Benchmarks end near day’s high; bulls wake-up in late trade

Tuesday’s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of around one and a half percent. Hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending at intraday high levels, recapturing their crucial 25,500 (Sensex) and 7,600 (Nifty) bastions. Earlier, domestic bourses traded listlessly for most part of the day's trade near their previous closing levels as sentiments remained dampened on concern over rising crude oil prices. Report that foreign portfolio investors (FPIs) sold shares worth a net Rs 194.10 crore on June 16, 2014, too weighed down sentiments.

However, sentiments took U-turn in last hour of trade as market-participants opted to take positions in beaten down but fundamentally strong stocks. Some solace also came after Reserve Bank of India’s (RBI) Governor Raghuram Rajan reassured markets that India is better prepared to deal with external shocks than last year, when warnings by the U.S. Federal Reserve that it would scale back its monetary stimulus hit the rupee. Meanwhile, Finance Minister Arun Jaitley has attributed the rise in inflation partly to withholding of food stocks by traders and has said the Centre is committed to ease supply side bottlenecks and has also asked states to take firm measures against hoarders to check speculation.

Recovery in European counters too supported the sentiments. CAC, DAX and FTSE were trading in the green terrain in early deals, buoyed by hopes for mergers and acquisitions among healthcare companies and rebounding from losses caused by geopolitical concerns. Asian Markets too settled mostly in the green though the double-whammy of a deepening conflict in Iraq and a gas dispute between Ukraine and Russia kept the gains in check.

Back home, stocks from software and technology counters remained the flavor for yet another session on account of Rupee depreciation to two months low level as oil companies rushed to buy the greenback as escalating crisis in Iraq triggered concerns over inflation and current account deficit. Meanwhile, stocks of oil marketing companies viz. BPCL, HPCL and IOC too remained on buyers’ radar for second consecutive session after reports suggested of losses in diesel slipping to record low level of Rs 1.62 per litre. Additionally, fertilizer stocks rallied in the range on hopes of announcement of reforms for the sector in the upcoming budget to be presented by the new government.

The NSE’s 50-share broadly followed index Nifty ended higher by around a hundred points to end above its psychological 7,600 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex edged higher by over three hundred and thirty points to regain the psychological 25,500 mark. The broader markets too were trading in-line with benchmarks and ended the session with a gain of around one and a half percent. The market breadth remained in favour of advances, as there were 2047 shares on the gaining side against 952 shares on the losing side while 111 shares remain unchanged.

Finally, the BSE Sensex soared by 330.71 points or 1.31%, to 25521.19, while the CNX Nifty surged by 98.15 points or 1.30%, to 7,631.70.

The BSE Sensex touched a high and a low of 25545.88 and 25104.50, respectively. The BSE Mid cap index was up by 1.50%, while Small cap index gained 2.03%.    The top gainers on the Sensex were ONGC up by 4.07%, Axis Bank up by 3.79%, SBI up by 2.91%, Coal India up by 2.89% and BHEL up by 2.84%. On the flip side, the key losers were Mahindra & Mahindra down by 1.66%, Hero MotoCorp down by 0.83%, Dr Reddys Lab down by 0.58%, Hindustan Unilever down by 0.53% and Bajaj Auto down by 0.47%.

On the BSE Sectoral front, Oil & 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 only loser in the space.

Meanwhile, in order to ensure sound growth and orderly development of Indian pension market, pension funds regulator PFRDA has introduced new set of draft regulations for intermediary institutions. PFRDA has notified four regulations to govern and regulate the pension industry under the New Pension System (NPS). These norms deal with regulation for custodians, trustee bank, enquiry investigation appeal and adjudication and regulation for centralised record keeping agencies.

PFRDA has stated that the four norms would ensure an effective and credible use of inspection, surveillance and enforcement powers, investigation and implementation of an efficient compliance programme in tune with the spirit of PFRDA Act. Further, the pension fund regulator will also explore market-based solutions under the NPS based on contributory system for securing and protecting the old-age pension for citizens of the country. The watchdog has invited public comments on the draft regulations by July 15.

Pension funds regulator PFRDA has been taking various measure to develop Indian pension market as nearly 26 crore of the 32 crore of the country’s working population is working in unorganized/informal sector. Presently, these workers are not taking benefits of pension system. Meanwhile, PFRDA has set target to increase the current number of subscribers under new pension scheme from 68.48 lakh to cross 1.50 crore by FY15. It also wants to increase the size of the corpus, which is currently at about Rs.56,000 crore, to cross the mark of Rs.1,50,000 crore by the end of this fiscal.

The CNX Nifty touched a high and low of 7,637.60 and 7,509.25 respectively.

The major gainers of the Nifty were ONGC up by 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 Mahindra & Mahindra down by 1.34%, United Spirits down by 0.89%, Hero MotoCorp down by 0.82%, Hindustan Unilever down by 0.75% and Dr. Reddy's Laboratories down by 0.52%.

The European markets were trading in green, France's CAC 40 was up by 0.25%, Germany's DAX was up by 0.47% and United Kingdom's FTSE 100 was up by 0.12%.

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.