Post Session: Quick Review

After taking a pause in previous trading session, local equity markets yet again resumed its record breaking run on Friday and accumulated gains of around half a percent on account of hectic buying activities witnessed in the last hour of trade as investors piled up position in the run-up to budget, which is scheduled to be presented on July 10. Hopes that new government would present a pragmatic budget that would be focused on reducing fiscal deficit, boosting growth and reviving investment cycle, mainly underpinned investors to go long on risky equities. Buying also picked up after Finance Minister Arun Jaitley underscored that were was no cause to panic about the possibility of higher inflation, after a private forecasting agency said there was a 60 percent chance India would face a drought this year. 

The session turned out to be magnificent for barometer gauges, which after moving in a thin band for first half of the session and nose-diving into negative territory during afternoon deals, showcased a smart bounce-back in the dying hours of trade which sent benchmarks spiraling to day’s highest point. By close of trade, while Sensex concluded just shy off the crucial 26,000 level, Nifty ended well above the crucial 7750 mark, with gains of around half a percent. Meanwhile, broader indices too garnering buying interest, settled with gains in the range of 0.55%-0.85%. For the week, while Sensex and Nifty rallied over 3%, CNX Midcap index puffed up gains of around 5%, while BSE Smallcap index advanced over 4%.

On the global front, Asian markets concluded Friday’s trade mostly in red, with profit-taking wiping out early gains that came in response to a surge in US jobs in June and a record close on Wall Street. Meanwhile, European stocks paused for a breather on Friday after brisk gains since the start of July set key regional indexes on course for their biggest weekly gains in several months and close to major technical resistance levels.

Closer home, majority of the sectoral indices on BSE ended in green, while those from Oil and Gas, Realty and Infrastructure counters were the top gainers of the session, however stocks from Metal, Consumer Durables, and Capital Goods counters were the weak links of the trade. Besides, Railway shares edged higher ahead of the Railway Budget on July 8 on hopes of increase in government spending and reforms. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1668: 1373, while 124 scrips remained unchanged. (Provisional)

The BSE Sensex gained 138.31 points or 0.54% to settle at 25962.06. The index touched a high and a low of 25981.51 and 25659.33 respectively. Among the 30-share Sensex, 19 stocks gained, while 11 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.58% and 0.85% respectively. (Provisional) 

On the BSE sectoral front, Oil and Gas up by 1.67%, Realty up by 1.10%, Infrastructure up by 0.99%, Power up by 0.89% and Bankex up by 0.73% were the top gainers, while Metal down by 0.87%, Consumer Durables down by 0.36% and Capital Goods down by 0.27% were the top losers in the space. (Provisional)

The top gainers on the Sensex were RIL up 2.61%, HDFC Bank up by 2.31%, Dr Reddys up by 1.54%, GAIL up by 1.36% and NTPC up by 1.17%. On the flip side, the key losers were Wipro down by 1.55%, SSLT down by 1.50%, Tata Steel down by 0.68%, Hindalco down by 0.63% and Coal India down by 0.63%. (Provisional)

Meanwhile, Textiles Minister Santosh Gangwar has stated that the ministry will prepare the draft for new National Textiles Policy within the next 15 to 20 days. The current National Textile Policy 2000 was framed about 13 years ago. Therefore, there is a need to upgrade the existing policy as domestic textile industry has witnessed large scale modernisation and technological up-gradation in the last decade and faces new challenges.

The new policy aims to formulate a stable and fibre neutral raw materials guidelines to benefit the entire value chain and to address modernization and mechanization needs of the textile industry. The New Textiles policy also envisages enhancing the textile exports' market share globally from the current 4 percent and address concerns of adequate skilled work force, labour reforms. The new textile policy is also aimed to develop skilled work force, creating world class infrastructure for textile parks along with a conductive investment environment.

Textile industry plays significant role for economic development of the country in terms of net foreign exchange earnings, as well as through direct and indirect employment generation. Industry contributes around 4 percent to the gross domestic product (GDP), around 10 percent to the country’s export earnings and nearly 14 percent to industrial production besides providing direct employment to over 45 million people. The present market size of the industry stands at around $90 billion, which is expected to touch $220 billion mark by 2020.

India VIX, a gauge for markets short term expectation rose 1.96% at 18.15 from its previous close of 17.80 on Thursday. (Provisional)

The CNX Nifty rose 36.80 points or 0.48% to settle at 7,751.60. The index touched high and low of 7,758.00 and 7,661.30 respectively. Out of 50 stocks in Nifty, 26 stocks ended in the green and 24 in red. (Provisional)

The major gainers of the Nifty were Power Grid up 3.88%, RIL up by 2.80%, HDFC Bank up by 2.31%, Dr Reddys up by 1.51% and GAIL up by 1.39%. On the flip side, the key losers were ACC down by 2.17%, SSLT down by 1.75%, Wipro down by 1.71%, Jindal Steel down by 1.68% and Kotak Bank down by 1.48%. (Provisional)

European markets were trading in red; UK’s FTSE 100 down by 0.08%, Germany’s DAX down by 0.12% and France’s CAC 40 was down by 0.22%.

The Asian markets concluded Friday’s trade mostly in red, with profit-taking wiping out early gains that came in response to a surge in US jobs in June and a record close on Wall Street. A measure of expected fluctuations in Indonesian rupiah’s jumped to a four-month high as the race for the presidency tightened before next week’s election. Service activity in China’s state-owned enterprises grew at a slower pace in June but their private counterparts performed at their strongest in 15 months. The official non-manufacturing Purchasing Managers’ Index, compiled by the China Federation of Logistics and Purchasing which weighs toward state-owned enterprises, fell to 55 last month from 55.5 in May. Investment in Shanghai’s real estate market in the first six months slumped 14% year on year but the downturn is set to accelerate in the second half. The transaction value of all major real estate deals - those worth at least $10 million - in the January to June period was $15.7 billion, down from $18.3 billion in the first half of last year. Malaysian Trade Balance fell to 5.72B, from 8.90B in the preceding month. Philippines CPI rose to a seasonally adjusted annual rate of 0.4%.