closing level in a week
Key benchmark indices registered small losses in a volatile trading session. The barometer index, the S&P BSE Sensex shed 21.41 points or 0.08% to settle at 27,981.71. The losses for the Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty dropped 13.65 points or 0.16% to settle at 8,622.90.
The Sensex settled below the psychologically important 28,000 level after alternately moving above and below that mark in intraday trade. Losses in metal, telecom stocks and index heavyweight HDFC pulled key indices lower. Weakness in global stocks weighed on sentiment on the domestic bourses. The Sensex hit its lowest closing level in a week. Key indices slipped into the red in mid-afternoon trade after remaining in the positive terrain earlier during the session.
The Sensex and the Nifty declined for the third straight trading session.
Stocks of public sector banks were mostly higher. Stocks of private sector banks were mixed. Tech Mahindra shrugged off weak Q1 June 2016 earnings. Hero MotoCorp edged higher after the company announced a 9.13% growth in its total sales in July 2016. Maruti Suzuki India rose after the company increased prices of select models with effect from 1 August 2016. Bharat Financial Inclusion tumbled following the arrest of the company's President S Dilli Raj by the Enforcement Directorate.
In overseas stock markets, European stocks dropped as bank shares came under pressure. Asian stocks edged lower taking cues from a modestly lower day on Wall Street overnight as US crude oil prices slid. In Japan, the Nikkei 225 Average ended 1.47% lower. According to reports, Japanese Prime Minister Shinzo Abe's cabinet approved 13.5 trillion yen ($132.04 billion) in fiscal measures today, 2 August 2016 as part of efforts to revive the flagging economy, with cash payouts to low-income earners and infrastructure spending. The stimulus spending is part of a renewed government effort to coordinate its policy with the Bank of Japan.
US stocks lost momentum to finish mostly lower yesterday, 1 August 2016 as crude-oil futures returned to bear-market territory and weaker-than-expected manufacturing data raised doubts about the strength of the economy. The ISM manufacturing activity index fell to 52.6 in July, down from 53.2 the previous month.
The Sensex lost 21.41 points or 0.08% to settle at 27,981.71, its lowest closing level since 26 July 2016. The index rose 172.10 points or 0.61% at the day's high of 28,175.22. The index fell 59.21 points or 0.21% at the day's low of 27,943.91.
The Nifty dropped 13.65 points or 0.16% to settle at 8,622.90, its lowest closing level since 27 July 2016. The index rose 50.65 points or 0.58% at the day's high of 8,687.20. The index declined 25.15 points or 0.29% at the day's low of 8,611.40.
The BSE Mid-Cap index lost 0.62%. The BSE Small-Cap index shed 0.83%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was weak. On BSE, 1,767 shares declined and 976 shares rose. A total of 136 shares were unchanged.
The total turnover on BSE amounted to Rs 3711 crore, lower than turnover of Rs 4086.62 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Healthcare index (down 0.8%), the BSE Telecom index (down 1.27%), the BSE Metal index (down 1.78%) and the BSE Realty index (down 1.18%) underperformed the Sensex. The BSE FMCG index (up 1.68%) and the BSE IT index (up 0.06%) outperformed the Sensex.
Index heavyweight and housing finance major HDFC fell 2.37% at Rs 1,341.95. The stock hit a high of Rs 1,374.90 and a low of Rs 1,335.50 in intraday trade.
Stocks of public sector banks were mostly higher. Indian Bank (up 19.97%), Bank of Baroda (up 2.41%), IDBI Bank (up 0.66%), Punjab National Bank (up 0.53%), Union Bank of India (up 0.52%), Bank of India (up 0.18%) and State Bank of India (up 0.18%) rose. Corporation Bank (down 1.46%) and United Bank of India (down 1.55%) edged lower.
Stocks of private sector banks were mixed. Kotak Mahindra Bank (up 0.41%) and Yes Bank (up 0.58%) edged higher. ICICI Bank (down 1.54%), IndusInd Bank (down 0.59%) and Axis Bank (down 0.1%) edged lower.
Index heavyweight HDFC Bank was up 0.2%.
The Reserve Bank of India (RBI) yesterday, 1 August 2016 announced guidelines for ‘on tap' licensing of universal banks in the private sector. Some of the key aspects of the guidelines include: (i) resident individuals and professionals having 10 years of experience in banking and finance at a senior level are also eligible to promote universal banks; (ii) large industrial houses are excluded as eligible entities but are permitted to invest in the banks up to 10%; (iii) Non-Operative Financial Holding Company (NOFHC) has been made non-mandatory in case of promoters being individuals or standalone promoting/converting entities who/which do not have other group entities; (iv) Not less than 51% of the total paid-up equity capital of the NOFHC shall be owned by the promoter/promoter group, instead being wholly owned by the promoter group; and (v) existing specialised activities have been permitted to be continued from a separate entity proposed to be held under the NOFHC subject to prior approval from the central bank and subject to it being ensured that similar activities are not conducted through the bank as well.
Telecom stocks declined. Reliance Communications (down 2.31%), Bharti Airtel (down 1.54%) and Idea Cellular (down 0.14%) edged lower.
Bharti Infratel was off 2.11%. Bharti Infratel is a telecom tower arm of Bharti Airtel.
Metal and mining stocks edged lower. Jindal Steel & Power (down 6.39%), Vedanta (down 5.85%), National Aluminium Company (down 2.97%), Steel Authority of India (down 2.64%), Hindustan Zinc (down 2.06%), NMDC (down 1.32%), Hindustan Copper (down 1.36%), Hindalco Industries (down 1.13%), Tata Steel (down 0.67%) and JSW Steel (down 0.78%) declined.
Copper prices edged higher in global commodies markets. High Grade Copper for September 2016 delivery was currently up 0.57% at $2.212 per pound on the COMEX.
Shares of state-run coal mining giant Coal India fell 0.9% at Rs 323.35 after the company and its subsidiaries achieved 91% of targeted coal production at 36.74 million tonnes in July 2016 on provisional basis. With respect to coal offtake, Coal India and its subsidiaries on a provisional basis achieved 89% of target in July 2016. The total offtake stood at 41.47 million tonnes in July 2016. The company announced the monthly coal production and offtake performance after market hours yesterday, 1 August 2016.
Tech Mahindra rose 1.79% at Rs 498.45 after consolidated net profit fell 12.58% to Rs 750.10 crore on 0.54% increase in revenue to Rs 6920.90 crore in Q1 June 2016 over Q4 March 2016. The result was announced after market hours yesterday, 1 August 2016.
Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 10.59% to Rs 1029.10 crore in Q1 June 2016 over Q4 March 2016. The EBIDTA margin fell sharply to 14.9% in Q1 June 2016 from 16.7% in Q4 March 2016. Commenting on the first quarter results, Vineet Nayyar, Vice Chairman, Tech Mahindra, said that the company had a steady quarter inspite of the seasonal weakness in the mobility business. The management expects improvement of the company's profitability going ahead, Nayyar said.
Commenting on the first quarter results, C P Gurnani, Managing Director & CEO, Tech Mahindra said that the business has done well on several parameters like large client growth, digital wins and strong cash flows. Automation and delivery excellence are two key focus areas for the year going forward, he added.
Sun Pharmaceutical Industries (Sun Pharma) lost 0.76% at Rs 828.75. The company said that one of its subsidiaries received final approval from USFDA for its abbreviated new drug application for generic version of Glumetza tablets. Sun Pharma said that the drug is likely to be commercially launched in the US over the next few weeks. Glumetza tablets are indicated to improve glycemic control in adults with type 2 diabetes mellitus. As per IMS MAT June 2016 data, Glumetza tablets had annual sales of approximately $1.2 billion in the US. The announcement was made during market hours today, 2 August 2016.
Hero MotoCorp rose 1.26% at Rs 3,260 after the company announced that its total sales rose 9.13% to 5.32 lakh units in July 2016 over July 2015. The company announced the monthly sales volume data after market hours yesterday, 1 August 2016.
Hero MotoCorp said that the company continues to dominate the 100 cc and 125 cc motorcycles segments. In the scooter segment, the Maestro Edge and Duet models maintained their growth trajectory in July 2016, Hero MotoCorp said.
In July 2016, Hero MotoCorp commenced retail sales of Splendor iSmart 110 – the first motorcycle to have been completely designed and developed by its in-house Research and development (R&D) at the state-of-the-art Hero Centre of Innovation and Technology in Jaipur. The company said that the initial customer response to the new bike has been positive.
With the above average monsoon and implementation of the seventh pay commission recommendations, the company remains cautiously optimistic about a positive turnaround in the two-wheeler industry in the second half of the year, Hero MotoCorp said in a statement.
Bajaj Auto rose 0.32% at Rs 2,744.25. The company's total sales fell 0.12% to 3.29 lakh units in July 2016 over July 2015. Bajaj Auto's total motorcycles sales rose 1% to 2.85 lakh units in July 2016 over July 2015. Domestic motorcycles sales rose 21% to 1.74 lakh units in July 2016 over July 2015. Motorcycle exports fell 20% to 1.11 lakh units in July 2016 over July 2015.
Sales of commercial vehicles in the domestic market rose 8% to 23,698 units in July 2016 over July 2015. Exports of commercial vehicles fell 21% to 20,608 units in July 2016 over July 2015.
Total sales of motorcycles and commercial vehicles in the domestic market rose 20% to 1.98 lakh units in July 2016 over July 2015. Combined exports of motorcycles and commercial vehicles fell 20% to 1.31 lakh units in July 2016 over July 2015. The company announced the monthly sales volume data during trading hours.
Maruti Suzuki India rose 2.49% at Rs 4,991 after the company increased prices of select models ranging from Rs 1,500 to Rs 5,000 ex-showroom Delhi with effect from 1 August 2016. The announcement was made after market hours yesterday, 1 August 2016. In case of newly launched models like Vitara Brezza and Baleno, the prices are being increased by upto Rs 20,000 and upto Rs 10,000 respectively, MSIL said. This price revision is based on factors like segment wise demand, forex movements and strategic objectives of the company, Maruti Suzuki India (MSIL) said in a statement.
Tata Motors lost 2.8% at Rs 493.85. The company announced that Tata Motors passenger and commercial vehicle sales (including exports) rose 7% to 43,160 vehicles in July 2016 over July 2015. The company's domestic sales of Tata commercial and passenger vehicles rose 8% to 37,789 units in July 2016 over July 2015. The company's sales from exports rose 6% to 5,371 units in July 2016 over July 2015. The announcement was made after market hours yesterday, 1 August 2016.
UltraTech Cement lost 1.25% at Rs 3,708.95. The company announced that it has participated in the auction of coal linkages for captive power plant sub-sector and secured 1.29 lakh tons of coal at a premium of Rs 100 per ton over floor price of Rs 970 per ton from Gevra Road mines in Maharashtra and 1.38 lakh tons of coal at a premium of Rs 125 per ton over floor price of Rs 970 per ton from New Kusmunda (NKCR) mines in Chhattisgarh. A formal communication vesting the linkages in the company's favour is expected in due course. With these auctions, the company has secured in all, coal linkages for 4.09 lakh tons for its plants located at Maharashtra and Chhattisgarh. Both these locations are land locked and this helps the company in mitigating the impact of rising costs of petcoke/imported coal. The company intends to participate in the future linkage auctions for its plants located strategically near the coal mines.
Bharat Financial Inclusion tumbled 9.73% at Rs 822.20 following the arrest of the company's President S Dilli Raj by the Enforcement Directorate. Bharat Financial Inclusion, formerly known as SKS Microfinance, announced after market hours yesterday, 1 August 2016, that its President S Dilli Raj was arrested by the Enforcement Directorate (ED) in connection to a complaint filed by IDBI Bank against First Leasing Company of India. S Dilli Raj previously worked in First Leasing Company of India.
Bharat Financial Inclusion clarified that the investigation does not in any way relate to the company. Dilli Raj had earlier issued a personal statement on 19 October 2015 stating that he had resigned from First Leasing Company of India on 22 November 2007 and was relieved on 18 January 2008. He had stated that all loans taken during his tenure have been repaid by First Leasing and that the complaint filed by IDBI Bank relates to loans sanctioned during the years 2012 and 2013, which was six years after he ceased to be an employee of First Leasing. Dilli Raj also had clarified that his role was confined to treasury operations and he did not authenticate or sign any financial statements of First Leasing.
The Sensex and the Nifty declined for the third straight trading session. The Sensex has declined 226.91 points or 0.8% in three trading sessions from its close of 28,208.62 on 28 July 2016. The Sensex has risen 1,864.17 points or 7.13% in calendar year 2016 so far (till 2 August 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 5,487.10 points or 24.39%. The Sensex is off 435.88 points or 1.53% from a 52-week high of 28,417.59 hit on 10 August 2015. The Sensex is off 2,043.03 points or 6.8% from a record high of 30,024.74 hit on 4 March 2015.
On the macro front, eight core industries comprising nearly 38% of the weight of items included in the Index of Industrial Production (IIP) increased 5.2% in June 2016 over June 2015, compared to 2.8% growth in May 2016 and 3.1% growth in June 2015. Its cumulative growth during the three months period from April to June 2016 was 5.4%. The data was announced after market hours yesterday, 1 August 2016.
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 tomorrow, 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.
The Sensex settled below the psychologically important 28,000 level after alternately moving above and below that mark in intraday trade. Losses in metal, telecom stocks and index heavyweight HDFC pulled key indices lower. Weakness in global stocks weighed on sentiment on the domestic bourses. The Sensex hit its lowest closing level in a week. Key indices slipped into the red in mid-afternoon trade after remaining in the positive terrain earlier during the session.
The Sensex and the Nifty declined for the third straight trading session.
Stocks of public sector banks were mostly higher. Stocks of private sector banks were mixed. Tech Mahindra shrugged off weak Q1 June 2016 earnings. Hero MotoCorp edged higher after the company announced a 9.13% growth in its total sales in July 2016. Maruti Suzuki India rose after the company increased prices of select models with effect from 1 August 2016. Bharat Financial Inclusion tumbled following the arrest of the company's President S Dilli Raj by the Enforcement Directorate.
In overseas stock markets, European stocks dropped as bank shares came under pressure. Asian stocks edged lower taking cues from a modestly lower day on Wall Street overnight as US crude oil prices slid. In Japan, the Nikkei 225 Average ended 1.47% lower. According to reports, Japanese Prime Minister Shinzo Abe's cabinet approved 13.5 trillion yen ($132.04 billion) in fiscal measures today, 2 August 2016 as part of efforts to revive the flagging economy, with cash payouts to low-income earners and infrastructure spending. The stimulus spending is part of a renewed government effort to coordinate its policy with the Bank of Japan.
US stocks lost momentum to finish mostly lower yesterday, 1 August 2016 as crude-oil futures returned to bear-market territory and weaker-than-expected manufacturing data raised doubts about the strength of the economy. The ISM manufacturing activity index fell to 52.6 in July, down from 53.2 the previous month.
The Sensex lost 21.41 points or 0.08% to settle at 27,981.71, its lowest closing level since 26 July 2016. The index rose 172.10 points or 0.61% at the day's high of 28,175.22. The index fell 59.21 points or 0.21% at the day's low of 27,943.91.
The Nifty dropped 13.65 points or 0.16% to settle at 8,622.90, its lowest closing level since 27 July 2016. The index rose 50.65 points or 0.58% at the day's high of 8,687.20. The index declined 25.15 points or 0.29% at the day's low of 8,611.40.
The BSE Mid-Cap index lost 0.62%. The BSE Small-Cap index shed 0.83%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was weak. On BSE, 1,767 shares declined and 976 shares rose. A total of 136 shares were unchanged.
The total turnover on BSE amounted to Rs 3711 crore, lower than turnover of Rs 4086.62 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Healthcare index (down 0.8%), the BSE Telecom index (down 1.27%), the BSE Metal index (down 1.78%) and the BSE Realty index (down 1.18%) underperformed the Sensex. The BSE FMCG index (up 1.68%) and the BSE IT index (up 0.06%) outperformed the Sensex.
Index heavyweight and housing finance major HDFC fell 2.37% at Rs 1,341.95. The stock hit a high of Rs 1,374.90 and a low of Rs 1,335.50 in intraday trade.
Stocks of public sector banks were mostly higher. Indian Bank (up 19.97%), Bank of Baroda (up 2.41%), IDBI Bank (up 0.66%), Punjab National Bank (up 0.53%), Union Bank of India (up 0.52%), Bank of India (up 0.18%) and State Bank of India (up 0.18%) rose. Corporation Bank (down 1.46%) and United Bank of India (down 1.55%) edged lower.
Stocks of private sector banks were mixed. Kotak Mahindra Bank (up 0.41%) and Yes Bank (up 0.58%) edged higher. ICICI Bank (down 1.54%), IndusInd Bank (down 0.59%) and Axis Bank (down 0.1%) edged lower.
Index heavyweight HDFC Bank was up 0.2%.
The Reserve Bank of India (RBI) yesterday, 1 August 2016 announced guidelines for ‘on tap' licensing of universal banks in the private sector. Some of the key aspects of the guidelines include: (i) resident individuals and professionals having 10 years of experience in banking and finance at a senior level are also eligible to promote universal banks; (ii) large industrial houses are excluded as eligible entities but are permitted to invest in the banks up to 10%; (iii) Non-Operative Financial Holding Company (NOFHC) has been made non-mandatory in case of promoters being individuals or standalone promoting/converting entities who/which do not have other group entities; (iv) Not less than 51% of the total paid-up equity capital of the NOFHC shall be owned by the promoter/promoter group, instead being wholly owned by the promoter group; and (v) existing specialised activities have been permitted to be continued from a separate entity proposed to be held under the NOFHC subject to prior approval from the central bank and subject to it being ensured that similar activities are not conducted through the bank as well.
Telecom stocks declined. Reliance Communications (down 2.31%), Bharti Airtel (down 1.54%) and Idea Cellular (down 0.14%) edged lower.
Bharti Infratel was off 2.11%. Bharti Infratel is a telecom tower arm of Bharti Airtel.
Metal and mining stocks edged lower. Jindal Steel & Power (down 6.39%), Vedanta (down 5.85%), National Aluminium Company (down 2.97%), Steel Authority of India (down 2.64%), Hindustan Zinc (down 2.06%), NMDC (down 1.32%), Hindustan Copper (down 1.36%), Hindalco Industries (down 1.13%), Tata Steel (down 0.67%) and JSW Steel (down 0.78%) declined.
Copper prices edged higher in global commodies markets. High Grade Copper for September 2016 delivery was currently up 0.57% at $2.212 per pound on the COMEX.
Shares of state-run coal mining giant Coal India fell 0.9% at Rs 323.35 after the company and its subsidiaries achieved 91% of targeted coal production at 36.74 million tonnes in July 2016 on provisional basis. With respect to coal offtake, Coal India and its subsidiaries on a provisional basis achieved 89% of target in July 2016. The total offtake stood at 41.47 million tonnes in July 2016. The company announced the monthly coal production and offtake performance after market hours yesterday, 1 August 2016.
Tech Mahindra rose 1.79% at Rs 498.45 after consolidated net profit fell 12.58% to Rs 750.10 crore on 0.54% increase in revenue to Rs 6920.90 crore in Q1 June 2016 over Q4 March 2016. The result was announced after market hours yesterday, 1 August 2016.
Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 10.59% to Rs 1029.10 crore in Q1 June 2016 over Q4 March 2016. The EBIDTA margin fell sharply to 14.9% in Q1 June 2016 from 16.7% in Q4 March 2016. Commenting on the first quarter results, Vineet Nayyar, Vice Chairman, Tech Mahindra, said that the company had a steady quarter inspite of the seasonal weakness in the mobility business. The management expects improvement of the company's profitability going ahead, Nayyar said.
Commenting on the first quarter results, C P Gurnani, Managing Director & CEO, Tech Mahindra said that the business has done well on several parameters like large client growth, digital wins and strong cash flows. Automation and delivery excellence are two key focus areas for the year going forward, he added.
Sun Pharmaceutical Industries (Sun Pharma) lost 0.76% at Rs 828.75. The company said that one of its subsidiaries received final approval from USFDA for its abbreviated new drug application for generic version of Glumetza tablets. Sun Pharma said that the drug is likely to be commercially launched in the US over the next few weeks. Glumetza tablets are indicated to improve glycemic control in adults with type 2 diabetes mellitus. As per IMS MAT June 2016 data, Glumetza tablets had annual sales of approximately $1.2 billion in the US. The announcement was made during market hours today, 2 August 2016.
Hero MotoCorp rose 1.26% at Rs 3,260 after the company announced that its total sales rose 9.13% to 5.32 lakh units in July 2016 over July 2015. The company announced the monthly sales volume data after market hours yesterday, 1 August 2016.
Hero MotoCorp said that the company continues to dominate the 100 cc and 125 cc motorcycles segments. In the scooter segment, the Maestro Edge and Duet models maintained their growth trajectory in July 2016, Hero MotoCorp said.
In July 2016, Hero MotoCorp commenced retail sales of Splendor iSmart 110 – the first motorcycle to have been completely designed and developed by its in-house Research and development (R&D) at the state-of-the-art Hero Centre of Innovation and Technology in Jaipur. The company said that the initial customer response to the new bike has been positive.
With the above average monsoon and implementation of the seventh pay commission recommendations, the company remains cautiously optimistic about a positive turnaround in the two-wheeler industry in the second half of the year, Hero MotoCorp said in a statement.
Bajaj Auto rose 0.32% at Rs 2,744.25. The company's total sales fell 0.12% to 3.29 lakh units in July 2016 over July 2015. Bajaj Auto's total motorcycles sales rose 1% to 2.85 lakh units in July 2016 over July 2015. Domestic motorcycles sales rose 21% to 1.74 lakh units in July 2016 over July 2015. Motorcycle exports fell 20% to 1.11 lakh units in July 2016 over July 2015.
Sales of commercial vehicles in the domestic market rose 8% to 23,698 units in July 2016 over July 2015. Exports of commercial vehicles fell 21% to 20,608 units in July 2016 over July 2015.
Total sales of motorcycles and commercial vehicles in the domestic market rose 20% to 1.98 lakh units in July 2016 over July 2015. Combined exports of motorcycles and commercial vehicles fell 20% to 1.31 lakh units in July 2016 over July 2015. The company announced the monthly sales volume data during trading hours.
Maruti Suzuki India rose 2.49% at Rs 4,991 after the company increased prices of select models ranging from Rs 1,500 to Rs 5,000 ex-showroom Delhi with effect from 1 August 2016. The announcement was made after market hours yesterday, 1 August 2016. In case of newly launched models like Vitara Brezza and Baleno, the prices are being increased by upto Rs 20,000 and upto Rs 10,000 respectively, MSIL said. This price revision is based on factors like segment wise demand, forex movements and strategic objectives of the company, Maruti Suzuki India (MSIL) said in a statement.
Tata Motors lost 2.8% at Rs 493.85. The company announced that Tata Motors passenger and commercial vehicle sales (including exports) rose 7% to 43,160 vehicles in July 2016 over July 2015. The company's domestic sales of Tata commercial and passenger vehicles rose 8% to 37,789 units in July 2016 over July 2015. The company's sales from exports rose 6% to 5,371 units in July 2016 over July 2015. The announcement was made after market hours yesterday, 1 August 2016.
UltraTech Cement lost 1.25% at Rs 3,708.95. The company announced that it has participated in the auction of coal linkages for captive power plant sub-sector and secured 1.29 lakh tons of coal at a premium of Rs 100 per ton over floor price of Rs 970 per ton from Gevra Road mines in Maharashtra and 1.38 lakh tons of coal at a premium of Rs 125 per ton over floor price of Rs 970 per ton from New Kusmunda (NKCR) mines in Chhattisgarh. A formal communication vesting the linkages in the company's favour is expected in due course. With these auctions, the company has secured in all, coal linkages for 4.09 lakh tons for its plants located at Maharashtra and Chhattisgarh. Both these locations are land locked and this helps the company in mitigating the impact of rising costs of petcoke/imported coal. The company intends to participate in the future linkage auctions for its plants located strategically near the coal mines.
Bharat Financial Inclusion tumbled 9.73% at Rs 822.20 following the arrest of the company's President S Dilli Raj by the Enforcement Directorate. Bharat Financial Inclusion, formerly known as SKS Microfinance, announced after market hours yesterday, 1 August 2016, that its President S Dilli Raj was arrested by the Enforcement Directorate (ED) in connection to a complaint filed by IDBI Bank against First Leasing Company of India. S Dilli Raj previously worked in First Leasing Company of India.
Bharat Financial Inclusion clarified that the investigation does not in any way relate to the company. Dilli Raj had earlier issued a personal statement on 19 October 2015 stating that he had resigned from First Leasing Company of India on 22 November 2007 and was relieved on 18 January 2008. He had stated that all loans taken during his tenure have been repaid by First Leasing and that the complaint filed by IDBI Bank relates to loans sanctioned during the years 2012 and 2013, which was six years after he ceased to be an employee of First Leasing. Dilli Raj also had clarified that his role was confined to treasury operations and he did not authenticate or sign any financial statements of First Leasing.
The Sensex and the Nifty declined for the third straight trading session. The Sensex has declined 226.91 points or 0.8% in three trading sessions from its close of 28,208.62 on 28 July 2016. The Sensex has risen 1,864.17 points or 7.13% in calendar year 2016 so far (till 2 August 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 5,487.10 points or 24.39%. The Sensex is off 435.88 points or 1.53% from a 52-week high of 28,417.59 hit on 10 August 2015. The Sensex is off 2,043.03 points or 6.8% from a record high of 30,024.74 hit on 4 March 2015.
On the macro front, eight core industries comprising nearly 38% of the weight of items included in the Index of Industrial Production (IIP) increased 5.2% in June 2016 over June 2015, compared to 2.8% growth in May 2016 and 3.1% growth in June 2015. Its cumulative growth during the three months period from April to June 2016 was 5.4%. The data was announced after market hours yesterday, 1 August 2016.
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 tomorrow, 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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