Post Session: Quick Review

Buying activities which took place in the late hours of trade put local equity markets back to path of high growth trajectory, leading to gains of over a quarter of a percent after two straight sessions of correction on Wednesday, which took both Sensex and Nifty above the psychologically crucial 26,050 and 7,750 levels respectively by the close of trade. In the volatile session of trade, markets witnessed intra-day reversal as benchmarks recouped all the losses in second half of session on account of bargain buying activities which took place in select fundamentally strong blue chip stocks available at cheaper valuations after two straight session of steep losses, driven by encouraging result from stocks like Bharti Airtel, ITC, Dr Reddy’s Lab and Lupin, among others. Meanwhile, on the broader front, while Midcap index accumulated similar amount of gains, Small-cap index ended flat with negative bias.

On the global front, Asian shares touched a six-and-half-year peak on Wednesday and the dollar was steady, with investors waiting for second quarter U.S. growth data as well as a U.S. Federal Reserve meeting that some believe might yield a more hawkish policy outlook. On the flip side, European shares dipped after French oil major Total was hit by concerns over its investments in Russia following Tuesday's tightening of European sanctions on Moscow after the downing of an airliner in neighboring Ukraine.

Closer home, some sense of relief also crept into the markets after reports from to Indian Meteorological Department (IMD) suggested that monsoon in the country is likely to remain strong till August 15. The session also turned out to be quite yielding, given the losses witnessed in early deals after stocks like L&T and IDFC reported dismal set of numbers, nevertheless the recovery which came thereafter aided markets in snapping its two consecutive sessions’ losing streak. Sectorally, Capital Goods and Information Technology counters were the only loser, while all of the sectoral indices ended in positive territory, with prominent gainers being the stocks from Infrastructure, Banking and Consumer Durable counters.

Lower than expected earnings from L&T dragged the entire Capital Goods pivotal lower. L&T cracked over 7% after company reported the consolidated net profit of Rs 967 crore for the quarter ended June 2014 (Q1), mainly on account of one-time gain of Rs 249 crore on disinvestments and stake sale in one of its project. In other earnings, Bharti Airtel stocks gained over 5% after the company’s net profit from ordinary activities after tax for the quarter surged 125.32% at Rs 2160.40 crore. Additionally, ITC stocks rallied over 2% after company’s net profit jumped has surged 15.60% at Rs 2186.39 crore as compared to Rs 1891.33 crore for the quarter ended June 30, 2013. Besides, Lupin shares also sprang up over 4 on reporting in line with estimates Q1 numbers. The market breadth on the BSE remained in the favour of decliners; advances and declining stocks were in a ratio of 1388:1493, while 121 scrips remained unchanged. (Provisional)

The BSE Sensex surged 76.17 points or 0.29% to settle at 26067.40. The index touched a high and a low of 26113.48 and 25850.04 respectively. 20 stocks gained against 10 declines on the index. (Provisional)

The BSE Mid cap and Small cap indices too ended in the green, the BSE Midcap was down by 0.42%, while the BSE Small cap index was lower by 0.04%. (Provisional) 

On the BSE sectoral front, Infrastructure up by 1.62%, Bankex up by 1.56%, Consumer Durables up by 1.51%, Healthcare up by 1.38% and Realty up by 0.98% were the top gainers, while Capital Goods down by 4.61% and IT down by 0.45% were the major losers in the space. (Provisional)

The top gainers on the Sensex were Bharti Airtel up by 5.12%, Hero MotoCorp up by 2.72%, ICICI Bank up by 2.65%, Hindalco up by 2.32% and Cipla was up by 1.96%. On the flip side, L&T down by 7.21%, Tata Power down by 1.33%, SBI down by 0.93%, Wipro down by 0.86% and Tata Steel down by 0.65% were the major losers. (Provisional)

Meanwhile, according to Indian Meteorological Department (IMD), the monsoon in the country is likely to remain strong till August 15. IMD has forecasted heavy rainfall in many parts of the country except northwest India in the next 48 hours.

Agriculture ministry also stated that the increase in rainfall from the second half of July has helped farmer's plant crops and till now no state government had approached the ministry for drought relief.

The southwest monsoon covered the entire country two days after its normal date July 15. However, some of the states have not received enough rainfall. So far, southern and eastern parts of the country recorded rainfall deficit at 19% to 24%. In Punjab, Haryana, Chandigarh and Delhi, the rainfall deficit was more than 50%, while in western Uttar Pradesh the seasonal deficit was 49%.

Monsoon rain is vital for India as 55% of the agriculture land depends entirely on rain for irrigation. Timely and normal monsoon is also vital for rabi season (winter crops) also as it raises the water table and moisture content in the soil. Though, agriculture sector accounts for only about 15% of the economy, monsoon has a wider impact because it affects millions of people in villages who depend upon agriculture. Further, a poor monsoon can impact India’s exports, stoke inflation particularly food inflation and lead to lower demand for products ranging from cars to consumer goods.

India VIX, a gauge for markets short term expectation of volatility declined 3.03% at 13.88 from its previous close of 14.32 on Monday. (Provisional)

The CNX Nifty ended higher by 42.70 points or 0.55% to settle at 7,791.40. The index touched high and low of 7,798.70 and 7,707.60 respectively. 35 stocks ended in the green against 15 stocks ending in red. (Provisional)

The major gainers of the Nifty were Lupin up by 5.48%, Bharti Airtel up by 5.47%, PNB up by 4.38%, DLF up by 3.27% and Kotak Bank was up by 3.14%. On the flip side, the key losers were L&T down by 7.01%, Jindal Steel down by 1.83%, Tata Power down by 1.63%, Tech Mahindra down by 1.55% and MCDOWELL-N down by 1.44%. (Provisional)

European markets were trading in the red; Germany's DAX was down by 0.03%, France's CAC 40 was down by 0.08% and UK's FTSE 100 was down by 0.16%.

The Asian markets concluded Wednesday’s trade mostly in green, ahead of a rate announcement from the Federal Reserve. The Federal Reserve will later conclude a policy meeting announcing fresh cuts to its monthly bond-buying program and deliver an upbeat take on the US economy. Jakarta Stock Exchange was closed today on account of ‘National Leave’ holiday. China's regional economies enjoyed a revival in growth in the second quarter, data from provincial governments showed. Of the 30 regions and provinces that released their local gross domestic product (GDP) data, 23 reported first-half economic growth accelerated from the first quarter. About three-quarters posted growth that was higher than the national average of 7.4% in the first six months. Japan’s industrial production fell to a seasonally adjusted -3.3%, from 0.7% in the preceding month. South Korean industrial production rose to a seasonally adjusted annual rate of 2.9%, from -2.8% in the preceding month whose figure was revised down from -2.7%. Thai Industrial Production fell to a seasonally adjusted -6.6%, from -4.1% in the preceding month.