Key benchmark indices registered decent gains on expectations that the Goods and Services Tax (GST) constitutional amendment bill may be passed in parliament this week. The barometer index, the S&P BSE Sensex, rose 266.40 points or 0.96% at 28,069.64, as per the provisional closing data. The gains for the Nifty 50 index were higher than those for the Sensex in percentage terms. The Nifty rose 94.45 points or 1.11% at 8,635.65, as per the provisional closing data. The Sensex provisionally settled above the psychologically important 28,000 level after crossing that mark in intraday trade. Gains in global stocks also aided the upmove on the domestic bourses.
The Sensex hit its highest level in more than 11 months and the Nifty hit its highest level in more than a year as these two key benchmark indices extended gains in late trade. The Sensex jumped 307.13 points or 1.1% at the day's high of 28,110.37 in late trade, its highest level since 11 August 2015. The barometer index lost 66.73 points or 0.24% at the day's low of 27,736.51 at the onset of trading session. The Nifty rose 99.95 points or 1.11% at the day's high of 8,641.15 in late trade, its highest level since 23 July 2015. The index lost 24 points or 0.28% at the day's low of 8,517.20 at the onset of trading session.
The market breadth indicating the overall health of the market was strong. On BSE, 1,720 shares rose and 1,000 shares declined. A total of 183 shares were unchanged. The BSE Mid-Cap index was provisionally up 1%. The BSE Small-Cap index was provisionally up 1.05%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 3852 crore, higher than turnover of Rs 3319.14 crore registered during the previous trading session.
The latest upmove on the domestic bourses materialized on expectations that the Goods and Services Tax (GST) constitutional amendment bill may be passed in parliament this week. According to media reports, the GST constitutional amendment bill has been listed for discussion in the Rajya Sabha in this week. 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 month-long monsoon session of the parliament will conclude on 12 August 2016.
In overseas stock markets, Asian and European shares edged higher as worries over the impact of Britain's Brexit vote eased after policymakers from the Group of 20 countries agreed at the weekend to work to support global growth and better share the benefits of trade. Japanese shares ended near the flat line. Investors are hoping for a big stimulus announcement from the Bank of Japan (BOJ) at the conclusion of a two-day monetary policy review from the Japanese central bank on 28-29 July 2016. Strength in the yen against the dollar post last month's Brexit vote and a slowdown in the Japanese economy have triggered expectations of further easing of monetary policy from the BOJ. A stronger yen hurts the competitiveness of Japanese exporters
US stocks eked out small gains during the previous trading session on Friday, 22 July 2016, after an upbeat manufacturing report. Markit's preliminary reading of its manufacturing purchasing managers index came in at 52.9 for July 2016 a final reading of 51.3 for June 2016, as production and employment strengthened. Payrolls rose at the fastest pace in a year.
The Federal Open Market Committee (FOMC) is widely expected to keep the benchmark fed funds rates unchanged after the conclusion of two-day monetary policy meeting on 26-27 July 2016. Market participant will scrutinize the Fed statement for clues on policy direction. The Fed has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015.
Bank stocks edged higher on renewed buying. Among public sector banks, Punjab National Bank (up 8.98%), Bank of India (up 3.82%), Indian Bank (up 4.81%), Union Bank of India (up 3.95%), State Bank of India (up 2.66%), IDBI Bank (up 3.06%) and United Bank of India (up 1.96%) rose.
Bank of Baroda (BoB) was up 3.08%. The state-run bank during market hours today, 25 July 2016, announced that the Reserve Bank of India (RBI) has imposed a penalty of Rs 5 crore on the bank. Pursuant to the internal audit of BoB, the central bank and investigative agencies in October 2015 were advised by BoB of certain irregularities observed. The RBI carried out the investigation and noted the deficiencies which were reflective of weaknesses and failures in internal control mechanisms in respect of certain AML provisions such as monitoring of transactions, timely reporting to FIU, and assigning of UCIC to customers. BoB said it has fully cooperated with the RBI during the process, leading to the conclusion of its findings. BoB said it has implemented a comprehensive corrective action plan, to strengthen internal controls and to ensure that such incidents do not recur.
Among private sector banks, IndusInd Bank (up 1.82%), ICICI Bank (up 1.37%), Kotak Mahindra Bank (up 0.7%) and Yes Bank (up 1.86%) edged higher.
Index heavyweight HDFC Bank was up 1.26% at Rs 1,247. The stock hit a high of Rs 1,249 in intraday trade, which is a record high for the counter. The stock hit a low of Rs 1,225.25 in intraday trade.
Axis Bank edged higher in volatile trade after the bank's management in a post result conference call said it expects a strong credit growth for the lender at around 18-20% in FY 2017. The stock was up 0.17% at Rs 538.45. The stock hit a high of Rs 539.60 and a low of Rs 515 in intraday trade. Axis Bank's net profit fell 21.37% to Rs 1555.53 crore on 13.22% growth in total income to Rs 13852.18 crore in Q1 June 2016 over Q1 June 2015. The fall in net profit was due to a sharp surge in provisions and contingencies. Provisions and contingencies jumped 88.73% to Rs 2117.17 crore in Q1 June 2016 over Q1 June 2015. On a sequential basis, provisions and contingencies surged 81.21%. The bank's net interest income rose 11.36% to Rs 4516.92 crore in Q1 June 2016 over Q1 June 2015. The net interest margin (NIM) declined to 3.79% in Q1 June 2016 from 3.81% in Q1 June 2015. Axis Bank's management reiterated in a post result conference call that NIM is expected to remain above 3.6% as per the guidance given before.
The core operating profit rose 3.27% to Rs 3558.19 crore in Q1 June 2016 over Q1 June 2015. The figure of core operating profit is arrived at after deducing trading income from operating profit. Axis Bank announced the results after trading hours on Friday, 22 July 2016.
On absolute basis, Axis Bank's gross non-performing assets (NPA) edged higher to Rs 9553.17 crore as on 30 June 2016 from Rs 6087.51 crore on 31 March 2016 and Rs 4251.18 crore as on 30 June 2015. The ratio of gross NPA to gross customer assets edged higher to 2.54% as on 30 June 2016 from 1.67% as on 31 March 2016 and 1.38% as on 30 June 2015. The ratio of net NPA to net customer assets edged higher to 1.08% as on 30 June 2016 from 0.7% as on 31 March 2016 and 0.48% as on 30 June 2015.
Axis Bank attributed increase gross and net NPA to slippages from its watch list loans. As on 30 June 2016, loans outstanding on the bank's watch list reduced 10% over the previous quarter and stood at Rs 20295 crore. The reduction in the watch list primarily represents slippages to NPAs amounting to Rs 2680 crore, which comprises 92% of the total corporate credit slippages. The bank's provision coverage ratio declined to 69% as on 30 June 2016 from 72% as on 31 March 2016.
The cumulative value of net restructured assets as on 30 June 2016 stood at Rs 7363 crore, constituting 1.99% of net customer assets, compared to Rs 8072 crore, constituting 2.25% of net customer assets as on 31 March 2016.
The bank's advances grew 21% year-on-year (YOY) to Rs 3.44 lakh crore as on 30 June 2016. Retail advances grew 24% YOY and stood at Rs 1.43 lakh crore, constituting 41% of the net advances of the bank. Corporate credit grew 21% YOY and stood at Rs 1.58 lakh crore, constituting 46% of net advances. SME advances grew 13% YOY and stood at Rs 43611 crore as on 30 June 2016. Axis Bank said that the bank remains well capitalized to pursue growth opportunities. The bank expects credit growth to be around 18-20% in FY 2017. The bank expects SME growth to be better in FY 2017 compared to FY 2016. The guidance for credit cost is 125-150 basis points for FY 2017. The guidance on credit growth and credit cost was given by the management in a post result conference call.
Index heavyweight and housing finance major HDFC was up 1.83% at Rs 1,380.45. The stock hit a high of Rs 1,384.90 and a low of Rs 1,350.50 in intraday trade.
Dr Reddy's Laboratories (DRL) edged lower on expectations of subdued Q1 results. The stock was off 3.39% at Rs 3,483. The company is scheduled to announce its Q1 June 2016 earnings tomorrow, 26 July 2016. According to reports, a domestic brokerage expects DRL to report flat revenue growth on year-on-year (YoY) basis in Q1 June 2016. The brokerage expects DRL to post a 20% decline in its profit after tax (PAT) in Q1 June 2016. The brokerage has reportedly stated in its earnings preview on DRL that DRL's US business is likely to remain flat, and Russia CIS region sales are expected to grow in single-digit due to currency devaluation. The brokerage expects DRL's India business to report decent 14% YoY growth in Q1.
Passenger car major Maruti Suzuki India (MSIL) was up 2.92% at Rs 4,542.10. The company is scheduled to announce its Q1 June 2016 results tomorrow, 26 July 2016.
Powered by Capital Market - Live News
