The Sensex ended with small gains, while the Nifty ended almost flat after a volatile trading session. The barometer index, the S&P BSE Sensex, rose 10.25 points or 0.03% to 38,730.82, as per the provisional closing data. The Nifty 50 index fell 2.7 points or 0.02% to 11,555.90, as per the provisional closing data.
The broader market bucked trend. The S&P BSE Mid-Cap index was up 0.63%. The S&P BSE Small-Cap index was up 0.05%.
The market breadth was negative. On the BSE, 1175 shares rose and 1266 shares fell. A total of 161 shares were unchanged.
The government's move to increase minimum public shareholding in listed companies disappointed domestic investors. Finance Minister Nirmala Sitharaman in her maiden Budget speech on Friday, 5 July 2019, urged Sebi to consider increasing the minimum public shareholding in listed firms to 35% from 25%. As many as 1,037 companies need to dillute promoter holding to bring public shareholding to 35% as proposed by the 2019-20 Union Budget. Of these, 62 companies had market cap of more than Rs 10,000 crore.
Further, in order to discourage the practice of avoiding dividend distribution tax (DDT) through buyback of shares by listed companies, the government proposed that listed companies shall be liable to pay additional tax of 20% in case of buyback of share, as is the case for unlisted companies.
Forty-four companies announced/closed their buybacks after 1 April 2019. Of the Rs 26562.69-crore proposed outgo from companies, investors have received Rs 3033.58 crore.
The big surcharge on the high income group also spoiled sentiment. FM proposed to enhance surcharge on individuals having taxable income from Rs 2 crore to Rs 5 crore and Rs 5 crore and above so that effective tax rates for these two categories will increase by around 3% and 7% respectively. The effective tax rate on the highest tax bracket goes up to 42.7% after the hike.
There are concerns that the increased surcharge on super-rich could also affect foreign funds investing in India since a same tax structures apply for individuals, Hindu Undivided Family (HUF) and Associations of Persons (AOPs). A large number of FPIs are structured as trusts or AOPs to avoid minimum alternate tax.
Among index pivotals, Reliance Industries rose 2% while ITC fell 1.69%.
Bajaj Finserv (up 4%), Indian Oil Corporation (up 3.96%) and UltraTech Cement (up 2.94%) were top gainers for the day.
UPL (down 3.49%), Yes Bank (down 2.63%), GAIL (India) (down 2.58%) and NTPC (down 5.13%) were top losers for the day.
Titan Company was in spotlight after it plunged 12.23% to Rs 1099.40. The company said it witnessed a tough macro-economic environment in April-June quarter with consumption being hit. The company said very high gold prices particularly in June also impacted growth in the jewellery industry. Against this background, the company's growth particularly in the jewellery segment was lower than planned even though the gains in market share were sustained.
In the jewellery business, revenue grew by a muted 13% in Q1 as sharp increase in gold prices dented consumer demand significantly in the month of June, Titan said.
For its watch business, Titan said the division continued with good sales momentum with revenue growth of 19%, partly aided by execution of a large institutional order from Tata Consultancy Services (TCS). Tech-enabled wearable has been the new driver for the division, it added. During the quarter, Titan's watch division launched a new segment of mechanical watches, which takes back time pieces to an era of hand craftsmanship and precision. While, the eyewear division witnessed revenue growth of 13%, aided by the activation during the quarter, Titan added.
A foreign brokerage reportedly downgraded the stock to neutral from outperform with a target price at Rs 1,250, implying flat growth from current levels. The research house further said it would look for a better entry point. It cut earnings estimates by 2%. The brokerage feels stretched valuations and near-term softness cap upside.
HDFC Bank was down 1.2% to Rs 2379. The bank announced before market hours yesterday, 8 July 2019, that its advances aggregated to approximately Rs 8,29,500 crore as of 30 June 2019 as compared to Rs 7,08,600 crore as of 30 June 2018 and Rs 8,19,400 crore as of 31 March 2019.
The bank's deposits aggregated to approximately Rs 9,54,500 crore as of 30 June 2019 as compared to Rs 8,05,800 crore as of 30 June 2018 and Rs 9,23,100 crore as of 31 March 2019.
The bank's CASA ratio stood at around 40% as compared to 41.7% as of 30 June 2018 and 42.4% as of 31 March 2019. During the quarter ended 30 June 2019, the bank purchased loans aggregating Rs 7,230 crore through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation (HDFC).
Delta Corp was down 1.45% to Rs 166.3. The company announced a 2.58% increase in net profit to Rs 42.48 crore on a 0.4% decline in total income to Rs 194.72 crore for the period Q1 June 2019 over Q1 June 2018.
Pharma stocks jumped. Sun Pharmaceuticals Industries (up 5.16%), Piramal Enterprises (up 3.79%), Wockhardt (up 3.09%), Aurobindo Pharma (up 2.96%), Cadila Healthcare (up 2.94%), Glenmark Pharmaceuticals (up 2.83%), Lupin (up 2.68%), Cipla (up 1.94%), Divi's Laboratories (up 1.87%), IPCA Laboratories (up 0.73%) and Alkem Laboratories (up 0.08%) advanced.
Dr. Reddy's Laboratories was down 0.01% to Rs 2595.55. The pharma major announced the launch of the over-the-counter store brand equivalent of Mucinex D Extended Release Tablets in the U.S. Markets. The company announced the launch of Guaifenesin 600 mg and Pseudoephedrine HCI 60 mg and Guaifenesin 1200 mg and Pseudoephedrine HCI 120 mg-in the United States market, as approved by the U.S. Food and Drug Administration. Dr. Reddy's OTC Guaifenesin 1200 mg and Pseudoephedrine HCI 120 mg is available in 24-count packages. Dr. Reddy's OTC Guaifenesin 600 mg and Pseudoephedrine HCI 60 mg is available in 18- and 36-count packages.
Glenmark Pharmaceuticals rose 2.42% to Rs 447.3. Glenmark Pharmaceuticals' subsidiary Glenmark Pharmaceuticals Inc., USA (Glenmark) has been granted final approval by the United States Food & Drug Administration (U.S. FDA) for Ranolazine Extended-Release Tablets, 500 mg and 1,000 mg, a generic version of Ranexa Extended-Release Tablets, 500 mg and 1,000 mg, of Gilead Sciences, Inc. The announcement was made before market hours today, 9 July 2019.
Lupin was up 2.26% to Rs 750.3 after the company announced the launch of Imatinib Mesylate tablets, 100 mg and 400 mg, a generic version of Novartis Pharmaceuticals Corporation's Gleevec tablets. This tablet is used in treating cancer.
Bajaj Finance climbed 5.54% to Rs 3604. The company reported that on a consolidated basis, its customer franchise rose by 30.38% to approximately 36.9 million customers in Q1 June 2019 as compared to 28.3 million customers in Q1 June 2018, adding a total of 2.5 million new customers during the quarter. The company further reported that new loans booked during Q1 June 2019 were 7.3 million as compared to 5.6 million in Q1 June 2018. Further, the assets under management (AUM) stood at approximately Rs 129,000 crore as in Q1 June 2019 as compared to Rs 91,287 crore in Q1 June 2018 and Rs 115,888 crore as in Q4 March 2019.
Hero MotoCorp rose 2.72% to Rs 2445. The company hiked the ex-showroom prices of its motorcycles and scooters, effective 8 July 2019. The price increase across its range of two-wheelers has been 1% (of the ex-showroom price), although the exact quantum of the increase will vary on the basis of the model and the specific market. The announcement was made after market hours yesterday, 8 July 2019.
In a separate announcement during market hours today, 9 July 2019, the two-wheeler major said that it has assigned the role of the Chief Technology Officer (CTO) to Vikram Kasbekar, while Rajat Bhargava has been given the responsibility to head the newly created 'Emerging Mobility' Business Unit.
Tata Motors was up 0.94% to Rs 156.1. The company announced that it won an order from Bangladesh Army for supplying over 200 units of Tata Hexa four-wheel drive SUV.
HDFC was down 0.94% to Rs 2239.75. The bank announced issue of fresh secured redeemable non-convertible debentures (NCD) under Series V-006. The coupon rate on these NCDs is 7.99% and only selected investors are eligible to apply. Both CRISIL and ICRA have issued AAA rating on these NCDs. The issue size is Rs 2000 crore with over-subscription option of upto Rs 3000 crore. The tenor for NCDs is 5 years with redemption date set at 11 July 2024.
Shares of IT companies fell. Mphasis (down 2.72%), HCL Technologies (down 1.65%), Tech Mahindra (down 0.96%), Hexaware Technologies (down 0.84%), Wipro (down 0.62%) and Infosys (down 0.48%) declined. Oracle Financial Services Software (up 0.35%) and Persistent Systems (up 0.12%) gained.
IT major Tata Consultancy Services (TCS) declined 2.05% to Rs 2131.45. TCS announces its Q1 June 2019 result today, 9 July 2019.
Overseas, European markets were trading lower, while most Asian markets closed lower on Tuesday after their US counterparts slipped overnight.
In Europe, the UK Conservative Party members start voting to choose Theresa May's successor. Front-runner Boris Johnson and Jeremy Hunt will appear at events through the week, including a televised debate on July 9.
US stocks dropped Monday as investors scaled back expectations for interest-rate cuts following last week's strong June jobs report.
The key testimony from Federal Reserve Chairman Jerome Powell this week will be closely watched, as investors assess prospects for monetary easing following some conflicting signals on the US economy. Federal Reserve Chairman Jerome Powell testifies before Congress on monetary policy and the state of the US economy on Wednesday (the House of Representatives) and Thursday (the Senate).
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