Post Session: Quick Review

Indian markets could not get any relief on the last trading day of the week and extended their decline for the fourth straight session on Friday, the major averages even slipped below their psychological levels of 8150 (Nifty) and 26800 (Sensex), albeit by small margins. Earlier after three days of decline benchmarks sensed some respite during the second half after reeling under immense selling pressure with RBI’s rate pause indication and forecast of deficient monsoon. Traders seem to have taken cues from weather office announcement that annual monsoon rains arrived at Kerala coast in southern India. Earlier Finance Minister Arun Jaitley had dismissed fears of the first drought in six years. He said that conclusions on that basis either on inflation or some kind of distress situation are “far-fetched”. He said the timing and spread of the June-September rainy season suggested the effect won't be as dire as the plummeting stock markets seemed to indicate. Later the Agriculture Minister Radha Mohan Singh said that the central government will give subsidy on power, diesel and seeds in case of deficient monsoon.

The global cues though remained mostly soft for the day and while the Asian markets ended mixed the European markets traded lower, as Greece deferred a debt repayment and German bonds extended declines in their worst week since 1998. Greece told the IMF it would put off a repayment of about $339 million due Friday, requesting instead to bundle all four payments scheduled in June into one lump sum to be deposited at the end of the month.

Back home, it proved a roller costar ride for the Indian markets, as the benchmarks after a lower start and trading in a range till noon, suddenly spiked up and despite intermittent profit booking held up their gains till last hours touching the highest point of the day, led by gains in metal, capital goods and FMCG stocks, however in the last half hour sudden selling re-appeared and dragged the markets again in red. Banking once again gave the major setback and turned out to be the culprit prohibiting markets a green ending. On the sectoral front, apart from banking, realty, IT, Tech and auto were the major laggards, while some strength was provided by metal, oil & gas and capital goods stocks. PSU index too posted good gains for the day after the Finance Minister Arun Jaitley said that the government’s PSU disinvestment programme will continue as planned, irrespective of the market volatility.

In scrip specific action, Nestle shares though gave up their gains finally, but they staged a sharp recovery intraday, gaining nearly 2 per cent, after the company's global CEO held a press conference to address concerns around Maggi noodles and said that they are safe for consumption

The BSE Sensex ended at 26768.49, down by 44.93 points or 0.17% after trading in a range of 26718.44 and 27014.42. There were 13 stocks on gainers side against 17 stocks on the decliners side on the index. (Provisional)

The broader indices though managed a green closing; the BSE Mid cap index ended up by 0.06%, while Small cap index was higher by 0.26%.(Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.78%, PSU up by 1.35%, FMCG up by 1.05%, INFRA up by 0.93%, Capital Goods up by 0.80%, while Realty down by 1.44%, Bankex down by 0.93%, IT down by 0.80%, Auto down by 0.60%, TECK down by 0.46% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 4.06%, GAIL India up by 3.48%, NTPC up by 2.85%, ONGC up by 2.24% and Sun Pharma Inds up by 1.78%. On the flip side, Tata Motors down by 2.20%, ICICI Bank down by 2.18%, HDFC down by 1.63%, Axis Bank down by 1.63% and Hindalco down by 1.32% were the top losers. (Provisional)

Meanwhile, the government has announced the launch of third round of coal block auction for 10 mines with over 350 million tonnes of reserves exclusively to unregulated sectors like steel and cement, between August 11 and 17. Under schedule II category (producing) mines, two will be auctioned, while in the schedule III (ready to produce) eight mines will be put on offer.

The coal secretary Anil Swarup announced that the government will issue the tenders inviting technical and financial bids for the mines from June 8 and the last date for submission of the documents will be July 21. Of the 10 blocks, most have requisite approvals and are located in Maharashtra, Jharkhand, Chhattisgarh and Odisha. Five of these blocks were offered to private companies in the first two rounds of auction, but were later withdrawn as they received less than three bids.

Swarup further added that the ministry has issued instructions to the Nominated Authority to conduct the auctions for mines classified for iron and steel, cement and captive power plant sector and the government will follow the same process as was followed in the auctions held earlier this year with just one change that on this occasion government will treat multiple bids of a single entity as a single bid in terms of determining the 50 percent qualifiers. The government has already auctioned 28 coal mines in last two blocks.

The coal secretary also said the ministry was considering auction of coal linkages for unregulated sectors, including cement and steel, for five years and the ministry is seeking comments from the stakeholders on methodology for proposed auction of coal linkages/LoAs to non-regulated sector through competitive bidding.

The CNX Nifty ended at 8114.70, down by 15.95 points or 0.20% after trading in a range of 8100.15 and 8191.00. 20 stocks gained against 30 declining stocks on the index. (Provisional)

The top gainers on Nifty were Coal India up by 4.32%, Zee Entertainment up by 3.46%, GAIL India up by 3.21%, Idea Cellular up by 2.76% and NMDC up by 2.34%. On the flip side, Ambuja Cement down by 3.14%, ACC down by 2.21%, Ultratech Cement down by 2.15%, ICICI Bank down by 2.07% and Tata Motors down by 2.02% were the top losers. (Provisional)

European Markets made a soft start, Germany’s DAX was down by 128.82 points or 1.13% to 11,210.32, UK’s FTSE 100 lost 52.84 points or 0.77% to 6,806.40 and France’s CAC slumped by 68.81 points or 1.38% to 4,918.32.

Asian markets closed mostly in red on Friday, with traders nervously watching events in Europe after Greece tied up a deal to delay its latest debt repayments. A deluge of Chinese data due next week may show some signs of steadying in the world’s second-largest economy thanks to stimulus measures, but the street expects more support to counter headwinds from a property downturn and patchy exports. Indonesia’s foreign exchange reserves were $110.77 billion at the end of May, falling slightly from $110.87 billion at the end of April. Philippine inflation eased to its lowest in nine years due to declines in commodities, giving the central bank scope to cut interest rates as the economy loses momentum due to low government spending and sluggish exports. The consumer price index rose 1.6% in May from a year earlier, the lowest rate since at least 2006 based on comparable data, while prices on a month-on-month basis fell 0.1% compared with April’s 0.2% rise. Japan’s index of leading economic indicators rose to a seasonally adjusted 107.2, from 106.0 in the preceding month. Taiwanese CPI rose to a seasonally adjusted annual rate of -0.73%, from -0.80% in the preceding quarter.