Markets end near intraday highs; Sensex recaptures 27,100 mark

Boisterous benchmarks once again showcased an enthusiastic performance, by rallying over a percentage point on Thursday. Sentiments remained up-beat since start as key bourses opened with huge gap on up-side and there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength. Investors continued their hunt for fundamentally strong stocks. Frontline indices not only extended their rally for fifth straight session but also ended near intraday highs, settling comfortably above their crucial 8,150 (Nifty) and 27,100 (Sensex) bastions, as investors took to hefty across the board buying.

Sentiments remained up-beat as the US Federal Reserve in its open market committee meeting on Wednesday left the key rate unchanged at 0-0.25 per cent. On the domestic front, lots of government announcements too encouraged the traders for putting bets on the Indian growth story. Government gave its approval for the launch of the ‘Housing for All by 2022’ scheme. The Union Cabinet chaired by Prime Minister Narendra Modi accepted the recommendations of an Inter-Ministerial Committee to increase interest subvention to 6.50 per cent on housing loans to beneficiaries belonging to economic weaker section (EWS) including slum-dwellers and low income groups (LIGs). On the same time moving a step further in implementation of GST by April 1, 2016, the Finance Ministry set up two committees to suggest tax rates and look into IT preparedness for the new indirect tax regime.

On the global front, European counters were trading in red in early deals as hopes of a deal between Greece and its creditors at a summit later in the day receded, further straining investor nerves after weeks of fruitless negotiations. Asian markets ended mostly in red on Thursday; with Chinese market slumping by around four percent on some primary market activities after 11 companies launched IPOs, putting pressure on market liquidity.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Advancement of Monsoons and favorable macroeconomic parameters coupled with a strengthened rupee further lifted the sentiments. The partially convertible rupee was trading at 63.80 per dollar at the time of equity market closing against the Wednesday’s close of 64.10 on the Interbank Foreign Exchange on the back of sustained selling by exporters and banks amid a firm opening in the local equity market. Meanwhile, steel stocks remained in action after the government, in a much needed relief for domestic producers increased the basic customs duty (BCD) on certain long and flat steel products by 2.5 percent.

The NSE’s 50-share broadly followed index Nifty rose by over eighty points and ended above the psychological 8,150 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over two hundred and eighty points to finish above the psychological 27,100 mark. Broader markets too were traded with traction throughout the trade and ended the session with a gain of around a percentage point. The market breadth remained in favor of advances, as there were 1,547 shares on the gaining side against 1,190 shares on the losing side while 109 shares remain unchanged.

Finally, the BSE Sensex surged by 283.17 points or 1.06% to 27115.83, while the CNX Nifty gained 83.05 points or 1.03% to 8174.60.

The BSE Sensex touched a high and a low 27175.39 and 26910.26, respectively. The BSE Mid cap index was up by 0.80%, while Small cap index up by 1.07%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.63%, Consumer Durables up by 2.12%, Auto up by 1.17%, Healthcare up by 1.34% and Capital Goods up by 0.87%, while Realty down by 0.21%, Metal down by 0.19% and INFRA down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 5.15%, Tata Motors up by 2.71%, ONGC up by 2.16%, Wipro up by 1.94% and Maruti up by 1.83%. On the flip side, Cipla down by 0.99%, Coal India down by 0.82%, NTPC down by 0.55%, Tata Steel down by 0.49% and GAIL down by 0.22% were the top losers.

Meanwhile, amid the concerns of deficient monsoon, the inflation-wary government hiked the minimum support price (MSP) for different kharif crops with pulses witnessing sharp upward revision of Rs 275 per quintal for this year to boost domestic output and check price rise. In view of a large surplus of cereals in contrast to huge deficit of pulses, the Cabinet made an exception and decided to give a bonus of Rs 200 per quintal for pulses over and above the recommendations of the Commission for Agricultural Costs and Prices (CACP). After inclusion of bonus, the MSP of tur and urad has been fixed at Rs 4,625 per quintal each for 2015-16, which is higher by Rs 275 per quintal from the last year. Similarly, the MSP of moong has been hiked by Rs 250 to Rs 4,850 per quintal for this year from Rs 4,600 per quintal in the 2014-15 kharif season.

Besides pulses, CEA has also approved the MSP of paddy by Rs 50 per quintal for common variety to Rs 1,410 per quintal and Grade A variety to Rs 1,450 per quintal for this year. Among cash crops, the MSP of cotton has been raised by Rs 50 to Rs 4,100 per quintal for long staple and Rs 3,800 per quintal for medium staple cotton for 2015-16.

Among other crops, CCEA has raised the MSP of ragi by Rs 100 per quintal to Rs 1,650 per quintal; jowar - Rs 40 per quintal to Rs 1,590; bajra - Rs 25 per quintal to Rs 1,275 and maize by Rs 15 per quintal to Rs 1,324 for 2015-16.

Among oilseeds, the MSP of sunflower seed has been increased by Rs 50 to Rs 3,800 per quintal from over the last year, while that of yellow soyabean price by Rs 40 to Rs 2,600 per quintal and groundnut MSP by Rs 30 to Rs 4,030 per quintal for 2015-16 kharif season. The MSP of sesamum seed has been raised by Rs 100 to Rs 4,700 per quintal and nigerseed to by Rs 50 to Rs 3,650 per quintal for this year.

The Cabinet also directed that a credible procurement mechanism for pulses and oilseeds be put in place if the need arises. Amid forecast of deficit rains, the government said it is 'fully prepared to meet contingency arising out of any shortfall in monsoon. The contingency plans for 650 districts will be operationalised depending on progress of the monsoon'.

The CNX Nifty touched a high and low of 8,186.90 and 8,101.80 respectively.

The top gainers on Nifty were Reliance Industries up by 5.25%, Lupin up by 4.52%, BPCL up by 2.75%, ONGC up by 2.61% and Asian Paints up by 2.37%. On the flip side, Zee Entertainment down by 1.67% Tech Mahindra down by 1.31%, Bank of Baroda down by 1.17%, PNB down by 0.94% and Coal India down by 0.79% were the top losers.

European Markets were trading in the red; Germany's DAX down by 0.78%, UK's FTSE down by 0.40% and France's CAC was down by 0.91%.

Asian markets closed mostly in red on Thursday, with investors’ risk appetites subdued on a possible Greek default. China state council stated that the government will step up effective investment in key sectors, including shantytown renovation and rural power infrastructure, to support growth, even as it saw more positive factors in the economy. China’s economic growth slowed to a six-year low to 7% in the first quarter as demand at home and abroad faltered, and recent data showed weakness persisted into the second quarter, putting more pressure on the government to step up policy stimulus. Growth in foreign investment in China slowed to 7.8% in May, but outward investment surged almost 50% in the first five months of the year. Foreign direct investment (FDI), which excludes financial sectors, increased to $9.33 billion last month, after a 10.5% year-on-year rise in April. Confidence at Japanese manufacturers in June rose for the second straight month and retailers were at their most optimistic in over a year, offering a welcome sign that consumers may have finally shaken off the effects of a sales tax hike.  The Reuters Tankan - which closely tracks the central bank’s quarterly tankan survey - gives credence to the Bank of Japan’s view that the economic recovery will strengthen over the next year. Hong Kong Unemployment Rate remained unchanged at a seasonally adjusted 3.2%, compared to the preceding month.