Post Session: Quick Review

Local equity markets, after taking a breather in previous trading session, resumed its northbound journey and settled with gains of around four tenths of a percent, which took Sensex and Nifty above the psychologically crucial 25,550 and 7,640 levels respectively. Sustained buying activities by funds and retail investors on continued hopes of reforms and economic revival by the newly elected Narendra Modi government, mainly got markets back into positive territory after previous session’s drubbing against the backdrop of weak regional counterparts. Additionally, hopes of good macro-economic data likely offering some cheer for new Prime Minister Narendra Modi by showing a pick-up in industrial activity and easing inflation also bolstered sentiment. On the macro-front, Output from mines, utilities and factories is expected to have expanded 1.9 percent in April from a year earlier after falling 0.5 percent the previous month, May CPI is expected to ease. However, reports of monsoon being 48% below average levels in the week to June 11, reflecting the late onset of the annual rains over the southern Kerala coast, kept the gains in check. Meanwhile, the session also turned out to be yielding for broader indices, which went home with gains in the range of 0.35%-0.55%.

On the global front, Asian stocks fell on Thursday, with Japan leading the region lower as Tokyo was weighed by a stronger yen and Australia was weighed by poor employment data. In China, stocks were also lower ahead of a flurry of economic data due Friday--including industrial output figures and retail sales numbers. Meanwhile, most of the European shares advanced after falling yesterday from a six-year high, as investors awaited data on U.S. retail sales and jobless claims data to gauge the health of world’s economy.

Closer home, most of the sectoral indices contributed to bourses’ gains, however stocks from Infrastructure, PSU and Technology counters were the top losers on the index. On the flip side, stocks from Healthcare, Auto and Fast Moving Consumer Goods (FMCG) counters were the prominent gainers on the index. Besides, shares of public sector oil marketing companies (PSU OMCs) rose on reports the oil ministry was preparing a fresh proposal for the Cabinet to deregulate diesel price to reduce the government's fuel subsidy burden, upstream oil companies shares, viz ONGC and Reliance Industries, rallied on continued hopes of policy reforms in the sector by the newly elected PM, Narendra Modi. Meanwhile, fertilizer stocks, namely Rashtriya Chemicals & Fertilizers, National Fertilizers and Gujarat State Fertilizers also garnered lots of buyer’s interest. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1749:1357, while 83 scrips remained unchanged. (Provisional)

The BSE Sensex gained 102.32 points or 0.40% to settle at 25576.21. The index touched a high and a low of 25611.32 and 25409.69 respectively. Among the 30-share Sensex, 19 stocks gained, while 11 stocks declined. (Provisional)

The broader indices traded in-line with benchmarks and ended in the green; the BSE Mid cap index was up by 0.52% and Small cap index was up by 0.36%. (Provisional)

On the BSE Sectoral front, Healthcare up by 1.39%, Auto up by 0.60%, FMCG up by 0.46%, Realty up by 0.39% and Power up by 0.35% were the gainers while, Infrastructure down by 0.33%, PSU down by 0.20%, TECk down by 0.19%, Oil and gas down by 0.15% and Consumer Durables down by 0.02%, were the top losers in the space. (Provisional)

The top gainers on the Sensex were Hindalco up 3.72%, Sun Pharma up by 2.86%, HDFC up by 2.56%, HDFC Bank up by 2.43% and Maruti Suzuki up by 1.97%. On the flip side, the key losers were Bharti Airtel down by 3.92%, Axis Bank down by 1.97%, Coal India down by 1.72%, BHEL down by 0.77% and Infosys down by 0.64%. (Provisional)

Meanwhile, according to the International Monetary Fund (IMF), Indian economy is recovering to its potential growth rate at 6.75 to 7 percent. IMF's Senior Resident Representative Thomas J Richardson has said that increasing investment over the past few months is providing impetus to economy and potential growth rate could go up over time. However, the IMF does not see any immediate V-shaped recovery for India.

T J Richardson further stated that India need to contain high inflation, which has been impeding the business sentiments in the country. To strengthen economic growth, India should continue to gradually bring down the fiscal deficit and usher in fuel subsidy reforms. Further, IMF's Official said that it is important for India to continue the gradual process of bringing down fiscal deficit which will help reduce vulnerability to external shocks and make India more durable for international investors as well as for domestic investors. India's fiscal deficit is likely to contain at 4.5 percent of GDP in the financial year 14, as compared to 4.89 percent of GDP in the FY13. T J Richardson suggested that in order to bring down the fiscal deficit, India's government should implement subsidy reform in a way that it would not aggressively affect growth and broaden the tax base without adversely affecting business climate.

The IMF has projected the Indian economy's growth at 5.4 percent in the current financial year and pick up to 6.3 percent in the next fiscal. Presently, India's economic growth stayed below 5 percent for the second year in a row at 4.7 percent during FY14. The factors like high interest rates, low investments and slow execution of infrastructure projects have been impacting economy's growth.

India VIX, a gauge for markets short term expectation declined 0.79% at 16.92 from its previous close of 17.06 on Wednesday. (Provisional)

The CNX Nifty rose 23.05 points or 0.30% to settle at 7,649.90. The index touched high and low of 7,658.00 and 7,593.80 respectively. Out of 50 stocks in Nifty, 29 stocks ended in the green and 21 in red. (Provisional)

The major gainers of the Nifty were Hindalco up 4.09%, Sun Pharma up by 2.95%, Power Grid up by 2.80%, HDFC Bank up by 2.49% and HDFC up by 2.21%. On the flip side, the key losers were Bharti Airtel down by 4.31%, Axis Bank down by 1.86%, Bank of Baroda down by 1.83%, Coal India down by 1.81% and BPCL down by 1.10%. (Provisional)

European markets were trading in red; UK's FTSE 100 up by 0.18%, Germany's DAX up by 0.14% and France's CAC 40 was up by 0.29%.

The Asian markets concluded Thursday’s trade mostly in red, tailing cues from Wall Street where stocks ended weak overnight after the World Bank lowered its global growth forecast. Indonesia’s central bank will review interest rates today whereby Bank Indonesia is expected to keep its benchmark policy rate unchanged in order to maintain economic growth amid growing pressure on its exports. Japan’s currency held gains amid speculation that BOJ will refrain from expanding stimulus at a meeting that started today, after the European Central Bank introduced negative rates last week. Japan’s Core Machinery Orders fell to -9.1% compared to 19.1% in the preceding month.