Benchmarks extend winning streak for third straight day

Extending their winning streak for third day in a row, Indian equity benchmarks ended the session with a gain of around half a percent. Sentiments remained up-beat on report that foreign portfolio investors (FPIs) bought shares worth a net Rs 1,288.16 crore on June 30, as per provisional data from the stock exchanges. Some jubilation also came on report that Business activity in Indian manufacturing sector expanded in June at its quickest pace since February driven by higher domestic and export order flows. The HSBC Manufacturing Purchasing Managers’ Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, rose to 51.5 in the month of June from 51.4 in May.

However, gains remained capped on report that output in eight important infrastructure industries, termed as the core sectors, grew at a four-month low of 2.3 per cent in May over a year before, compared to 4.2 per cent in April, with half of these seeing a contraction in production. At the same time, India’s fiscal deficit in the first two months of the 2014/15 financial year touched Rs 2.4 lakh crore, or 45.6% of the full-year target of Rs 5.28 lakh crore, much higher than the deficit of 33.3% during the comparable period in the previous fiscal year. 

Global cues remained supportive as European counters made a firm opening with CAC, DAX and FTSE were trading in the green in early deals on Tuesday. Asian markets too ended in the green terrain led by over a percent gains in Japanese market on report that large Japanese companies across all industries plan to increase capital spending by 7.4 percent this fiscal year.

Back home, sentiments got a fillip after public oil marketing companies hiked petrol price by steep Rs 1.69 per litre and diesel by 50 paise. Rally in auto sector too aided the sentiments on the back of better-than-expected sales numbers for the month of June. Maruti Suzuki registered jump of 33.50% in its total car sales (Domestic + Export) for the month of June 2014 at 112773 units, as against 84,455 units in June 2013, while M&M reported sales numbers which stood at 38471 units during June 2014 against 38092 units same month previous year. Moreover, shares related to capital goods counter continued their uptrend after a private survey showed that India’s manufacturing sector growth in June. Additionally, metal stocks edged higher as data showed China’s manufacturing expanded in June at the fastest pace this year. On the flip side, stocks related to software and technology counters retreated because of a weak growth forecast by Gartner.

The NSE’s 50-share broadly followed index Nifty gained by over twenty points to end above its psychological 7,600 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred points to end above its crucial 25,500 mark. The broader markets too traded jubilantly throughout the session and ended the session with a gain of around a percentage point. The market breadth remained in favour of advances, as there were 1,905 shares on the gaining side against 1,146 shares on the losing side while 108 shares remain unchanged.

Finally, the BSE Sensex surged by 102.57 points or 0.40%, to 25516.35, while the CNX Nifty gained 23.35 points or 0.31%, to 7,634.70.

The BSE Sensex touched a high and a low of 25571.90 and 25466.77, respectively. The BSE Mid cap index was up by 0.58%, while Small cap index gained 1.16%.

The top gainers on the Sensex were Hindalco Inds up by 6.76%, Maruti Suzuki up by 6.01%, Tata Motors up by 4.59%, Mahindra & Mahindra up by 4.03% and Tata Steel up by 2.47%. On the flip side, the key losers were TCS down by 1.20%, Wipro down by 1.16%, Sun Pharma down by 1.00%, HDFC down by 0.91% and Infosys down by 0.76%.

On the BSE Sectoral front, Auto up by 3.24%, Metal up by 2.03%, Capital Goods up by 1.27%, Realty up 1.03% and Consumer Durables up by 0.98% were the top gainers in the space, while IT down by 0.93%, Teck down by 0.55%, Oil & Gas down by 0.54%, Healthcare down by 0.38% and PSU down by 0.05% were the top losers in the space.

Meanwhile, marking the biggest increase in nine months, Petrol prices were hiked by a steep Rs 1.69 per litre as the crisis in Iraq spooked international oil and currency markets. Meanwhile, in continuation with the previous UPA government’s January 2013 policy of raising prices in small doses every month to wash-out the subsidy, diesel rates too were increased by 50 paise. With this hike, petrol in Delhi costs Rs 73.58 per litre, up Rs 2.02 from Rs 71.56 at present, while diesel rates have become costlier by 56 paise at Rs 57.84 per litre.

Despite diesel being hiked seventeen times so far, oil firms are losing Rs 3.40 on sale of each litre of diesel. Rather, losses have increased from Rs 2.80 a litre earlier this month due to firming up of international oil rates and the rupee depreciating against the US dollar. Besides diesel, the state oil firms lose Rs 33.07 a litre on kerosene sold through the public distribution system (PDS) and Rs 449 per 14.2-kg domestic subsidised LPG (cooking gas) cylinder.

Meanwhile, the combined impact of rupee depreciation and higher international gasoline prices rate has warranted an increase in petrol prices by Rs 1.69 per litre, excluding state levies. Globally, while international prices of gasoline (petrol) have increased by more than $4 per barrel, the rupee-US dollar exchange rate has also deteriorated. Though, oil marketing companies, which enjoy freedom to peg pump prices of petrol with international gasoline rates, wanted a steeper increase in petrol price, settled for Rs 1.69 litre hike this time due to political reasons.

The CNX Nifty touched a high and low of 7,649.50 and 7,618.15 respectively.

The major gainers of the Nifty were Hindalco Industries up by 6.67%, Maruti Suzuki India up by 5.93%, Tata Motors up by 4.89%, Mahindra & Mahindra up by 4.25% and Tata Steel up by 2.33%. On the flip side, the key losers were Tech Mahindra down by 1.97%, BPCL down by 1.85%, Asian Paints down by 1.64%, Wipro down by 1.54% and TCS down by 1.25%.

The European markets were trading in green France's CAC 40 was up 0.66%, Germany's DAX was up by 0.35% and United Kingdom's FTSE 100 was up by 0.52%.

The Asian markets concluded Tuesday’s trade mostly in green, with the regional index heading for a six-year high, driven by a rally in Japanese stocks after the Bank of Japan released its quarterly tankan business survey result. Although the survey showed deterioration in business sentiment following the recent sales tax increase, the market focused on data showing that large companies raised their combined investment plans for the financial year ending March to a 7.4% increase from a previous 0.1% rise forecast in the March survey. Japan’s Average Cash Earnings rose to a seasonally adjusted 0.8%, from 0.7% in the preceding quarter whose figure was revised down from 0.9%. Hang Seng was closed on account of Hong Kong Special Administrative Region Establishment Day.

China’s manufacturing expanded in June at the fastest pace this year. The Purchasing Managers’ Index was at 51, as per the National Bureau of Statistics and China Federation of Logistics and Purchasing. The final reading of a purchasing managers’ index from HSBC Holdings Plc and Markit Economics rose to 50.7 in June from 49.4 in May. South Korean Trade Balance fell to a seasonally adjusted 5.29B, from 5.30B in the preceding quarter. Thai CPI fell to a seasonally adjusted annual rate of 2.35%, from 2.62% in the preceding month. Indonesian Trade Balance rose to a seasonally adjusted 0.07B, from -1.97B in the preceding month while Indonesian Inflation fell to a seasonally adjusted 6.70%, from 7.32% in the preceding month.