Benchmarks continue to log fresh high; Sensex surpasses 26,100 mark

Monday’s session turned out to be a fabulous day of trade for the Indian equity markets, which scaled fresh highs for yet another session. Benchmark indices extended their previous session’s rally and hit fresh record high with Sensex surpassing 26,100 mark as pre-budget rally continued amid expectations that Finance Minister Arun Jaitley will announce measures in the Budget aimed at bolstering economic growth. Frontline gauges, after a positive start, traded in tight band through out the session, while buying in last leg of trade took the benchmark equity indices to-day’s high point.

Sentiments remained up-beat after FICCI’s Business Confidence index value climbing to a 14-quarter high of 69 in the current round, up from 60.8 in the previous survey. Sentiments were also buttressed on report that overseas investors have pumped in a staggering over $20 billion into the Indian market in the first half of the year, mainly on hopes of a stable and reform-oriented government at the Centre. Meanwhile, Finance Minister has said that there was no need for panic as country has enough food stocks.

On the global front, European counters were trading in the red in early deals amid a lack of trading cues and little economic news. The U.S. markets were closed on Friday for the Independence Day public holiday. Asian stocks exhibited mixed trend on speculation over when the Federal Reserve may hike interest rates, leaving investors devoid of any major catalysts after recent gains.

Back home, foreign portfolio investors (FPIs) bought shares worth a net Rs 943.19 crore July 4, 2014, as per provisional data from the stock exchanges. Rally in software and technologies counters too aided the sentiments on expectation of strong revenue growth during the recently (April-June) concluded quarter. Additionally, railway-related stocks remained on buyers’ radar for the second day in a row ahead of the Railway Budget on July 8. On the flip side, stocks of public sector oil marketing companies (OMCs) edged lower after Ministry of Petroleum and Natural gas clarified that it is not proposing any increase in prices of subsidised LPG and kerosene prices after certain media reports speculated about the possibility of increase in the prices of subsidised LPG and PDS Kerosene.

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 its psychological 26,100 mark. Broader markets too traded with traction and ended the session in the green with a gain of around half a percent. The market breadth remained in favor of advances, as there were 1,715 shares on the gaining side against 1,359 shares on the losing side while 102 shares remain unchanged.

Finally, the BSE Sensex surged by 138.02 points or 0.53%, to 26100.08, while the CNX Nifty gained 35.55 points or 0.46%, to 7,787.15.

The BSE Sensex touched a high and a low of 26123.55 and 25992.73, respectively. The BSE Mid cap index was up by 0.12%, while Small cap index gained 0.60%.

The top gainers on the Sensex were Tata Power up by 3.59%, Infosys up by 3.23%, TCS up by 3.06%, Tata Motors up by 2.20% and Dr Reddys Lab up by 1.95%. On the flip side, the key losers were HDFC Bank down by 1.90%, ONGC down by 1.60%, Gail India down by 1.08%, ICICI Bank down by 0.79% and SBI down by 0.62%.

On the BSE Sectoral front, IT up by 2.63%, Teck up by 2.16%, Infrastructure up by 1.41%, Power up 1.12% and Healthcare up by 0.80% were the top gainers in the space, while Bankex down by 1.21%, Oil & Gas down by 0.91%, PSU down by 0.22% and Realty down by 0.14% were the only losers in the space.

Meanwhile, Home Ministry has raised objections in allowing Foreign Direct Investment (FDI) in highly- sensitive areas of the Railways sector, citing that such a move may compromise security of the country's largest transportation network. The red flag was raised by the home ministry after Commerce and Industry Ministry circulated a draft cabinet note for inter-ministerial consultations proposing 100% FDI in areas such as high-speed train systems and dedicated freight lines.

The proposal of allowing 100% FDI in Railways sector was originally mooted by Department of Industrial Policy and Promotion (DIPP) under the Commerce and Industry Ministry, which believed that such a move would definitely help the cash starved railways sector to grow.According to Commerce Ministry, Railways sector is an imperative sector for driving India’s economic growth and has potential of lifting the GDP by over a percent. But, as per Home Ministry, FDI should not be allowed in highly sensitive parts of the railways as managing passengers and freight traffic and operations of trains is considered to be the most sensitive parts of the Indian Railways and by allowing FDI the country will be comprising on the security of its largest transportation network.

NDA’s maiden Rail Budget to be presented on July 8 will aim at a complete revamp and to improve the health of the cash-strapped Indian Railways, the largest mode of mass transport in the country. After the bitter pill of 14.2 per cent increase in the passenger fair last month, the budget is expected to focus on innovation, modernization, efficiency, punctuality, cleanliness, increased role of private sector and services features.

The CNX Nifty touched a high and low of 7,792.00 and 7,755.10 respectively.

The major gainers of the Nifty were IDFC up by 6.01%, Sun Pharmaceuticals Industries up by 4.25%, Tata Power Company up by 3.45%, TCS up by 3.30% and Infosys up by 2.98%. On the flip side, the key losers were IndusInd Bank down by 2.19%, HDFC Bank down by 1.98%, UltraTech Cement down by 1.88%, BPCL down by 1.73% and ONGC down by 1.54%.

The European markets were trading in red France's CAC 40 was down by 0.35%, Germany's DAX was down by 0.16% and United Kingdom's FTSE 100 was down by 0.19%.

The Asian markets concluded Monday’s trade mostly in green, with Chinese stock closing flat in quiet trade as investors await the release of Chinese economic data later in the week. Indonesia’s rupiah gained the most since December as local stocks rallied on speculation investors are positioning for Joko Widodo to win next week’s election after he performed strongly in the final leaders’ debate. IMF chief Christine Lagarde stated that global economic activity should strengthen in the second half of the year and accelerate in 2015, although momentum could be weaker than expected, hinting at a slight cut in the fund’s growth forecasts. Lagarde estimated that growth in China this year would be between 7% and 7.5%. Japan’s index of leading economic indicators rose to a seasonally adjusted 105.7.Taiwanese Trade Balance fell to a seasonally adjusted annual rate of 1.89B, from 5.29B in the preceding month. Philippines CPI rose to a seasonally adjusted annual rate of 0.4%, from 0.5% in the preceding quarter.