Post Session: Quick Review

Narendra Modi government’s maiden budget’s session mainly turned to be roller-coaster ride for Indian equity markets, which after showing a smart recovery in the afternoon deals, yet again slipped sharply into negative territory in the last hour of trade mainly on account of profit-booking by market-participants at higher levels tailing negative European counterparts.

While, slipping in red in a knee jerk reaction to the announcements made by the Union Budget in the first hour of trade, markets showed drastic recovery in the second half after Finance Minister fired all cylinders to bolster growth by reviving the manufacturing and the infrastructure sector. The Finance Minister, who courageously retained the 4.1% fiscal deficit target for FY15, announced steps to strengthen investor confidence improve fiscal situation and boost growth. Nevertheless, lack of proper-roadmap on retrospective taxation and hope of workable solution for GST issue this year, turned out to be bit of worry for investors. By close of trade, while Sensex and Nifty nursing losses of over half a percent, settled sub psychologically crucial 25,300 and 7,550 levels respectively. However, broader indices showing a degree of outperformance, settled with gains of over half a percent.

On the global front, Asian stocks rose on Thursday after the Federal Reserve indicated it was in no rush to end quantitative easing and begin raising interest rates. The reaction of risk assets and currencies to Chinese trade data, however was limited as the performance of the global powerhouse improved but still fell short of expectations. On the flip side, European shares extended losses on Thursday, weighed down by heavy falls in southern indexes after weak economic data from Italy and mounting concern about the financial health of Portugal's largest listed bank.

Closer home, while most of the sectoral indices on BSE settled into negative territory, stocks from Realty, Infrastructure, Power and FMCG counters were the pillars of strength. On the flip side, stocks from Consumer Durables, Banking and Auto counters emerged as the major pockets of weakness. While, pass through status of REITs power Real Estate stocks, absence of mention of re-capitalizations for banks triggered selling in banking pivotal.

Among budget impacted stocks, while cement stocks, like Ultratech Cement, ACC and Ambuja Cement firmed up as FM announced to give Rs 7,060 crore to develop 100 smart cities, Textile stocks sprang to life after Finance Minister allocated Rs 200 crore for 6 more textile clusters in Rae Bareily, Lucknow,Surat, Bhagalpur. Additionally fertilizer stocks also hogged a lot of limelight after FM proposed to formulate new urea policy. Urea is widely used in fertilizers as a convenient source of nitrogen. Urea is also an important raw material for the chemical industry.

The BSE Sensex settled at 25372.75, down by 72.06 points or 0.28% after trading in a range of 25117.00 and 25920.46. 13 stocks advanced against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; while BSE Mid cap index was up by 0.60%, Small cap index rose 0.76%.(Provisional)

On the BSE sectoral front, Realty up by 4.96%, INFRA up by 1.97%, Power up by 1.12%, Metal up by 0.94%, PSU up by 0.39% were the top gainers, while, Consumer Durables down by 3.11%, Auto down by 0.91%, IT down by 0.89%, TECK down by 0.87%, Bankex down by 0.63% were the top losers. (Provisional)

The top gainers on the Sensex were Hindalco up by 3.16%, Tata Power up by 2.72%, GAIL India up by 1.54%, Coal India up by 1.50% and HDFC up by 0.91%. On the flip side, Hero MotoCorp down by 3.99%, TCS down by 2.06%, Bharti Airtel down by 1.71%, Mahindra & Mahindra down by 1.44% and SBI down by 1.31% were the top losers.

Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) has approved four- and six-laning of highways in five states. Total cost of these projects would be about Rs 13,987 crore and will cover length over 676 kilometres in states of Uttar Pradesh, Rajasthan, Delhi, Kerala and Andhra Pradesh.

Project wise, the 95.38-km long four laninig project in Ambala-Kaithal section of NH 65 in Haryana will be undertaken at a cost of about Rs 1,176.48 crore. Likewise, four-laning of Yadgiri-Warangal section of NH 163 project in Andhra Pradesh will be done. After the completion of this phase, the Hyderabad and Warangal stretch covering a total length of 99.10 km will be developed into four-lane at a cost of around Rs 1,487.95 crore. Further, four-laning of Sultanpur-Varanasi section of NH 56 in Uttar Pradesh, spreading over 146.22 km, will also be completed at a cost of about Rs 1,975.83 crore. The CCEA also approved development of 26.79 km long four-laning of the Kazahakkottum-Mukkola section of National Highway (NH) 47 in Kerala at an approximate cost of Rs 587.49 crore. It also approved four-laning of 159.30-km long Bikaner-Falodi section of NH 15 in Rajasthan at an estimated cost of Rs 903.40 crore.

Further, construction of connected roads having length 150.14 km would be undertaken on Delhi-Meerut expressway. Total cost of the project would be around 7,855.87 crore and will develop six- to eight-laning of NH 24 (Hapur bypass), six laning of NH 58 (Delhi-UP border) and six-laning of NH 235 (Delhi-UP).

India needs widespread highway infrastructure to prevent the sector from becoming hurdle to its economic growth. During FY14, the NHAI has managed to award around 2,000 km of road projects as against the set target of 9,000 km, while in FY13 only 1,116 km of projects were awarded against a target of 9,500 km. Financial constraints, delay in land acquisition and environmental clearances and lack of project planning are the leading factors impacting road infrastructure development in the country.

The CNX Nifty settled at 7567.75, down by 17.25 points or 0.23% after trading in a range of 7479.05 and 7731.05. There were 25 stocks advancing against 24 stocks declining on the index. (Provisional)

The top gainers on Nifty were DLF up by 9.02%, IDFC up by 8.68%, Hindalco up by 3.34%, Tata Power up by 2.97% and United Spirits up by 2.25%. On the flip side, Hero MotoCorp down by 3.89%, Tech Mahindra down by 2.22%, Bharti Airtel down by 2.18%, TCS down by 1.93% and SBI down by 1.42% were the top losers. (Provisional)European markets were reeling under pressure; with Germany’s DAX sliding by 1.51%, France’s CAC 40 index plunging by 1.43% and United Kingdom’s FTSE 100 declining by 0.86%.

The Asian markets concluded Thursday’s trade in green, with Indonesian stocks rising to a one-year high and the rupiah touching the strongest level in seven weeks after Joko Widodo stated that unofficial counts at polling booths showed him winning presidential race. The Confidence among China’s bankcard owners climbed in the past month due to relatively strong travel demand. The Bankcard Consumer Confidence Index climbed 0.56 in June from a month ago to 85.27 points as expenditures on dining, entertainment and travel picked up ahead of the summer. Chinese Trade Balance fell to 31.60B, from 35.92B in the preceding month.

Bank of Korea, South Korea’s central bank, downgraded its 2014 growth outlook to 3.8% from an earlier forecast of 4%, citing the delayed recovery of consumer sentiment caused by the deadly ferry disaster. The BOK froze its benchmark interest rate for 14 straight months in July, but it was not a unanimous decision. The top central banker made dovish comments due to worries about the delayed recovery. The BOK raised concern that downside risks prevailed over the upside risks in the economy’s future growth path, citing the prolonged weakening of sentiment among consumers and companies as well as rising volatility in the won/dollar exchange rate. 

Japanese Household Confidence rose to a seasonally adjusted annual rate of 41.1, from 39.3 in the preceding month while Japan’s Core Machinery Orders fell to -19.5%, compared to -9.1% in the preceding month. Japan’s Corporate Goods Price Index rose to a seasonally adjusted annual rate of 4.6%, from 4.4% in the preceding month. Japanese tertiary industry activity index rose to a seasonally adjusted 0.9%, from -5.4% in the preceding month. Malaysian Industrial Production rose to a seasonally adjusted annual rate of 6.0%, from 4.2% in the preceding month. Philippines Industrial Production rose to a seasonally adjusted annual rate of 13.8%, from 12.9% in the preceding month whose figure was revised up from 12.8%.