Market moves in a narrow range

Key benchmark indices continued to trade in a small range in negative zone in mid-morning trade. At 11:15 IST, the barometer index, the S&P BSE Sensex was off 36.48 points or 0.13% at 27,778.70. The Nifty 50 index was currently off 4.25 points or 0.05% at 8,515.25

In overseas stock markets, Asian markets were trading mixed ahead of Bank of England's interest rate decision later in the global day. In US stocks, the S&P 500 and Dow Jones Industrial Average scored meager gains yesterday, 13 July 2016 but enough to extend their run into record territory and advance for a fourth session in a row. However, the tech-heavy Nasdaq Composite index took a breather following a five-session climb to end lower. Stocks got a slight bump from the US Fed's beige book report released yesterday, 13 July 2016 which indicated that the US economy is holding steady although consumption may be softening. The beige book is an anecdotal survey of economic conditions in the US compiled by the Fed's regional banks.

The Bank of England meets later in the global day today, 14 July 2016, and expectations are that it will lower its benchmark lending rate by a quarter of a percentage point to 0.25% to counter the fallout from the Brexit vote. In the UK, Theresa May became the country's prime minister after former leader David Cameron tendered his resignation to the Queen.

Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,306 shares rose and 945 shares declined. A total of 129 shares were unchanged. The BSE Mid-Cap index was currently up 0.21%. The BSE Small-Cap index was currently up 0.55%. Both these indices outperformed the Sensex.

Pharma shares saw mixed trend. Cipla (down 0.94%), Dr Reddy's Laboratories (down 0.94%), Lupin (down 0.13%), Sun Pharmaceutical Industries (down 1.19%) and Alkem Laboratories (down 0.04%) fell.

Cadila Healthcare (up 1.43%), Glenmark Pharmaceuticals (up 0.37%), GlaxoSmithKline Pharmaceuticals (up 0.15%), Aurobindo Pharma (up 0.19%) and Wockhardt (up 0.19%) rose.

Shares of jewellery retailers rose after the government accepted the recommendation of a committee and relaxed the rules on excise duty on gold jewellery. Gitanjali Gems (up 1.47%), Tara Jewels (up 8.47%), Titan Company (up 2.42%), Tribhovandas Bhimji Zaveri (up 2.75%), Rajesh Exports (up 1.05%), PC Jeweller (up 3.09%), Goldiam International (up 0.63%), Thangamayil Jewellery (up 1.53%) gained. Vaibhav Global slipped 0.14%. There will be no requirement for jewellers to submit any ground plan of the premises for taking excise registration. In case the invoice does not show excise duty separately, the value for VAT will be treated as cum duty value. The records maintained for state VAT and other private records showing details of inputs, stocks, manufactured goods, sold/exported goods, etc. will be accepted for excise purposes.

When a retail customer brings jewellery (other than in form of gold or any precious metal) to a jeweller which is converted into new jewellery by the jeweller or a job worker of such jeweller, excise duty will be payable only on value addition, including cost of additional materials and labour charges charged, subject to the maintenance of certain records. Repairs and alterations, which do not change the identity, character and use of the goods and do not result in a new item, will not attract excise duty. The government also said that excise duty will not be payable on the sale of traded goods. The government further said that no excise audit will be carried out for the first two years for units whose duty payment (cash plus credit) is less than Rs 1 crore i.e. turnover of manufactured goods less than Rs 100 crore.

The government has also decided to increase the SSI eligibility limit for the imposition of excise duty to Rs 15 crore from Rs 12 crore for manufacturers of articles of jewellery or parts of articles of jewellery or both. The SSI exemption limit has been raised to Rs 10 crore from Rs 6 crore in a financial year and Rs 85 lakh for the month of March 2016. It may be recalled that the government imposed excise duty of 1% without input and capital goods credit or 12.5% with input tax credit on articles of jewellery in the Union Budget 2016-17.

Mandhana Industries was locked at 5% lower circuit at Rs 66.90 after IFCI and Kotak offloaded bulk shares in the company through stock exchanges mechanism yesterday, 13 July 2016. The stock opened with a downward gap and remained locked at 5% lower circuit level at Rs 66.90 so far during the day, which is a record low for the counter. IFCI sold 2 lakh shares of Mandhana Industries at Rs 70.40 per share in a bulk deal on the BSE yesterday, 13 July 2016. IFCI offloaded 3 lakh shares of company at Rs 70.35 per share on the NSE yesterday, 13 July 2016. Kotak Mahindra (International) A/C Premier Investment sold 2.34 lakh shares of the company at Rs 70.35 per share on the NSE yesterday, 13 July 2016. ECL Finance sold 2 lakh shares of the company at Rs 70.40 per share on the BSE yesterday, 13 July 2016. ECL Finance sold 15.53 lakh shares of the company at Rs 70.38 per share on the NSE yesterday, 13 July 2016.

On the macro front, the inflation based on wholesale price index (WPI) for the month of June 2016 is scheduled to be released by the government today, 14 July 2016. WPI rose 0.79% in May 2016, after rising 0.34% in April.

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