The Sensex ended with small gains, while the Nifty ended almost flat after a volatile trading session. Both these indices bounced back from the day's low in morning trade. Union Budget proposal to impose higher taxes on the super-rich, tax share buybacks and increase minimum public shareholding in listed companies continued to weigh on investors sentiment.

The Sensex rose 10.25 points or 0.03% to settle at 38,730.82. The index rose 93.66 points, or 0.24% at the day's high of 38,814.23. The index fell 284.70 points, or 0.74% at the day's low of 38,435.87.

The Nifty 50 index fell 2.70 points or 0.02% to settle at 11,555.90. The index rose 23.95 points, or 0.21% at the day's high of 11,582.55. The index fell 97.60 points, or 0.84% at the day's low of 11,461.

The broader market bucked trend. The S&P BSE Mid-Cap index rose 0.63%. The S&P BSE Small-Cap index rose 0.05%.

The market breadth was negative. On the BSE, 1178 shares rose and 1263 shares fell. A total of 161 shares were unchanged.

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 the sectoral indices on the BSE, the S&P BSE Realty index (up 2.81%), the S&P BSE Healthcare (up 1.81%) and the S&P BSE Energy index (up 1.77%) outperformed the S&P BSE Sensex. Meanwhile, the S&P BSE Consumer Durables index (down 6.76%), the S&P BSE Consumer Discretionary Goods and Services index (down 1.01%) and the S&P BSE IT index (down 0.98%) underperformed the S&P BSE Sensex.

Titan Company plunged 12.26% to Rs 1099.10. 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.

Bajaj Finance climbed 5.52%. 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.

State-run REC slumped 14.53% to Rs 137.05. The stock has fallen 18.11% in three trading sessions, from a recent closing high of Rs 167.35 on 4 July 2019.

The index maintenance sub-committee of NSE Indices decided to exclude shares of REC from the Nifty CPSE index effective from 15 July. The announcement was made yesterday, 8 July 2019.

Oil stocks were in demand. State-run Oil India rose 5.99%. State-run ONGC rose 0.33%. Index pivotal Reliance Industries rose 2.20%.

Among public sector oil marketing companies, Indian Oil Corporation (up 5.31%), HPCL (up 1.75%) and BPCL (up 0.03%), advanced.

In the commodities market, Brent crude for September 2019 settlement rose 59 cents at $64.70 a barrel. The contract fell 12 cents or, 0.19% to settle at $64.11 a barrel in the previous trading session.

Shares of IT companies fell. MphasiS (down 2.51%), HCL Technologies (down 1.65%), Hexaware Technologies (down 0.84%), Tech Mahindra (down 0.73%), Wipro (down 0.62%) and Infosys (down 0.29%), edged lower. Persistent Systems (up 0.12%), Oracle Financial Services Software (up 0.35%) and MindTree (up 0.58%),

IT major Tata Consultancy Services (TCS) declined 2.05% to Rs 2131.45. TCS announces its Q1 June 2019 result today, 9 July 2019.

HDFC Bank fell 1.20%. 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).

Hero MotoCorp rose 3.14%. 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 rose 0.71%. The company announced that it won an order from Bangladesh Army for supplying over 200 units of Tata Hexa four-wheel drive SUV.

HDFC fell 1.25%. 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.

Most pharmaceutical shares advanced. Sun Pharmaceutical Industries (up 5.28%), Piramal Enterprises (up 3.69%), Aurobindo Pharma (up 2.90%), Cadila Healthcare (up 2.74%), Wockhardt (up 2.38%), Strides Shasun (up 2.06%), Divi's Laboratories (up 1.7%), Cipla (up 1.71%) and IPCA Laboratories (up 0.63%), edged higher. Alkem Laboratories (down 0.08%) and GlaxoSmithKline Pharmaceuticals (down 1.26%), edged lower.

Dr. Reddy's Laboratories fell 0.11%. 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 2.58%. 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 rose 2.42% 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.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 68.62, compared with its close of 68.66 during the previous trading session.

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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