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After witnessing choppy trades in the post-noon trading session, the Indian equity markets registered healthy gains and closed the day on a firm note. This is as the polling began on UK EU referendum in Britain. Stocks from sectors such as banking, auto and finance were leading the gains.
On the global front, the Asian indices were trading on a mixed note. The Hong Kong's Hang Seng was trading higher by 0.35%, while Japan's Nikkei 225 was trading higher by 1.07%. The European indices witnessed most of the buying interest ahead of the UK referendum. The FTSE 100 was up 1.54%, France's CAC 40 was up 2.33% and Germany's DAX was up 2.29%. The rupee was trading at Rs 67.24 to the dollar at the time of writing.
Stocks in the textiles space closed the day on a mixed note with Vardhaman Holdings leading gains and Alok Industries leading the losses. As per a leading financial daily, the government has given approval for a special Rs 60 billion package for promotion of exports in textile and apparel sector. The approval is given in order to boost the competitiveness of the Indian garments sector globally.
The package is said to create one crore new jobs in the textile and apparel industry in three years. It is also said to attract investments of US$11 billion and generate US$30 billion in exports. Finance Minister Arun Jaitley on the matter stated that the package will help in realizing the true potential of employment generation in the textile and apparel sector.
The package includes a slew of measures such as additional incentives for duty drawback scheme for garments. It offers flexibility in labour laws to increase productivity as well as tax and production incentives for job creation in garment manufacturing. It also provides more flexible labour laws and financial incentives for the sector.
Under the package, the government has cleared the proposal to increase overtime hours for workers which are not to exceed 8 hours per week. These are in line with International Labour Organization norms and are included in order to bring in flexibility in labour laws.
Moreover, the government has announced that it will bear the entire burden of employers' contribution to the Employees' Provident Fund (EPF) scheme for new employees of the garments industry earning less than Rs 15,000 a month for the first three years. Also, the EPF has been made optional for employees earning less than Rs 15,000 per month.
These moves if executed properly, it will open up many avenues in the textile industry.
In another news update, Ciaz, the premium sedan car of Maruti Suzuki, has touched a milestone of 100,000 units in the domestic market. Reportedly, Ciaz has given tough competition to Honda City and has overtaken it in two of the first five months this calendar year.
The earlier products such as Kizashi and Grand Vitara were not that successful. Both these products had failed to deliver the desired volumes. However, the response from Ciaz has been quite overwhelming.
Further, the company has launched a mild hybrid variant of the Ciaz last September, which also benefitted from lower excise and government announced cash sops for buyers of hybrid vehicles.
Going forward, the response from new models like Vitara Breeza and Baleno will be the key things to watch out for. The stock ended the day trading higher by 0.4%.
Speaking about cars, Vivek Kaul has written an interesting article correlating car sales to black money. Click here to read this interesting piece.
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