Stocks
All main indices still looking weak – Thursday closing report
A close about 8,450 may lead to a further rally in Nifty
 
We had mentioned in Wednesday’s closing report that two benchmarks, NSE’s CNX Nifty and S&P BSE Sensex are to rise but the rally may be short-lived and that Nifty may meet with a resistance between 8,400 and 8,440. On Thursday, major indices in the Indian stock markets were range bound and recorded marginal gains. Nifty declined after hitting a high of 8,459 today. 
 
 
India Vix closed at 15.33, down 3.48%. NSE turnover was at 121.26 crore.
 
Clarity regarding P-Notes, the Indian government's push for reforms and the expiry of July derivative contracts, coupled with the US Fed's decision to keep interest rates intact, improved investor sentiments on Thursday.
 
The global and domestic developments helped the 30-scrip Sensex to close the day's trade up 142 points or 0.51%. The wider 50-scrip Nifty also made gains during the day's trade. It closed higher by 46.75 points or 0.56% at 8,421.80 points.
 
Sensex, which opened at 27,685.82 points, closed at 27,705.35 points -- up 141.92 points or 0.51% from the previous day's close at 27,563.43 points. It touched a high of 27,854.46 points and a low of 27,649.97 points in the intra-day trade.
 
According to market analysts, the Federal Reserve's statement that cited improvements in the US labour and housing markets reduced the chances of an interest rate hike for the year. 
 
If interest rates in the US are hiked, the FPIs (Foreign Portfolio Investors) are expected to be led away from emerging markets such as India.
 
Analysts pointed out that the news of the cabinet approving the GST (goods and services) bill that incorporates recommendations from a parliamentary panel also acted as a strong positive trigger.
 
The SIT appointed by the Supreme Court on black money had recommended that the participatory note, or P-Note, route of overseas funds investing in Indian stocks be stringently regulated. 
 
The rollover figure at the end of July's derivatives expiry stood at a modest 61.7%, one of the lowest in recent months. 
 
Sector wise, healthy buying was observed in fast moving consumer goods (FMCG), healthcare, banks, automobile, and realty stocks. 
 
However, information technology (IT), capital goods and technology, entertainment and media (TECK) sectors came under intense selling pressure.
 
The S&P BSE FMCG index zoomed by 212.76 points, the healthcare index was up by 127.22 points, banks index rose by 122.22 points, automobile index was higher by 50.41 points and the realty index was up by 45.34 points.
 
However, IT index fell by 84.57 points, capital goods index declined by 43.46 points and TECK index decreased by 33.57 points.
 
Major Sensex gainers during Thursday's trade were: Dr.Reddy's Lab, up 5.23% at Rs.3,907.55; Cipla, up 4.79% at Rs.710.10; ITC, up 3.90% at Rs.315.80; Hindustan Unilever, up 2.32% at Rs.920.45; and HDFC, up 1.96% at Rs.1,337.40.
 
The major Sensex losers were: Sun Pharma, down 1.89% at Rs.814.30; Hindalco Inds, down 1.60% at Rs.104.70, Infosys, down 1.48% at Rs.1,069.10; Tata Consultancy Services (TCS), down 1.08% at Rs.2,480.95; and Tata Steel, down 0.92% at Rs.248.35.
 
The top gainers and losers in the major indices are given in the table below:
 
 
Among the Asian markets, Japan's Nikkei was up 1.08%. However, China's Shanghai Composite Index lost 2.20% and Hong Kong's Hang Seng fell by 0.49%.
 
In Europe, the London FTSE 100 index was higher by 0.75%, the French CAC 40 was up by 0.45% and Germany's DAX Index was flat.
 
The closing values of the major indices in the Asian stock markets are given in the table below:
 

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Lack of reforms might derail growth: Moody's Analytics
Predicting a 7.6 percent growth rate for India, research firm Moody's Analytics on Thursday warned that the economic expansion might slow down due to lack of reforms.
 
The economic research and analysis firm's India forecast said that "The economy will likely expand 7.6 percent in 2015 thanks to lower interest rates. A lack of reforms could derail medium-to-long term growth prospects." 
 
The report, "India Outlook: Waiting for Reforms to Fuel Growth", said that "Green shoots are slowly emerging,but the government’s failure to deliver promised reforms is the major impediment."
 
Moody's Analytics's associate economist and author of the report Faraz Syed cited key reforms such as the land acquisition bill, flexible labour laws and the goods and services tax (GST) which have the ability to propel India's growth.
 
However, these key reform bills are still in parliament's ambit and the government has till now failed to create a consensus to get them passed. 
 
"Without a majority in the upper house, the ruling Bharatiya Janata Party’s power has 
been nullified and the opposition has blocked proposed reforms," the report said.
 
On the bright side the report predicts another interest rate cut by the Reserve Bank of India (RBI) this year. The decision, it informed, will be on the back of better rains, lower commodity prices and strong external balances. 
 
India Inc. has been demanding a rate cut as it believes that this may be the last time in this calendar year for RBI to ease lending before inflation spirals and the US Fed decides on its own rates in September.
 
The Indian monetary policy review by the RBI is scheduled for August 4.
 
"We expect at least one more benchmark rate reduction in 2015 to complement the 75 basis points already delivered this year," the report predicted.
 
"Accommodative monetary policy will lift GDP to 7.6 percent in 2015, increasing to 8 percent in 2016."
 
The economic research firm pointed out that tampering with the central bank’s independence would make it difficult to anchor inflation expectations and weigh on India's economic prospects, particularly financial market stability.
 
Recently, the government introduced a draft financial code which proposes to clip the RBI's wings.
 
The code, if implemented, will undermine RBI's ability to rein-in inflation. This will also discourage investors from taking risks in the future as the RBI is viewed by many as an anchor for financial stability in the country. 
 
"India’s monetary policy, with Governor Raghuram Rajan at the helm, has been effective. However, a recent draft bill could undo the RBI’s good work," the report elaborated.
 
"Moving to the new model would severely dent the RBI's’competency: credibility would be lower, politics would drive decisions, and transparency would be reduced." 

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Mexico taxi drivers step up pressure against Uber
Mexico City taxi drivers staged a protest against the recent approval to private transport services offered via smartphone apps, while police investigated attacks on Uber drivers in the past few hours.
 
Dozens of taxis gathered in the centrally located Paseo de la Reforma on Wednesday to protest the decision two weeks ago by the federal district to allow ride-sharing services like Uber and Cabify to operate.
 
The new regulations will be overturned because they have "no legal basis", Mexico City Organized Taxi Drivers Association spokesman Ignacio Rodriguez told EFE.
 
"There's not a single article in the mobility law or in the current transport regulations that establish a foundation for such an agreement," Rodriguez said, adding that the association planned to take legal action against the new rules.
 
The protest took place in the wake of attacks on several Uber vehicles on Tuesday.
 
Individuals armed with sticks, pipes and stones damaged the windows, windshields, bodies and tyres of several vehicles parked around the Mexico City International Airport.
 
The victims have filed complaints and "Uber is not saying that the taxi drivers' organisation had anything to do with it", but that it was "an attack by residents" of the area, federal district police chief Patricia Mercado said on Wednesday.
 
About 250 people attacked between seven and 12 vehicles, Mercado said, adding that police had not ruled out the possibility that some taxi drivers were involved.

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