Post Session: Quick Review

Monday’s session largely turned out to be disappointing for Dalal Street, which for four straight sessions in row registered losses on the back of heavy drubbing in select blue chip stocks, like ITC, HUL and Infosys that arrested any kind of uptrend at the start of F&O expiry week. Among the blue-chip stocks, ITC collapsed close to 6% on worries the government may raise taxes on cigarettes aggressively in the upcoming budget in July, Infosys was beaten down by close to 3%. Nevertheless, buying witnessed in last hour of trade minimized some losses on the bourses. By close of trade, while Sensex managed to shut-shop above the crucial 25,000 mark, with loss of over quarter of a percent, Nifty just ended shy off the psychological 7,500 level. However, broader indices outperformed larger peers with fat margins to end with gains of over 0.50%-0.65%. Nevertheless, prevailing positive sentiment after a steep hike in railway passenger and freight fares, which was seen as possibly the first installment of the 'tough measures' Prime Minister Narendra Modi had hinted at as necessary to revive the Indian economy, prevented any sharp slide.

On the global front, erasing early gains, Asia pacific shares ended mostly in red. These shares were up in early deals on upbeat news from China's factory sector which fuelled appetite for riskier assets mainly arrested. HSBC/Markit’s preliminary Chinese manufacturing survey reached a seven-month high of 50.8 for June, exceeding the 49.7 street and a final reading of 49.4 in May. Additionally, European shares fell early on Monday as downbeat readings of euro zone business activity revived worries over the pace of the economic recovery in the single currency bloc. Dampening expectations for a rebound in the euro zone's second-biggest economy, data compiler Markit said its composite purchasing managers index (PMI) of activity in France's manufacturing and services sectors slipped deeper into contraction territory in May.

Closer home, majority of the sectoral indices on BSE settled into positive territory despite sluggish session of performance. However, stocks from Fast Moving Consumer Goods, Information Technology and Consumer Durables counters turned out to be exceptions. On the flip side, stocks from PSU, Oil & Gas and Metal counters were the top gainers of the session. Metal shares gained on hopes of better demand after a preliminary HSBC survey showed activity in China's factory sector expanded in June for the first time in six months as new orders surged. In non-sectoral guage activity, sugar stocks were flavour of the session, with all stocks from Shree Renuka Sugars, Bajaj Hindustan, Balrampur Chini Mills, Triveni Engineering and Industries, Dhampur Sugar Mills and Oudh Sugar Mills registering gains of over 10% in otherwise subdued market after the government announced various measures to help the sector. In a sweet development for the sector, agriculture Minster Ram Vilas Paswan said the import duty on sugar has been increased to 40 per cent from 15 per cent earlier. He also underscored that the government will increase ethanol blending with petrol to 10 per cent from current 5 per cent. On the flip side, cement stocks lost ground after the government on Friday pushed through a steep 6.5 percent hike in rail freight effective June 25. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1556: 1391, while 125 scrips remained unchanged. (Provisional)

The BSE Sensex lost 74.19 points or 0.30% to settle at 25031.32. The index touched a high and a low of 25197.50 and 24878.66respectively. Among the 30-share Sensex, 22 stocks gained, while 8 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.63% and 0.56% respectively. (Provisional) 

On the BSE Sectoral front, PSU up by 1.57%, Oil & Gas up by 1.43%, Metal up by 1.13%, Auto up by 0.73% and Capital Goods up by 0.55% were the gainers while, FMCG down by 4.06%, IT down by 1.56%, Teck down by 1.12% and Consumer Durables down by 0.90%, were the few losers in the space. (Provisional)

The top gainers on the Sensex were ONGC up 5.15%, Hero MotoCorp up by 2.58%, BHEL up by 2.49%, Mahindra & Mahindra up by 1.67% and SSLT up by 1.66%. On the flip side, the key losers were ITC down by 5.92%, Infosys down by 2.49%, TCS down by 1.39%, Hindustan Unilever down by 1.30% and Wipro down by 1.17%. (Provisional)

Meanwhile, In a bitter medicine, which was necessitated to set right the faltering finances of the railways that were aggravated by UPA’s mismanagement of the economy, Modi led government approved a steep hike in the train fares and freight rates. With this, fares of all classes would be hiked by 14.20%, while the freight rates would go up by 6.50%, effective from June 25. Of the total, as much as 4.20% of the fare hike is on account of a variable Fuel Adjustment Component (FAC) approved in last year’s rail budget, remaining 10% is a flat hike across all classes. Similarly, freight rates too have 5% flat hike over and above a 1.4% of the FAC.

Further, this decision would help Indian Railways to mop up an additional Rs 8,000 crore in the financial year. In present scenario, Railways’ subsidy to passenger operations had touched Rs 26,000 crore and its ordinary working expenses have been mounting on account of fuel bill and salary.

However, Railway Minister Sadananda Gowda had sought Modii’s approval to roll out the unpopular move barely a couple of weeks before the government’s first rail budget. Gowda had also made a case for the hike to Finance Minister Arun Jaitley earlier this week.

This move besides being unpopular also was tricky one for Sadananda Gowda as the previous government prevented the proposal of this very hike to be rolled out on May 16, the day of the election results that brought in the regime change. The expected mop-up of around Rs 10,000 crore had already been factored in the interim budget passed in Parliament before elections. This was perhaps the reason behind the automatic hike that was taken by the Railways on May 16, but the same had be quickly withdrawn on account of former Railway Minister Mallikarjun Kharge’s objection.

India VIX, a gauge for markets short term expectation rose 0.61% at 18.96 from its previous close of 18.84 on Friday. (Provisional)

The CNX Nifty declined 12.15 points or 0.16% to settle at 7,499.30. The index touched high and low of 7,534.80 and 7,441.60 respectively. Out of 50 stocks in Nifty, 35 stocks ended in the green and 15 in red. (Provisional)

The major gainers of the Nifty were ONGC up 5.27%, Jindal Steel up by 2.95%, BHEL up by 2.76%, ACC up by 2.53% and Hero MotoCorp up by 2.34%. On the flip side, the key losers were ITC down by 5.42%, Kotak Bank down by 3.96%, MCDOWELL-N down by 3.44%, Infosys down by 2.57% and HCL Tech down by 2.07%. (Provisional)

European markets were trading in red; UK’s FTSE 100 down by 0.21%, Germany’s DAX down by 0.35% and France’s CAC 40 was down by 0.33%.

The Asian markets concluded Monday’s trade mostly in red, with Hong Kong’s index tumbling the most in three months amid concerns over slumping Chinese property prices, higher money-market rates and political tension between the city and the mainland. Indonesia’s bonds fell, pushing the 10-year yield to a three-month high, on speculation the prospect of increased government debt sales will prompt investors to seek higher returns on existing notes. Manufacturing activity in China expanded at the fastest pace in seven months in June, easing concerns over the outlook for growth in the world’s second largest economy. China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, rose to 50.8 in June from a final reading of 49.4 in May. 

Japanese businesses left behind this year as global equities rallied to a record found a winning strategy in buying back shares the rest of the world preferred to avoid. Foreign investors, which account for about 60% of market turnover, reduced holdings of Japanese shares in all but one month this year just as buybacks surged. Taiwanese Industrial Production fell to a seasonally adjusted annual rate of 5.19%, from 5.29% in the preceding month whose figure was revised up from 4.80%.