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Last Updated : Aug 02, 2019 08:01 PM IST | Source: Moneycontrol.com

Evening Walk Down D-St: Market recovers on hopes that Centre will tweak tax surcharge on FPIs

For the week, Nifty50 posted second-biggest weekly fall of 2019, down 2.8 percent while the S&P BSE Sensex close 2 percent lower for the week ended August 2nd.

Kshitij Anand @kshanand
 
 
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Indian markets recovered in the second half of the trading sessions on August 2, largely supported by short coverings after media reports quoting government officials suggested that Prime Minister Office (PMO) and finance ministry’s top bureaucrats are in talks over foreign portfolio investor (FPI) surcharge issue.

The government is likely to put on hold a plan to raise the minimum public shareholding in listed companies to 35 percent from 25 percent, a source privy to the matter told Reuters.

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“The government is also looking for ways to ease concerns of foreign portfolio investors that have pulled out of Indian equity markets after a budget announcement of higher taxes for individuals and trusts earning more than Rs 2 crore a year,” added the report.

Reacting to the news report, Indian markets witnessed a rebound which helped Nifty50 to climb above 11,000, while the S&P BSE Sensex rose nearly 100 points.

"Global markets were weak due to an escalation in US-China trade war, but India recovered in the second half of the trading day on optimism as government mulls exempting FPI from the super-rich surcharges," Vinod Nair, Head of Research, Geojit Financial Services Ltd told Moneycontrol.

"Additionally, better domestic macros like GST collection, PMI and Monsoon forecast in August provided a relief hoping that economy will improve by H2 FY20," he said.

For the week, Nifty50 posted second-biggest weekly fall of 2019, down 2.8 percent, while the S&P BSE Sensex close 2 percent lower for the week ended August 2.

On August 2, the S&P BSE Sensex rose 99 points to 37,118 while Nifty50 closed 17 points higher at 10,997.

On the sectoral front, the S&P BSE Telecom index rallied 3.6 percent, followed by the S&P BSE Auto index which was up 1.07 percent, and the S&P BSE Consumer Discretionary Goods that rose 0.82 percent.

Top Nifty gainers include Bajaj Auto, Asian Paints, and Bharti Airtel while selling was seen in SBI, NTPC, and Indiabulls Housing Finance.

Stocks in news:

Bharti Airtel shares rallied 6 percent despite the company posting a consolidated loss of Rs 2,866 crore for the quarter ended June 2019, as India wireless business reported better-operating numbers than its peer.

Shares of Coffee Day Enterprises fell 10 percent on August 2, falling below Rs 100 level for the first time since getting listed on October 2015. The stock plummeted over concerns about the company's debt levels, which came to light after the sudden demise of founder VG Siddhartha on July 29.

Adlabs Entertainment rose 3 percent even though the company extended losses in the Q1. The loss for the quarter ended June 2019 stood at Rs 32.47 crore against loss of Rs 20.92 crore in the corresponding quarter last year.

Shares of Ashok Leyland touched a 52-week low of Rs 63.90, down 6 percent after the commercial vehicle manufacturer reported weak sales numbers for July 2019.

Eicher Motors rose 2 percent despite weak July sales. The company has reported a 22 percent fall in its Royal Enfield July sales at 54,185 units versus 69,063 units in July 2018.

Global Updates:

European markets lost up to 2 percent on August 2 after as US President Donald Trump’s warning of 10 percent tariff on remaining $300 billion worth of Chinese imports from next month.

Asian markets also reacted negatively as Shanghai Composite declined 1.41 percent at 2,867.84, Kospi shed 0.95 percent at 1,998.13 and Nikkei fell 2.11 percent to 21,087.16.

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First Published on Aug 2, 2019 05:01 pm
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