Benchmarks extend previous session’s jubilation; Nifty regains 7,700 mark

Extending their previous session’s jubilation, Indian equity benchmarks ended the Tuesday’s trade with a gain of around one and a half percent with frontline gauges ending at one week high levels, recapturing their crucial 25,850 (Sensex) and 7,700 (Nifty) bastions. Barometer gauges, after a positive start, traded in tight band through out the session, while buying in last leg of trade took the benchmark equity indices to-day’s high point. Easing geopolitical tensions and hopes of encouraging index of industrial production (IIP) numbers for June to be released later today mainly buoyed the domestic sentiment. IIP data is expected to be strong in the final month of the quarter, as indicated by good core sector data. Investors would be also eyeing combined consumer price index (CPI) data for July 2014 which is expected to rise marginally to 7.40% from 7.31% in June.

Sentiments also remained up-beat after Paris-based think tank Organisation for Economic Cooperation and Development (OECD) said that India’s economic growth is gaining momentum and the country is poised for better growth. Meanwhile, Finance Minister Arun Jaitley has said that Rs 6.23 lakh crore indirect taxes collection target for the current fiscal is a challenging one but efforts are on to achieve the same by taking steps to boost growth.

On the global front, Asian markets ended mostly in the green terrain amid speculation the arrival of a Red Cross aid mission in eastern Ukraine may ease tensions. However, European counters were trading mostly in the red, halting the previous session’s sharp rebound as investors awaited Germany's ZEW survey on economic sentiment, seeking insight on the outlook for Europe’s biggest economy and the potential impact from the crisis in Ukraine.

Back home, appreciation in Indian rupee aided the sentiments. The rupee was trading at 61.10 per dollar at the time of equity markets closing as compared to 61.19 per dollar level on Monday. Meanwhile, rally in oil and gas sector too supported the sentiments as global crude oil prices declined. Better-than-expected Q1 numbers from BPCL, IOC and Oil India too spelled optimism across entire oil and gas pivotal. Auto space too rallied led by Tata Motors, 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. Additionally, stocks related to power space too edged higher, as the government has said that, as many as 29 hydro power projects with an overall capacity of 10,000 MW are awaiting appraisal from the Central Water Commission.

The NSE’s 50-share broadly followed index Nifty rose by over hundred points to end above the psychological 7,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over three hundred and sixty points to finish above its psychological 25,850 mark. Broader markets too traded with traction and ended the session in the green with a gain of around half a percent. The market breadth remained in favor of advances, as there were 1,555 shares on the gaining side against 1,366 shares on the losing side while 114 shares remain unchanged.

Finally, the BSE Sensex surged by 361.53 points or 1.42%, to 25880.77, while the CNX Nifty soared by 101.10 points or 1.33% to 7,727.05.

The BSE Sensex touched a high and a low of 25904.98 and 25645.79, respectively. The BSE Mid cap index was up by 0.49%, while the Small cap index gained 0.45%.

The top gainers on the Sensex were Gail India up by 6.02%, Tata Motors up by 5.92%, HDFC up by 5.39%, ONGC up by 3.21% and Sun Pharma up by 2.69%. While Bharti Airtel down by 1.67%, Hero MotoCorp down by 0.30% and ITC down by 0.14%, were the only losers in the index.

On the BSE Sectoral front, Auto up by 1.79%, PSU up by 1.72%, Oil & Gas up by 1.67%, Bankex up by 1.41% and Consumer Durables up by 1.40% were the top gainers, while Teck down by 0.05% was the only loser in the space.

Meanwhile, Finance Ministry Arun Jailtley has asserted that achieving Rs 6.23 lakh crore indirect tax collection target for current fiscal remains a challenge but efforts are on to attain the collection target by taking measures to boost growth. The government has budgeted to collect over Rs 6.23 lakh crore from indirect taxes in the current fiscal, which requires a growth rate of around 20 percent over the collection in 2013-14.

Arun Jaitley has stressed that tax collection depend upon the overall revival of the economy and in order to spur growth, the government has been taking measures over the past two months for improving areas of manufacturing and infrastructure. Finance Minister further added that the government is in favor of trade facilitation, which leads to substantial reduction in transactional cost for the businesses. Minister emphasized that investment in strengthening the tax infrastructure in the country will bring better returns to the exchequer of the government. He also laid emphasis upon reducing tax litigation and tax settlement mechanism to unlock the money held up due to litigation. He asked the officers of the Central Board of Excise and Customs (CBEC) to work as a facilitator for tax payers and at the same time take action wherever they find cases of tax evasion.

Indirect taxes include customs duty, central excise duty and service tax. Indirect tax collections grew by 4.5 percent to Rs 1,13,570 crore during April-June quarter of the current fiscal as compared to Rs 1,08,639 crore during the same period of previous financial year. Tax collection is the major source of revenue for the government. The government estimates to garner Rs 13.64 lakh crore from both direct and indirect tax collections during the FY15. In the previous fiscal year, tax collections fell short of target by a whopping Rs 77,000 crore as the government collected Rs 11.58 lakh crore against the budget estimate of Rs 12.35 lakh crore.

The CNX Nifty touched a high and low of 7,735.75 and 7,654.80 respectively.

The top 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 up by 3.15%. On the other hand, Bharti Airtel down by 1.46%, Tata Power Company down by 1.16%, Maruti Suzuki India down by 0.32%, Hindalco Industries down by 0.24% and Hero MotoCorp down by 0.23% were the top losers.

Most of the European markets were trading in red, France's CAC 40 was down by 0.21% and Germany's DAX was down by 0.18%, while United Kingdom's FTSE 100 was up by 0.03%.

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.