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31
January 2017
I had mentioned in
Monday’s closing report that Nifty, Sensex were likely to remain range-bound.
The major indices of the Indian stock markets suffered a correction on Tuesday
and closed 0.70%-0.83% lower than Monday’s close. NSE trading volumes were on
the higher side on Tuesday. The trends of the major indices in the course of
Tuesday’s trading are given in the table below: The Total Investment & Insurance Solutions
 |
| Major Indices (The Total Investment & Insurance Solutions) |
On
the NSE, on Tuesday, there were 384 advances, 1,243 declines and 283 unchanged.
On the BSE, there were 828 advances, 1,897 declines, 220 unchanged. The Total Investment & Insurance Solutions
Caution
ahead of the presentation of the Union Budget and negative global cues pulled
the Indian equities markets lower on Tuesday. The Budget session started on
Tuesday with President Pranab Mukherjee's address to a joint sitting of both
houses of Parliament, along with Finance Minister Arun Jaitley tabling the
Economic Survey for 2016-17. However, investors were worried about the
political logjam over the recent demonetisation decision that could stall
Parliament's proceedings. The key indices closed the day's trade in the red, as
selling pressure was witnessed in stocks of IT (information technology), oil
and gas, and healthcare stocks.
The
Economic Survey 2016-17 has advocated fast remonetisation, a cut in tax rates
and stamp duties and reining in over-zealous tax administration to make India
the world's fastest growing major economy again. The survey, tabled in
Parliament by Finance Minister Arun Jaitley, said demonetisation has had
short-term costs but holds the potential for long-term benefits. But it would
require follow-up actions to minimise the costs and maximise the benefits.
"These actions would allow growth to return to trend in 2017-18, possibly
making it the fastest-growing major economy in the world, following a temporary
dip in 2016-17," the survey stated. The bulls are likely to gain from this
approach, as macroeconomic growth and bullish market sentiments are
interlinked. The Total Investment & Insurance
Solutions
Indian
IT (information technology) stocks tumbled during the mid-afternoon trade
session on Tuesday as the US government introduced a proposed visa reform bill
in the US House of Representatives. The bill spooked investors, as it seeks to
double the minimum wages offered by IT firms in the US. The bill proposes to
raise the minimum salary of an H-1B visa holder to around $130,000 per annum
from the present limit of $60,000 per year. The S&P BSE IT index
plunged by 302.71 points or 3.06% (at 2.15 p.m.). IT majors such as Tata
Consultancy Services (TCS), Infosys, HCL Technologies, Wipro and Tech Mahindra
traded deep in the red. Every 10% hike in H-1B salaries can hurt earnings by
nearly 10%-12% of IT companies, pointed out market analysts. The Total Investment & Insurance Solutions
The
Economic Survey 2016-17 tabled in Parliament on Tuesday by Finance Minister
Arun Jaitley has mooted the formation of a centralised public sector asset
rehabilitation agency (PARA). According to the survey, the country is grappling
with a 'Twin Balance Sheet' (TBS) problem of over-leveraged companies and bad
loan-encumbered banks, a legacy of the boom years around the global financial
crisis. "So far, there has been limited success. The problem has
consequently continued to fester: Non-performing assets (NPAs) of the banking
system (and especially public sector banks) keep increasing, while credit and
investment keep falling," the survey said. "Now it is time to
consider a different approach -- a centralised PARA that could take charge of
the largest, most difficult cases, and make politically-tough decisions to
reduce debt." As per the survey, gross NPAs have climbed to almost 12% of
gross advances for public sector banks at end-September 2016. This is likely to
improve share prices of PSUs (public sector undertakings) listed in the Indian
stock exchanges.
The
government has taken several initiatives to provide healthcare to all,
including an immunisation programme that helped 55 lakh children, President
Pranab Mukherjee said on Tuesday. Mukherjee told a joint session of Parliament
that the government aimed to make healthcare affordable for the poor.
"Mission Indradhanush ... has so far helped 55 lakh children get immunised
against several diseases. It commits to vaccinate every child everywhere
against preventable diseases," he said. The President spoke about the
Pradhan Mantri Jan Aushadhi Scheme that helped healthcare and medicines reach
the poorest sections of the society. Pharmaceutical industry stocks are likely
to benefit from the favourable government policy.
Dabur
India Ltd. posted a drop of 7.5% in net profit for the October-December
quarter. Net profit fell to Rs293.76 crore from Rs317.58 crore during the same
quarter last year, the company said in a stock exchange filing. Revenue
declined by 6% in the quarter, to Rs1,852.91 crore, compared to Rs1,972.03
crore on a year-on-year basis. Currency fluctuations and rising costs of key
inputs led to a decline in revenue. Earnings before interest, tax, depreciation
and amortisation (EBITDA) were down 11.6% to Rs333.88 crore, compared to
Rs377.81 crore during the third quarter of FY16. EBITDA margin dropped to 18%
as against 19.2% last year. The company’s shares closed at Rs276.00, down 1.39%
on the NSE.
The
top gainers and top losers of the major indices are given in the table below:
 |
Top Gainer (The Total
Investment & Insurance Solutions)
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| Asian Indices (The Total Investment & Insurance Solutions) |
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