Benchmarks log fresh record highs after a day of breather

Indian equity benchmarks, resuming their northward journey after a day of breather, scaled yet another lifetime closing high levels on Friday, which took Nifty above its crucial 7,750 mark, while Sensex surpassed the psychological 25,900 mark with gains of around half a percent. Earlier, markets witnessed sudden fall after a positive start and entered into red terrain as Finance Minister Arun Jaitley commented that concerns about the impact of Iraq crisis on crude oil prices remain despite moderation in oil prices in the last few days. But, barometer gauges showcased a smart recovery from intraday low levels as investors remained optimistic that new government would present a pragmatic budget that would be focused on reducing fiscal deficit, boosting growth and reviving investment cycle.

Sentiments also remained buoyed after industry body CII has hailed the government’s decision to extend validity period of industrial licence to three years, saying that it sends strong signal that the government is committed to enhance the ease of doing business in India. Also, the Finance Minister, Arun Jaitley, in his meeting with State Finance Ministers for GST implementation said that centre is ready to engage with the States with an ‘open mind’ on compensation issues.

On the global front, European markets made a sluggish start as data showed German manufacturing orders declined more than expected in May. Orders fell 1.7% from April, when they rose a revised 3.4%. Asian markets shut shop mostly in the 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.

Back home, sentiments remained up-beat after the Reserve Bank of India (RBI) relaxed overseas investment norms for Indian corporate by raising their borrowing limit. The RBI has enhanced the overseas direct investments (ODI) to 400 percent of a company's net worth from 100 percent for all companies. Meanwhile, stocks related to media services providers edged higher, as the Government is planning to introduce a new category of licence that will enable cable TV players and DTH operators to offer broadband services in the country. Additionally, shares of rail stocks remained on buyers’ radar after Prime Minister Narendra Modi assured that the government will modernize railway stations with proper facilities.

The NSE’s 50-share broadly followed index Nifty rose by over thirty points to end above the psychological 7,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by around one hundred and forty points to finish above the psychological 25,900 mark. Broader markets too traded neck-to neck with benchmarks and ended the session with a gain of over half a percentage point. The market breadth remained in favor of advances, as there were 1683 shares on the gaining side against 1,357 shares on the losing side while 125 shares remain unchanged.

Finally, the BSE Sensex surged by 138.31points or 0.54%, to 25962.06, while the CNX Nifty gained 36.80 points or 0.48%, to 7,751.60.

The BSE Sensex touched a high and a low of 25981.51 and 25659.33, respectively. The BSE Mid cap index was up by 0.58%, while Small cap index gained 0.85%.

The top gainers on the Sensex were RIL up by 2.47%, HDFC Bank up by 2.29%, Dr Reddys Lab up by 1.56%, Gail India up by 1.17% and Infosys up by 0.88%. On the flip side, the key losers were SSLT down by 1.74%, Wipro down by 1.46%, L&T down by 0.58%, Coal India down by 0.57% and Mahindra & Mahindra down by 0.55%.

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

Meanwhile, the Reserve Bank of India (RBI) has relaxed overseas investment norms for Indian corporate by raising their borrowing limit. The RBI has enhanced the overseas direct investments (ODI) to 400 percent of a company's net worth from 100 percent for all companies.

The RBI’s notification has highlighted that any financial commitment (FC) exceeding $1 billion or its equivalent in a financial year would require prior approval of the Reserve Bank even when the total FC of the Indian Party is within the eligible limit under the automatic route (within 400% of the net worth as per the last audited balance sheet).

Last year, RBI had reduced the ODI limit to 100 percent due to prevailing macro-economic situation mainly rupee depreciation. Rupee had depreciated to all-time low at 68.80 against the dollar August last year owing to high capital outflows by foreign institutional investors, amid concerns over the US fed tapering programme. The RBI's restriction was not applicable on public sector firms like Oil India and ONGC Videsh.

The CNX Nifty touched a high and low of 7,758.00 and 7,661.30 respectively.

The major gainers of the Nifty were Power Grid Corporation of India up by 3.88%, Reliance Industries up by 2.80%, HDFC Bank up by 2.31%, Dr. Reddy's Laboratories up by 1.51% and GAIL (India) 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 & Power down by 1.68% and Kotak Mahindra Bank down by 1.48%.

The European markets were trading in red France's CAC 40 was down by 0.19%, Germany's DAX was down by 0.11% and United Kingdom's FTSE 100 was down by 0.04%.

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%.