Post Session: Quick Review

Markets witnessed a smart bounce-back on Monday after posting their biggest falls in nearly 3-1/2 weeks, in previous trading session as part of a global market rout. Sentiment remained upbeat right from the start of trade as market-participants lapped up fundamentally strong stocks which were available at lucrative valuation after last sessions’ sell-off. In the extremely solid session of gains, both Sensex and Nifty gradually gaining ground concluded at day’s high point, amassing gains of around a percent, which took both Sensex and Nifty above the psychologically crucial 25,700 and 7,650 levels respectively. Meanwhile, broader indices also imitating similar trend, ended upbeat with gains of around a percent on the back of supportive global cues.

On the global front, Asian pacific shares mostly ended higher on Monday after US jobs data eased concerns about rising wage inflation, and reduced expectations that the Federal Reserve may act sooner than some had anticipated to increase interest rates. Meanwhile, European shares sprang back to life after Portugal prevented the collapse of one of its biggest banks. Lisbon announced a near 5 billion-euro rescue of the country's largest listed bank Banco Espirito Santo, preventing its collapse and potential contagion across the continent's banking sector.

Closer home, with buying being broad-based in nature, none of the sectoral indices ended in green terrain, however, stocks from healthcare counter turned out to be only exception. However, even sugar stocks turned sour in today’s trade after reports suggested of battle between Uttar Pradesh government and the state’s sugar mill likely intensifying further as the deadline set by the latter for corrective action expired on July 31.    

On the flip side, stocks from Consumer Durables, IT and TECk counters were the prominent gainers of the session. Shares in software services exporters rallied after the rupee last week posted its biggest weekly fall since record low levels in August last year. Nevertheless, interest rate sensitive banking and auto stocks witnessed demand ahead of RBI's bi-monthly policy review on Tuesday, where the central bank is widely expected to keep rates on hold and strike less hawkish tone on inflation as displayed in June. Additionally, oil marketing companies stocks, like HPCL, BPCL and IOC rallied on hopes that under-recoveries would be wiped off over next two-three months after government raised diesel prices by 50 paise from Friday. Moreover, Tyre manufacturers, like Apollo Tyres, Ceat, JK Tyre, Falcon Tyres and Goodyear, hogged much of the limelight today as traders lapped up stocks following pick-up in July auto sales and as companies reported better results following slump in rubber prices. The market breadth on the BSE remained in the favour of advances; advances and declining stocks were in a ratio of 1,801: 1,111, while 112 scrips remained unchanged. (Provisional)

The BSE Sensex surged 242.32 points or 0.95% to settle at 25723.16. The index touched a high and a low of 25754.42 and 25531.38 respectively. 25 stocks gained against 5 declines on the index. (Provisional)

The BSE Mid cap and Small cap indices too ended in the green, the BSE Midcap was up by 0.90%, while the BSE Small cap index was higher by 1.10%. (Provisional) 

On the BSE sectoral front, Consumer Durables down by 3.20%, IT down by 2.08%, TECk down by 1.73%, Power down by 1.73% and Capital Goods down by 1.57% were the major gainers in the space, while Healthcare down by 0.10% remained the lone loser on the sectoral space. (Provisional)

The top gainers on the Sensex were Infosys up by 3.66%, Hindalco up by 3.12%, SSLT up by 2.44%, Wipro up by 2.42% and Maruti Suzuki was up by 2.40%. On the flip side, Sun Pharma down by 0.98%, HDFC down by 0.81%, Bharti Airtel down by 0.71%, HDFC Bank down by 0.26% and Cipla down by 0.24% were the major losers. (Provisional)

Meanwhile, amid continuing geo-political tensions in the Gulf and the other Middle Eastern countries, Finance Ministry has made it clear that it cannot lower its guard on the external front and ease gold import curbs as developments in Iraq and other countries can have adverse implications on the country's Current Account Deficit (CAD) situation. Revenue Secretary Shaktikanta Das has stated that though CAD problem has been contained, India needs to be very cautious as global uncertainties in gulf countries can push up oil prices inflating the import bill, adding to pressure on the CAD. .

The current account deficit (CAD) narrowed to $32.4 billion (1.7% of GDP) in FY14 as compared to $87.8 billion (4.7% of GDP) in FY13 mainly driven by the lower gold imports. Gold and silver imports fell by 40.02% to $33.46 billion in FY14 due to the stern Government’s norms like high customs duty of 10% and existing 80/20 rule under which 20% of all gold imports by importers has to be re-exported.

Gold is the second largest import item for India after crude oil and is mainly utilised to meet the demand of jewellery industry. Over the past few months, gems and jewellery industry has been demanding the government to lower curbs on gold imports as these restriction has been adversely impacting the revenue of the industry players. Indian gems and jewellery industry account for around 13% of the country total exports. During FY14, India’s gems and jewellery exports declined by 8.82% to $39.52 billion from a year earlier due to prevailing restrictions.

India VIX, a gauge for markets short term expectation of volatility declined 2.66% at 14.81 from its previous close of 15.21 on Friday. (Provisional)

The CNX Nifty ended higher by 84.80 points or 1.12% to settle at 7,687.40. The index touched high and low of 7,694.80 and 7,622.05 respectively. 44 stocks ended in the green against 6 stocks ending in red. (Provisional)

The major gainers of the Nifty were BPCL up by 4.70%, Hindalco up by 4.40%, Infosys up by 3.56%, NMDC up by 3.36% and Jindal Steel was up by 3.29%. On the flip side, the key losers were HDFC down by 0.91%, Sun Pharma down by 0.88%, Bharti Airtel down by 0.50%, Cipla down by 0.40% and HDFC Bank down by 0.30%. (Provisional)

European markets were trading in the green; Germany's DAX was down by 0.41%, France's CAC 40 was down by 0.04% and UK's FTSE 100 was down by 0.63%.

The Asian markets concluded Monday’s trade mostly in green, with a gauge of regional equities rebounding after last week’s decline. A report last week showed China’s manufacturing expanded in July at the fastest pace in more than two years, signaling a pickup in economic growth is strengthening amid government support policies. However, growth in China’s services sector retreated slightly in July, an indication that buoyant growth among Chinese factories has yet to fully filter through to the services industry. The official Purchasing Managers’ Index (PMI) for the non-manufacturing sector slowed to 54.2 in July from June’s 55. The survey showed a sub-index for business expectations rose to 63.9 last month from June's 62.9.

The People’s Bank of China warned that the country’s credit and money supply have increased rapidly and indicated that it will refrain from broader monetary easing to support growth. The PBOC stated in its second-quarter monetary policy report on August 1 that the total debt level has been rising relatively quickly. Japan’s Monetary Base rose to 42.7%, from 42.6% in the preceding month. Thai CPI fell to a seasonally adjusted annual rate of 2.16%, from 2.35% in the preceding month.