Post Session: Quick Review

After snapping five consecutive session’s losing streak in previous trading session, Indian equity markets added gains of over 1.20% on Wednesday, which lifted both Sensex and Nifty above the psychologically crucial 25,500 (Sensex) and 7,600 (Nifty) levels respectively. Markets, largely ignoring 11-month June trade deficit data, were turbo-charged by gains in the shares of property developers after the RBI unexpectedly extended the exemption on reserve requirements to bonds raised by banks, intended for affordable housing as part of the country's measures to boost the infrastructure sector. On the macro-front, however, with India’s imports shooting up by 8.33% to $38.24 billion, trade deficit widened to $11.76 billion, higher than $11.23 billion in May and $11.28 billion in the corresponding month of previous fiscal year.

Sentiments also were buttressed after reports suggested Met officials expecting steady rains for the rest of July, particularly in the parched regions of central and northwest India, which should somewhat ease worries over inflation, water scarcity and a sub-par kharif crop. Amidst across the board buying activities, broader indices too gathered momentum during the session and concluded with gains in the range of 1.25%-2.00%. Besides, positive domestic triggers, mostly positive global set-up also added to the upbeat mood of the bourses.

On the global front, Asian stocks held stubbornly steady on Wednesday after China reported better than expected economic growth, which confirmed the Asian giant had stabilized after a shaky start to the year but still left the global outlook cloudy, particularly given recent weakness in the euro zone. Additionally, European shares climbed Wednesday, boosted by better-than-expected growth data from China and a reassurance that the U.S. Federal Reserve is in no hurry to raise interest rates.

Closer home, all the sectoral indices on BSE settled in positive territory, nevertheless prominent gainers were stocks from interest rate sensitive Auto and Banking and Metal counters. While, Metal and mining stocks gained after the latest data showed that China's GDP growth accelerated to 7.5% in Q2 June 2014, from 7.4% in Q1 March 2014, banking stocks rallied for yet another session on rate cut hopes. Additionally, Shares of power finance companies also declined on worries competition to raise long-term bonds could push up long-term rates, too recovered by close of trade.

On earning front, Kotak Mahindra Bank rallied around 1.5% after bank’s net profit rose 6.69% to Rs 429.80 crore on 1.27% growth in total income to Rs 2686.11 crore in Q1 June 2014 over Q1 June 2013, while Federal Bank also garnered interest after reporting strong set of Q1 numbers. Private sector lender  Federal Bank reported strong earnings with the first quarter (April-June) net profit surging 108 percent to Rs 220.2 crore compared to Rs 105.7 crore in same quarter last year, aided by sharp fall in provisions and improvement in asset quality performance despite fall in other income. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1980: 967, while 98 scrips remained unchanged. (Provisional)

The BSE Sensex gained 321.07 points or 1.27% to settle at 25549.72. The index touched a high and a low of 25602.78 and 25246.75 respectively. Among the 30-share Sensex, 24 stocks gained, while 6 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 1.34% and 2.04% respectively. (Provisional) 

On the BSE sectoral front, Realty up by 4.28%, Bankex up by 2.50%, Metal up by 2.20%, Capital Goods up by 1.51% and Infrastructure up by 1.49% were the top gainers, there were no losers in the space. (Provisional)

The top gainers on the Sensex were ICICI Bank up 4.77%, Hindalco up by 4.56%, Axis Bank up by 4.03%, SSLT up by 4.01% and BHEL up by 3.90%. On the flip side, the key losers were Bajaj Auto down by 0.71%, TCS down by 0.43%, Cipla down by 0.22%, Dr Reddys down by 0.21% and Wipro down by 0.12%. (Provisional)

Meanwhile, India's services exports in the month of May increased by 8.8 percent to $13.9 billion. However, imports of services rose in double-digit at 15 percent to $8.03 billion during the month. Indian services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, represent around 60% share in the country’s GDP.

On cumulative terms, services exports during April-May stood at $27.5 billion, whereas cumulative imports were recorded at $16.09 billion. For the financial year 14, outbound shipments touched $312.35 billion, a 3.98% growth over the previous fiscal year, but below the set export target at $325 billion.

However, India’s overall imports during the FY14 declined by 8.11% to $450.95 billion as against $490.74 billion reported in the same period of previous fiscal year. Contraction in domestic import during FY14 was mainly driven by weak domestic demand and lower gold imports. With the remarkable double digit contraction witnessing in imports and growing country’s overall exports, India’s trade deficit during the financial year 2014 contracted significantly to $138.59 billion as compared to $190.34 billion in the FY13.

India VIX, a gauge for markets short term expectation slipped 0.12% at 14.65 from its previous close of 14.76 on Tuesday. (Provisional)

The CNX Nifty surged 112.55 points or 1.50% and concluded at 7,639.20. The index touched high and low of 7,640.10 and 7,532.45 respectively. Out of 50 stocks in Nifty, 45 stocks ended in the green and 5 in red. (Provisional)

The major gainers of the Nifty were IDFC up 8.93%, DLF up by 6.12%, ICICI Bank up by 5.05%, Hindalco up by 4.69% and Axis Bank up by 4.01%. On the flip side, the key losers were Bajaj Auto down by 0.86%, Asian Paints down by 0.43%, HDFC down by 0.12%, Ultratech Cement down by 0.09% and GAIL down by 0.04%. (Provisional)

European markets were trading in green; UK’s FTSE 100 up by 0.91%, Germany’s DAX up by 1.08% and France’s CAC 40 was up by 1.35%.

The Asian markets concluded Wednesday’s trade mostly in green, after China reported the world’s second-largest economy grew in line with the government’s target. China’s stocks fell for the first time in four days as concern that new share sales will divert funds from existing equities overshadowed data showing economic growth topped estimates and June home sales surged. China’s economic growth accelerated for the first time in three quarters after the government sped up spending and freed up more money for loans to counter a property slump. Gross domestic product rose 7.5% in the April-June period from a year earlier, compared with the 7.4% median estimate. June industrial production and first-half fixed-asset investment exceeded projections.

China’s home sales rose 33% in June from the previous month as price cuts by developers lured buyers. The value of homes sold climbed to 591.2 billion yuan ($95 billion) last month from 446.1 billion yuan in May. That was the biggest monthly gain this year. The value of sales in the first six months fell 9.2% to 2.56 trillion yuan from a year earlier. Industrial production in China rose 9.2% in June from a year earlier, topping the 9% median estimate and 8.8% in May. Retail sales increased 12.4% from a year earlier, compared with the 12.5% median estimate. Fixed-asset investment excluding rural households increased 17.3% in the first half from a year earlier.