Post Session: Quick Review

Extending their northbound journey to fifth straight session, Indian equity markets accumulated gains of around quarter of a percent, which lifted Sensex and Nifty higher above the psychologically crucial 25,700 and 7,650 levels respectively. Unlike, the trend seen in previous four trading sessions, not much of buying was witnessed in the last hour of trade, rather selling pressure which was witnessed in the last hour of trade mainly halved markets’ gains and dragged benchmarks to day’s low point as much of market-participants triggered profits at higher levels. Nevertheless, it was a broadly positive session of trade, wherein broader indices outperformed frontline indices by quite a good of a margin, with both Midcap and Small-cap indices settling higher with gains in the range of 0.55%-0.85%.

On the global front, Most Asian stock markets settled higher on Monday as investors set aside geopolitical concerns for the moment to focus on the generally upbeat flow of U.S. corporate earnings ahead of a host of results due this week. On the flip side, European stock markets fell across the board on Monday, concerned by an escalation in tensions between Russia and the West and reports the Ukrainian army was moving on a major rebel stronghold. The step up in rhetoric over Russia's involvement following last week's downing of a Malaysian air-liner had offered hope for some investors that stronger action by Western powers could push the conflict toward a peaceful conclusion.

Closer home, slew of better than expected corporate earnings and good monsoon reports mainly kept the markets sentiment upbeat for yet another session. On the earnings front, shares in Reliance Industries rose over 2% to Rs 1003 after it reported better-than-expected quarterly profit in its first quarter. Its consolidated net profit increased 13.7% year-on-year to Rs 5,957 crore, bolstered by over 27% y-o-y increase in its oil and gas revenue and higher refining margin. Additionally, Housing Development Finance Corporation (HDFC) too rallied over 2% after the company’s standalone profit for the quarter ended 30 June rose 14.62% to Rs.1,344.66 crore from Rs 1,173.10 crore in the corresponding period a year ago.

Meanwhile, latest weather reports which suggested of monsoon deficit coming down by 31% with rains picking up in July across the country, also buttressed the sentiment. Sectorally, while stocks from FMCG, Consumer Durables and Oil & Gas counters were the major pillars of markets’ strength, those from Realty, Capital Goods and Metal counters were the weak links of trade.  The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1693: 1265, while 107 scrips remained unchanged. (Provisional)

The BSE Sensex gained 43.09 points or 0.17% to settle at 25684.65. The index touched a high and a low of 25861.15 and 25677.77 respectively. 14 stocks gained against 16 declines on the index. (Provisional)

The BSE Mid cap and Small cap indices ended in red, while the BSE Midcap was up by 0.50%, the BSE Small cap index was higher by 0.80%. (Provisional) 

On the BSE sectoral front, FMCG was up by 1.04%, Oil and Gas up by 0.32% and Consumer Durables gained 0.49% were the few gainers, while Realty down by 1.09%, Capital Goods down by 0.89%, PSU down by 0.66%, Infrastructure was down by 0.52% and Metal down by 0.35% were the major losers in the space. (Provisional)

The top gainers on the Sensex were HDFC up by 2.44%, RIL up by 1.99%, ITC up by 1.35%, Axis Bank up by 1.00% and HUL was up by 0.96%. On the flip side, Tata Power down by 1.99%, SBI down by 1.74%, Gail India down by 1.53%, Infosys down by 1.42% and BHEL down by 1.28% were the major losers. (Provisional)

Meanwhile, Finance Minister Arun Jaitley has stated that the recapitalisation to the tune of Rs 2.4 lakh crore in public sector banks to meet Basel III norms is a high priority item for the government. Finance Minister added that the government will make a plan for recapitalising of public sector banks over the next four years and capital would be raised by the banks without diluting the government stake below 51 percent.

Earlier in March 2014, the Reserve Bank of India (RBI) had extended deadline for banks to implement global capital norms, Basel III, by a year to March 2019 amid concerns over the asset quality and profitability of the banks. Indian banks will now align full implementation of Basel III norms closer to the internationally agreed date of January 1, 2019. However, the central bank issued more strict norms for Indian banks as compared to Basel Committee on Banking Supervision (BCBS). Under Basel III, total capital (Tier 1 and Tier 2) of a bank in India must be at least 9 per cent of risk weighted assets (RWAs) while, the BCBS requirement is minimum 8 per cent of RWAs.

However, to be in line with Basel-III norms, there is a requirement to infuse Rs 2,40,000 crore as equity in India’s public sector banks. Finance Minister Arun Jaitley said that the capital of these banks will be raised by increasing the public shareholdings in a phased manner through sale of shares largely via retail to common citizens of this country. Citizens of India will get direct shareholding in these banks, which currently they hold indirectly.

India VIX, a gauge for markets short term expectation of volatility rose 0.86% at 15.09 from its previous close of 15.09 on Friday. (Provisional)

Meanwhile, Finance Minister Arun Jaitley has stated that the recapitalisation to the tune of Rs 2.4 lakh crore in public sector banks to meet Basel III norms is a high priority item for the government. Finance Minister added that the government will make a plan for recapitalising of public sector banks over the next four years and capital would be raised by the banks without diluting the government stake below 51 percent.

Earlier in March 2014, the Reserve Bank of India (RBI) had extended deadline for banks to implement global capital norms, Basel III, by a year to March 2019 amid concerns over the asset quality and profitability of the banks. Indian banks will now align full implementation of Basel III norms closer to the internationally agreed date of January 1, 2019. However, the central bank issued more strict norms for Indian banks as compared to Basel Committee on Banking Supervision (BCBS). Under Basel III, total capital (Tier 1 and Tier 2) of a bank in India must be at least 9 per cent of risk weighted assets (RWAs) while, the BCBS requirement is minimum 8 per cent of RWAs.

However, to be in line with Basel-III norms, there is a requirement to infuse Rs 2,40,000 crore as equity in India’s public sector banks. Finance Minister Arun Jaitley said that the capital of these banks will be raised by increasing the public shareholdings in a phased manner through sale of shares largely via retail to common citizens of this country. Citizens of India will get direct shareholding in these banks, which currently they hold indirectly.

The CNX Nifty ended higher by 20.30 points or 0.26% to settle at 7,684.20. The index touched high and low of 7,722.10 and 7,674.00 respectively. 25 stocks ended in the green against 25 stocks ending in red. (Provisional)

The major gainers of the Nifty were Indusind Bank up by 3.44%, Asian Paints up by 2.51%, HDFC up by 2.21%, RIL up by 1.97% and ACC was up by 1.78%. On the flip side, the key losers were DLF down by 2.94%, Tata Power down by 2.03%, GAIL down by 1.99%, IDFC down by 1.98% and BHEL down by 1.86%. (Provisional)

European markets were trading in red; UK’s FTSE 100 down by 0.28%, Germany’s DAX was down by 0.63% and France’s CAC 40 was down by 0.28%.

The Asian markets concluded Monday’s trade mostly in red, while Japan’s Stock Exchange was closed today on account of ‘Japan - Marine Day’ holiday. Chinese brokerages, undeterred by the worst performance among the world’s major stock markets, are seeking to raise more than $6.2 billion from initial public offerings as capital constraints squeeze their operations. The number of Chinese cities registering month-on-month decline in home prices rose to 55 in June from 35 in May as the country’s housing market continued to cool down. Prices were flat in seven cities last month and gained in eight. On a year-on-year basis, home prices rose in 69 of the 70 cities in June, the 14th consecutive month with one city’s housing price falling. In Hong Kong, the Quarterly Business Tendency Survey has found that 17% of the senior management of 560 prominent companies expect their business situation to improve this quarter over the second quarter. The Census & Statistics Department stated that 11% of respondents expect the business situation to worsen. The proportion of respondents expecting their business situation to remain unchanged increased from 69% to 72%.