Post Session: Quick Review

After witnessing correction in previous two trading session, Indian equity markets staged a smart recovery and accumulated gains of over 1.25%, which lifted both Sensex and Nifty higher above psychologically crucial 25,500 and 7,600 levels respectively on Tuesday. Much of the session’s gains were bargained by the bourses in the last hour of trade as market-participants scrambled to cover their pending short positions, with some of them also initiating fresh bets of select-blue chip stocks available at attractive valuations after recent drubbing. Initially, the benchmarks after wandering in no-man’s land for most part of the session, drifted lower in afternoon deals in absence of any positive trigger, which could lift the markets higher. Nevertheless, buoyed by the recovery of European counterparts, the Indian equity markets staged a smart recovery by close of trade and snapped two consecutive sessions’ losing streak. Meanwhile, broader indices also gaining in line with frontline indices went home with gains in the range of 1.50%-2.00%.

On the global front, Asian shares settled mostly positive, though the double-whammy of a deepening conflict in Iraq and a gas dispute between Ukraine and Russia kept the gains in check. Brent crude prices remained near nine-month highs after militants from the Islamic State of Iraq and the Levant (ISIL) group seized a large swathe of northern Iraq and threatened to capture a key oil refinery. The insurgent advance forced Washington to not only consider options for military action but also hold brief talks with Iran, its long-time foe, to support the besieged government in Baghdad. Meanwhile, European shares edged higher on Tuesday, boosted by hopes for mergers and acquisitions among healthcare companies and rebounding from losses caused by geopolitical concerns.

Closer home, in the stellar session of trade, where broad-based buying took place, only stocks from Fast Moving Consumer Goods counter acted as spoilsport. On the flip side, stocks from Oil & Gas, Public Sector Undertaking (PSU) and Banking counters were the top gainers of the session. In non-sectoral gauge activity, fertilizer stocks rallied in the range of 8%-10% on hopes of announcement of reforms for the sector in the upcoming budget to be presented by the new government. Besides, tyre stocks too were in top gear, with stocks of JK tyre and CEAT hitting 52 week high level during the session. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 2049:950, while 111 scrips remained unchanged. (Provisional)

The BSE Sensex gained 330.71 points or 1.31% to settle at 25521.19. The index touched a high and a low of 25545.88 and 25104.50 respectively. Among the 30-share Sensex, 23 stocks gained, while 7 stocks declined. (Provisional)

The broader indices too traded with traction and ended in the green; the BSE Mid cap index was up by 1.50% and Small cap index was up by 2.03%. (Provisional)

On the BSE Sectoral front, Oil and Gas up by 2.86%, PSU up by 2.74%, Bankex up by 2.28%, Infrastructure up by 2.01% and Capital Goods up by 1.93% were the top gainers while, FMCG down by 0.17%, was the lone loser in the space. (Provisional)

The gainers on the Sensex were ONGC up 4.34%, Axis Bank up by 3.99%, SSLT up by 3.33%, BHEL up by 3.11% and RIL up by 2.83%. On the flip side, the key losers were M&M down by 1.89%, Hero MotoCorp down by 0.79%, Dr Reddys down by 0.58%, HUL down by 0.52% and Bajaj Auto down by 0.34%. (Provisional)

Meanwhile, Steel Ministry’s latest report highlighted that Indian steel industry is likely to face raw material supply crunch in future. As per the report, concerns like environmental constraints, mining caps, inadequate infrastructure to move iron ore, and the strain on overall reserves could impact the raw material supply to domestic steel players.

Steel Ministry, in its report titled ‘Long-Term Perspectives for the Indian Steel Industry’ has projected that India’s iron ore demand will increase to 346 mt by 2025-26, assuming an 8 per cent growth in GDP. Thus, there is a need to relook at the policy framework to enable the domestic steel industry to capitalise domestic resources and turn it into a competitive advantage. The report further added that merchant iron ore mining industry will go for value addition and consume much of the iron ore themselves, which will complicate the supply line further and hit producers  particularly those having no captive mines and depend on small merchant markets.

Steel Industry’s report further noted that mega steel projects need to be set up in states like Jharkhand, Chhattisgarh and Odisha to take the country's production capacity of the metal to 300 million tonnes (MT) by 2025-26. Further, the country will have to work towards greater exploration, raising mining capacities and developing infrastructure, or else brace up for significant exports to achieve this ambitious capacity addition target, which can generate 3.15 lakh of direct employment. Currently, India's crude capacity for steel production is 96 MT per annum.

India VIX, a gauge for markets short term expectation declined 1.59% at 17.69 from its previous close of 17.98 on Monday. (Provisional)

The CNX Nifty rose 98.15 points or 1.30% to settle at 7,631.70. The index touched high and low of 7,637.60 and 7,509.25 respectively. Out of 50 stocks in Nifty, 39 stocks ended in the green and 11 in red. (Provisional)

The major gainers of the Nifty were ONGC up 4.43%, Axis Bank up by 3.99%, Asian Paints up by 3.94%, PNB up by 3.77% and Indusind Bank up by 3.61%. On the flip side, the key losers were M&M down by 1.34%, McDowell down by 0.89%, Hero MotoCorp down by 0.82%, HUL down by 0.75% and Dr Reddys down by 0.52%. (Provisional)

European markets were trading in green; UK’s FTSE 100 up by 0.18%, Germany’s DAX up by 0.49% and France’s CAC 40 was up by 0.10%.

The Asian markets concluded Tuesday’s trade mostly in green, with investors eyeing Federal Reserve’s policy meeting due to begin later in the day. China’s stocks fell, dragging the benchmark index down by the most in about a month, after foreign direct investment in the country unexpectedly declined. Foreign direct investment dropped 6.7% in May from a year earlier, the most since January 2013. Hong Kong Unemployment Rate remained unchanged at a seasonally adjusted 3.1% compared to the preceding month.

China’s Premier Li Keqiang stated that the country is confident that it will meet the growth target of 7.5% this year, noting the government was ready to adjust policies to guarantee the fulfillment of the target. New home sales in Shanghai remained below the 150,000-square-meter threshold for the fourth straight week, showing no sign for a major rebound. The purchases of new residential properties, excluding government-funded affordable housing, rose 26.4% week on week to 140,700 square meters during the seven-day period ended Sunday.