Benchmarks end near day’s high; bulls wake-up in late trade

Tuesday’s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of around half a percent. Hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending at intraday high levels. Earlier, markets made a weak start and traded in tight band for most part of the day’s trade as weakness in the global equities on fears over Greece debt defaulting coupled with a depreciating rupee kept investors edgy. Investors also remained cautious with mixed trade data, while the Indian trade deficit narrowed to $10.4 billion in May against $11.2 billion in the same month a year ago, but declining for the sixth straight month the country's merchandise exports shrank 20.2 percent to $22.35 billion in May, dragged down by a slump in global demand. The indices even went on to test important psychological 26,400 (Sensex) and 7,950 (Nifty) levels, but the key gauges got solid support around those intraday low levels as they convalesced from thereon.

On the global front, European shares hit near four-month low and yields on lower-rated euro zone sovereign debt climbed to their highest point since November, as financial markets braced for the possibility of Greece defaulting on its debt. Asian markets too ended lower as traders remained cautious ahead of the start of a two-day meeting of the Federal Reserve later on Tuesday, the latest step towards the US central bank’s first rise in interest rates in almost a decade.

Back home, sentiments remained dampened on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 604.86 crore yesterday as per provisional data released by the stock exchanges. Depreciation in Indian rupee too dampened the sentiments. Rupee was trading at 62.24 per dollar at the time of equity markets closing compared with its previous close of 62.16 per dollar. However, a smart rally in the banking stocks aided the sentiments on reports that the government will infuse fresh capital in the government-run banks this year to bolster risk buffers and credit growth.

Shares of oil marketing companies (OMCs) edged higher after these announcing Rs 0.64 a litre increase in petrol prices to align the domestic rates with global price benchmarks. Select stocks from power counter too edged higher as power tariff in Delhi hiked by up to 6% by the Delhi Electricity Regulatory Commission (DERC) as it restored a surcharge to compensate the private electricity distribution companies for rise in power purchase cost. On the flip side, select stocks from metal space witnessed selling pressure as Chinese demand failed to pick up yet despite stimulus measures by the biggest consumer.

The NSE’s 50-share broadly followed index Nifty rose by over thirty points to end near its psychological 8,050 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by around hundred points to finish near the psychological 26,700 mark. Broader markets also traded in-line with benchmarks and ended the session with a gain of around half a percent. The market breadth remained in favour of decliners, as there were 1,275 shares on the gaining side against 1,351 shares on the losing side while 128 shares remain unchanged.

Finally, the BSE Sensex surged by 99.96 points or 0.38% to 26686.51, while the CNX Nifty gained 33.40 points or 0.42% to 8047.30.

The BSE Sensex touched a high and a low of 26731.35 and 26379.93, respectively. The BSE Mid cap index was up by 0.76%, while Small cap index up by 0.34%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.18%, Auto up by 1.08%, Bankex up by 0.87%, Infrastructure up by 0.85% and Power up by 0.73%, while Oil & Gas down by 0.15% and FMCG down by 0.07% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Power up by 2.57%, Bajaj Auto up by 2.44%, Hindustan Unilever up by 1.65%, SBI up by 1.62% and NTPC up by 1.33%. On the flip side, Vedanta down by 1.46%, HDFC down by 1.35%, Dr. Reddys Lab down by 1.12%, Tata Steel down by 0.88% and BHEL down by 0.59% were the top losers.

Meanwhile, for a third consecutive time, petrol price has been hiked by 64 paise a litre, but diesel prices were cut by Rs 1.35 per litre in line with trend in global oil rates. Prices were last time hiked by Rs 3.13 a litre and diesel by Rs 2.71 per litre on May 16. However, on June 1, companies skipped raising rates. The State-owned fuel retailers have said that since last price change, there has been an increase in international prices of petrol while international prices of diesel have shown a downward trend. On the same time Indian rupee-US dollar exchange rate has depreciated during the period that led to alignment with international prices and adjustment for foreign exchange rates.

The last three hikes in petrol rates have wiped away more than one-third of the gains that had accrued to consumers when global rates began to fall in August. In case of diesel, the reduction has halted two consecutive increases during last month and partly restored the gains taken away in May.

Petrol in Delhi will cost Rs 66.93 per litre instead of Rs 66.29 at present. A litre of diesel will cost Rs 50.93 per litre as opposed to Rs 52.28. Petrol prices have been cumulatively cut by Rs 17.11 a litre in 10 reductions between August and February and diesel by Rs 12.96 a litre in six cuts between October and February.

PSU oil marketing companies Indian Oil Corporation (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) revise petrol and diesel prices on 1st and 16th of every month based on average imported cost and rupee-dollar exchange rate in the previous fortnight.

The CNX Nifty touched a high and low of 8061.85 and 7952.35 respectively.

The top gainers on Nifty were Indusind Bank up by 3.68%, Tata Power up by 2.71%, Bajaj Auto up by 2.60%, Power Grid up by 2.34% and NMDC up by 2.16%. On the flip side, Idea Cellular down by 3.87%, Cairn India down by 3.22%, Vedanta down by 1.76%, BPCL down by 1.40% and Lupin down by 1.26% were the top losers.

European Markets were trading in the red; Germany's DAX declined by 1.20%, UK's FTSE slipped 0.67% and France's CAC was down by 1.02%.

Asian markets closed mostly in red on Tuesday, as markets braced for the possibility of Greece defaulting on its debt. The Shanghai Composite was pulled down by regulation that now caps the size of margin trading and short-selling in the world's second-largest economy. The area of new homes sold in Shanghai fell to a nine-week low, but strong sales in the high-end segment pushed average price to a new high. A total of 249,400 square meters of new residential properties, excluding government-funded affordable housing, were sold in the city last week, a decrease of 6.3 percent from the previous seven-day period. Bank of Japan policymakers may debate the potential demerits of further yen declines at their rate review on Friday, suggesting that growing political concern over excessive yen weakness could delay the timing of any further monetary easing. In recent parliament debates, lawmakers have urged Governor Haruhiko Kuroda not to be hasty in trying to meet the inflation target and to hold off on more easing that could spur unwelcome yen falls. Indonesia’s central bank will keep its key interest rate on hold on a policy meeting on Thursday, after inflation rose in May and the rupiah is trading near its lowest level since August 1998. In May, the annual inflation rate was its highest this year, at 7.15 percent. Last week, the rupiah reached a 17-year low of 13,384 per dollar, and it remains close to that level.