Post Session: Quick Review

The extremely volatile session of trade turned out to be seventh straight session of gains for Dalal Street on Wednesday, whereby benchmarks once giving impression of a red close, bounced-back smartly, clocking all time closing high levels. Aggressive buying which took place in the last hour of trade sent equity markets spiraling higher near record high levels, which led both Sensex and Nifty ending just shy of the crucial 26,150 and 7,800 levels respectively, with gains of around three tenths of a percent. However, session turned out to be harsh for broader indices, which failed to garner any gains, with BSE Smallcap index settling with a cut of over 0.60% and Midcap index closing just about flat, though with positive bias.

In the extremely choppy session of trade, where traders used every ‘dip’ as an opportunity to buy fundamentally strong blue chip-stocks, every bout of selling pressure was reciprocated with recovery. Sustained buying activities by funds and retail investors on the back of positive global set-up, mainly supported the uptrend of markets.

On the global front, Asia-pacific shares gained on Wednesday with mining firms in Australia leading that index higher. Additionally, European equities edged higher in early trade on Wednesday, extending gains from Tuesday after a batch of positive earnings and U.S. economic data briefly calmed worries over stretched valuations and the pace of economic recovery.

Closer home, sectorally, Information Technology, Consumer Durables and Banking counters chiefly supported the uptrend of markets, while those from Metal, Infrastructure and Healthcare counters were the weak links of trade. Banking stocks gained ground on Wednesday after the Reserve Bank of India (RBI) unveiled a new framework for identifying and dealing with large banks in the country, termed domestic systemically important banks (D-SIB), which basically would be too big to fail and allowing its failure would cause a crisis in the financial system. Meanwhile, gold loan-companies too hogged some limelight after the Reserve Bank of India (RBI) relaxed the one lakh rupees ceiling on loans against gold jewellery. On the flip side, PSU pivotal lost ground after Finance Minister, Arun Jaitely asserted that four public sector companies, which cannot be revived would be shut down. The market breadth on the BSE remained in the favour of decliners; advances and declining stocks were in a ratio of 1330:1639, while 96 scrips remained unchanged. (Provisional)

The BSE Sensex gained 121.53 points or 0.47% to settle at 26147.33. The index touched a high and a low of 26188.64 and 26000.40 respectively. 17 stocks gained against 13 declines on the index. (Provisional)

The BSE Mid cap and Small cap indices ended mixed, the BSE Midcap was up by 0.01%, while the BSE Small cap index was lower by 0.63%. (Provisional) 

On the BSE sectoral front, IT was up by 2.24%, TECk up by 1.74%, Consumer Durables up by 0.37%, Bankex up by 0.24% and Oil and Gas up by 0.14% were the top gainers, while Metal down by 0.39%, Infrastructure down by 0.34%, Healthcare down by 0.17%, Power down by 0.14% and PSU down by 0.13% were the major losers in the space. (Provisional)

The top gainers on the Sensex were Infosys up by 3.37%, Hindalco up by 2.36%, TCS up by 2.09%, Wipro up by 1.93% and Hero MotoCorp was up by 1.66%. On the flip side, Tata Power down by 1.29%, Tata Steel down by 1.09%, Gail India down by 1.01%, ONGC down by 0.95% and Maruti Suzuki down by 0.95% were the major losers. (Provisional)

Meanwhile, borrowings by Indian companies from overseas markets declined by 3.1 percent to $1.89 billion in June 2014 from $1.95 billion recorded in same month of previous year. Among the companies raising money abroad during June, 55 firms borrowed $1.30 billion through automatic route and 14 raised $583.7 million from approval route.

Company wise, in approval route category, state-owned carrier Air India raised $149.5 million in two tranches for import of capital goods and SCI Forbes raised $35.25 million to refinance earlier ECB. HPCL-Mittal Pipelines raised $262.5 million in two separate tranches for refinancing of earlier ECB.

In the automatic route, Reliance Industries borrowed $238.02 million for import of capital goods and India Oil Corporation raised $650 million to refinance earlier ECB. Construction major Larsen & Toubro raised $100 million for rupee expenditure. Among others, Hero Cycles borrowed money for overseas acquisition, Lotte India Corporation for new project, Aditya Birla Nuvo for refinancing of earlier ECB and Technofab Engineering for modernization of manufacturing facilities.

An external commercial borrowing (ECB) is an instrument used in India to facilitate the access to foreign money by Indian corporations and PSUs (public sector undertakings). ECB include commercial loans in the form of bank loans, buyers’ credit, suppliers’ credit, securitized instruments (e.g. floating rate notes and fixed rate bonds, non-convertible, optionally convertible or partially convertible preference shares) availed of from non-resident lenders with a minimum average maturity of 3 years. ECBs cannot be used for investment in stock market or speculation in real estate.

India VIX, a gauge for markets short term expectation of volatility rose 0.34% at 14.69 from its previous close of 14.68 on Tuesday. (Provisional)

 The CNX Nifty ended higher by 27.90 points or 0.36% to settle at 7,795.75. The index touched high and low of 7,809.20 and 7,752.90 respectively. 23 stocks ended in the green against 27 stocks ending in red. (Provisional)

The major gainers of the Nifty were BPCL up by 3.95%, Infosys up by 3.45%, Bank of Baroda up by 2.95%, Hindalco up by 2.66% and Wipro was up by 2.10%. On the flip side, the key losers were Ambuja Cement down by 3.18%, Ultratech Cement down by 2.80%, ACC down by 2.34%, IDFC down by 2.14% and Grasim down by 1.77%. (Provisional)

European markets were trading in green; UK’s FTSE 100 up by 0.34%, Germany’s DAX was up by 0.58% and France’s CAC 40 was up by 0.62%.

The Asian markets concluded Wednesday’s trade mostly in green, with the regional benchmark index extending a six-year high, as US inflation data damped concerns interest-rate increases will be brought forward. Chinese stocks rallied on speculation that government is accelerating measures to support the housing market. Indonesia’s rupiah jumped to a two-month high and stocks advanced after Joko Widodo was named the nation’s next president. Widodo, known as Jokowi, garnered 53.15% of support at the July 9 vote, while Prabowo won 46.85%. In addition to the rupiah, Asian currencies mostly pushed higher, including currencies such as the Malaysian ringgit and the Philippine peso. Chinese consumer confidence climbed to 111 points from a year ago in the second quarter, with spending continuing to grow due to increasing disposable income. The China Consumer Confidence Index has remained stable at 111 points for the third consecutive month, with the country’s shift from investment to consumption driving intentions to spend upward. In the three months, ending on June 30, Chinese consumers’ willingness to spend reached 46%, 2% points higher than in the previous quarter. Taiwanese Industrial Production rose to a seasonally adjusted annual rate of 8.63%, from 5.19% in the preceding month.