Markets end at record high levels; Nifty surpasses 7,700 mark

Boisterous benchmarks once again showcased an enthusiastic performance, by rallying over a percentage point as budget euphoria gripped Dalal-Street on Wednesday. Sentiments remained up-beat since start as key bourses opened with huge gap on up-side and there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength, as investors continued their hunt for fundamentally strong stocks. Frontline indices not only extended their rally for fourth straight session but also recorded their all time closing high, settling comfortably above their crucial 7,700 (Nifty) and 25,800 (Sensex) bastions as investors took to hefty across the board buying.

Sentiments got bolstered after Finance Minister Arun Jaitley’s commented that ‘mindless populism’ in policymaking needed to be checked stoke expectations of a pragmatic budget on July 10. Additionally, sentiments also got a lift after FM underscored that a high fiscal deficit and inflation were major challenges for India, which in turn triggered hopes that he could unveil fiscal consolidation measures in his first annual budget. Sentiments also got buttressed after India Meteorological Department (IMD) in its daily monsoon report underscored that the southwest monsoon has further advanced into entire Uttarakhand, Himachal Pradesh and Jammu & Kashmir, some more parts of Uttar Pradesh and some parts of Haryana & Punjab.

Global cues too remained supportive with European markets trading higher in early deals with investors looking to see if US employment figures continue a run of upbeat data that has driven Wall Street to record highs. All the Asian markets shut-shop in green with some of the indices ending at their six-year high taking cues from the rise in Chinese manufacturing.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Some support also came on report that foreign institutional investors (FIIs) continue to bet big on the India story, with their net investment in Indian equities already surpassing the $10 billion mark in 2014. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 59.68 per dollar at the time of equity market closing against the Tuesday’s close of 60.07 on the Interbank Foreign Exchange on the back of heavy dollar-selling by custodian banks.

Rally in realty stocks too aided the sentiments on hopes of favorable announcements for the sector in the final Union Budget 2014-15 to be unveiled on 10 July 2014. Shares related to metal and mining counter too remained on buyers’ radar triggered by data showing that China’s manufacturing expanded in June at the fastest pace this year. Additionally, software stocks edged higher on positive economic data in US, the biggest outsourcing market for the Indian IT firms.

The NSE’s 50-share broadly followed index Nifty rose by over ninety points and ended above the psychological 7,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over three hundred and twenty points to finish above the psychological 25,800 mark. Broader markets traded with traction throughout the trade and ended the session with a gain of around a percentage point. The market breadth remained in favor of advances, as there were 1,907 shares on the gaining side against 1,157 shares on the losing side while 114 shares remain unchanged.

Finally, the BSE Sensex surged by 324.86 points or 1.27%, to 25841.21, while the CNX Nifty soared by 90.45 points or 1.18%, to 7,725.15.

The BSE Sensex touched a high and a low of 25864.53 and 25660.16, respectively. The BSE Mid cap index was up by 0.78%, while Small cap index gained 1.09%.

The top gainers on the Sensex were SSLT up by 4.44%, NTPC up by 3.00%, BHEL up by 2.75%, HDFC up by 2.71% and Maruti Suzuki up by 2.25%. On the flip side, the key losers were Gail India down by 0.28% and Infosys down by 0.10%.

On the BSE Sectoral front, Infrastructure up by 2.10%, Metal up by 2.01%, Power up by 1.93%, Healthcare up 1.88% and Capital Goods up by 1.67% were the top gainers in the space, while there were no losers in the space.

Meanwhile, the Food Ministry has pitched for approval to end the subsidy for raw sugar exports one year earlier. Food ministry has stated that the scheme is being availed only by a few sugar mills and therefore it has moved a note to cabinet to suspend the sugar export incentive scheme by September 2014.

Food Ministry further added that sugar mills in Uttar Pradesh are not getting benefited from the scheme despite the fact that sugarcane arrears are highest at Rs 7,200 crore in the state. Further, many mills have not shown adequate interest in the scheme as they had exported major quantity of sugar before the launch of the scheme in February.

In February 2014, the government has started the scheme to give a subsidy for export of raw sugar up to 4 million tonnes during 2013-14 and 2014-15 marketing years (October-September). As per the notification, the subsidy will be calculated every two months after taking into account the average exchange rate of rupee vis-a-vis the dollar. The government had fixed Rs 3,300 per tonne for February-March and Rs 2,277 per tonne for April-May, taking into account the dollar-rupee fluctuation. The new government had set the export subsidy at Rs 3,300 per tonne for June-July.

India is world's second largest sugar producer and biggest consumer of sugar. India’s sugar production is likely to be at 23.8 million tonnes in 2013-14, as against 25.1 million tonnes in the last year.

The CNX Nifty touched a high and low of 7,732.40 and 7,677.30 respectively.

The major gainers of the Nifty were SSLT up by 4.64%, NTPC up by 3.23%, BHEL up by 2.87%, Lupin up by 2.71% and Coal India up by 2.48%. On the flip side, the key losers were HCL Technologies down by 1.16%, Infosys down by 0.50%, PNB down by 0.47%, GAIL (India) down by 0.43% and Tech Mahindra down by 0.15%.

The European markets were trading in green France's CAC 40 was up 0.09%, Germany's DAX was up by 0.23% and United Kingdom's FTSE 100 was up by 0.33%.

The Asian markets concluded Wednesday’s trade in green, with the indices extending gains from a six-year high. Hong Kong stocks rose, with the benchmark index advancing to its highest close this year, after data showed China’s factory activity expanded at the fastest pace since December. The Hong Kong Monetary Authority, the city’s central bank, stepped in for the first time since December 2012 to prevent the city’s currency from rising against the US dollar, as demand rose on commercial activities. China’s stocks rose for a third day, capping the longest winning streak in three weeks, amid signs government efforts to arrest a slowdown are helping to stabilize the economy. South Korean CPI remained unchanged at a seasonally adjusted annual rate of 1.7%.

Indonesia’s trade balance has swung to a surplus in May, while inflation slowed in June, bolstering Bank Indonesia’s case for keeping its benchmark interest rate steady next week. The country recorded a trade surplus of $69.9 million in May, following a record deficit of $1.97 billion in April, as exports picked up and imports slowed. The consumer price index also eased to 6.7% last month from 7.3% in May. Last month’s inflation rate was the lowest since June 2013, when it stood at 5.9%.