Post Session: Quick Review

Extending previous sessions’ jubilant mood, Indian equity markets ended upbeat for second consecutive session on Tuesday, puffing up gains of over 1.25% that took both Sensex and Nifty above psychologically crucial 25,850 and 7,700 levels respectively. Slew of good earnings from blue-chip companies and mostly positive regional counterparts, underpinned market-participants to go long in equities. In the extremely optimistic session of trade, local barometer gauges did not once succumbed to selling pressure, rather hectic buying which took place in the last hour of trade mainly lifted the markets to-day’s highest point. Broader indices too participated into the rally and went home with gains of around half a percent. Notably, gains of local equity markets came ahead of the release of crucial macro-economic data, i.e. July CPI and June IIP data. June Index of Industrial Production (IIP) is expected to come around 5.8% with an expectation of an upside toward 6%, while July CPI is expected to see an uptick to 7.6% for July as compared to that 29 month low that it came in June which was 7.31%.

On the global front, Asian shares nudged mostly higher on Tuesday, tracking rallies in the United States and Europe as investors briefly put aside geopolitical concerns. On the flip side, European shares fell on Tuesday, throwing a rally in the U.S. and Asia into reverse, as reports a Russian aid convoy was heading to Ukraine ratcheted up tension between Kiev and Moscow. Some caution also gripped European markets with investors waiting for closely watched gauge of German economic sentiment, which some analysts expected will reflect the impact on the euro zone's powerhouse of Western sanctions imposed on Russia over the Ukraine crisis.

Closer home, all the sectoral indices on BSE concluded in green, except for stocks belonging to Technology counters. On the flip side, stocks from Auto, Public Sector Undertaking (PSU) and Banking counters, witnessing heavy demand, outpaced other sectoral indices to emerge as top three gainers of the session. Gains in shares of Tata Motors, India's biggest automaker by revenue, which jumped more than 6% after strong sales of its luxury Jaguar and Land Rover vehicles helped triple the company's first-quarter net profit, mainly spelled optimism across entire Auto pivotal. The company’s consolidated net profit rose to Rs 5,398 crore, the highest in nine quarters, compared with Rs 1,726 crore a year ago. In other upbeat earnings, Oil Indian reported 40% rise in Q1 net profit and gained over three fourth of a percent, while Apollo Hospitals rallied over 5% after the company’s net profit for the quarter increased by 4.81% at Rs 82.74 crore as compared to Rs 78.94 crore for the quarter ended June 30, 2013. Besides, Eicher Motors skyrocketed 7% after the company’s net profit for the quarter jumped over two and a half fold at Rs 133.24 crore for quarter ended June 30, 2014 as compared to Rs 52.62 crore for the corresponding quarter of the previous year. The market breadth on the BSE remained in the favour of advances; advances and declining stocks were in a ratio of 1550: 1376, while 109 scrips remained unchanged. (Provisional)

The BSE Sensex surged 361.53 points or 1.42% to settle at 25880.77. The index touched a high and a low of 25904.98 and 25645.79 respectively. 24 stocks gained against 6 declines on the index. (Provisional)

The BSE Mid cap and Small cap indices too ended in the green, the BSE Midcap was up by 0.49%, while the BSE Small cap index was higher by 0.45%. (Provisional) 

On the BSE sectoral front, Auto up by 1.79%, PSU up by 1.72%, Oil and Gas up by 1.67%, Bankex up by 1.41% and Consumer Durables up by 1.40% were the major gainers in the space, while TECk was down by 0.05% remained the only loser on the sectoral space. (Provisional)

The top gainers on the Sensex were Gail India up by 5.83%, Tata Motors up by 5.72%, HDFC up by 5.48%, ONGC up by 3.59% and NTPC was up by 2.61%. On the flip side, Bharti Airtel down by 1.52%, Tata Power down by 1.05%, Hero MotoCorp down by 0.24%, ITC down by 0.14% and Maruti Suzuki down by 0.10% were the major losers. (Provisional)

Meanwhile, attributing prevailing restrictions on gold imports as a major reason for rise in gold smuggling, Commerce Ministry has pitched for easing of gold import norms to increase the availability of the metal in the domestic market and boost exports. 

Commerce and Industry Minister Nirmala Sitharaman said that strict norms on gold imports have been adversely impacting Indian gems and jewellery industry. Gems and jewellery exports account for about 15 percent of the country's total outbound shipments. The exports of gems and jewellery declined by 8.82% to $39.52 billion in FY14 from a year earlier due to prevailing Government’s restriction on precious metals imports.  By adding further, Commerce Minister said that gold import restrictions have also increased the gold smuggling cases in the country. During 2013-14, cases of gold smuggling had gone up to 2,441 as compared to 869 and 500 in 2012-13 and 2011-12 respectively.   

Gold is the second largest import item for India after crude oil and is mainly utilised to meet the demand of jewellery industry. The government had taken various measures like high customs duty of 10% and 80/20 rule to curb gold shipments to check country’s widening current account deficit (CAD). Under the 80/20 scheme, which was introduced in August last year, nominated agencies could import gold on condition that 20 percent of the shipment has to be exported and the remainder can be kept for domestic use. The export of gems and gewellary has been declining since October 2013. Meanwhile, India’s low gold import too has helped to contain the current account deficit (CAD) at $32.4 billion (1.7% of GDP) in FY14 as compared to $87.8 billion (4.7% of GDP) in FY13.

India VIX, a gauge for markets short term expectation of volatility declined 2.50% at 13.64 from its previous close of 13.99 on Monday. (Provisional)

The CNX Nifty ended higher by 101.10 points or 1.33% to settle at 7,727.05. The index touched high and low of 7,735.75 and 7,654.80 respectively. 44 stocks ended in the green against 6 stocks ending in red. (Provisional)

The major gainers of the Nifty were Tata Motors up by 5.99%, Gail India up by 5.55%, HDFC up by 5.30%, ONGC up by 3.38% and BPCL was up by 3.15%. On the flip side, the key losers were Bharti Airtel down by 1.46%, Tata Power down by 1.16%, Maruti Suzuki down by 0.32%, Hindalco down by 0.24% and Hero MotoCorp down by 0.23%. (Provisional)

European markets were trading mostly in the red; France's CAC 40 was down by 0.23% and UK's FTSE 100 was down by 0.19%, while Germany's DAX was up by 0.12%.

Asian equity indices ended mostly in green on Tuesday, with the regional benchmark measure extending gains after capping the biggest daily rally in almost two months, amid optimism that geopolitical risks are receding. Indonesia may consider cutting public stakes in banks and imposing lending quotas in an effort to channel more credit to industry, as policy makers prepare reform proposals for incoming President Joko Widodo. Economic growth eased to the slowest since 2009 in the three months ended June 30, as exports and government spending fell, underscoring the challenge to Jokowi as he prepares to lead the world’s fourth-most populous nation. Industrial production in Japan fell more-than-expected last month. The industrial production fell to a seasonally adjusted -3.4%, from -3.3% in the preceding month. Japan’s Corporate Goods Price Index fell to a seasonally adjusted annual rate of 4.3%, from 4.6% in the preceding month.

Singaporean GDP rose to a seasonally adjusted 2.4%, from 2.1% in the preceding quarter. The export-dependent Southeast Asian nation is set to benefit from a recovery in global growth, which is helping to offset higher business costs as the government pursues a plan to slow the inflow of foreign workers, boost productivity and attract new industries.