Benchmarks extend winning streak to sixth straight day; Nifty reclaims 8,200 mark

Extending their northward journey to sixth straight session, Indian equity benchmarks ended the session with gain of around three fourth of a percent on Friday. Markets traded with traction throughout the session as sentiments remained up-beat, with IMD stating that monsoon is expected to be normal in June boosting sowing of kharif crops but there are concerns about pick up in rainfall in the next month. Some profit taking was witnessed in noon deals, but markets regained momentum in last leg of trade to end comfortably above their crucial 8,200 (Nifty) and 27,300 (Sensex) bastions on the back of sustained buying across the board with RIL displaying a spectacular rally for the sixth straight session on optimism concerning the company’s 4G telecom services that is likely to roll out under the Reliance Jio brand in December.

Some support also came with Finance Minister Arun Jaitley’s statement that a Parliamentary panel will in the second week of July submit its report on the Goods and Services Tax Bill. The Minister has also told the business community that the government will try to get the three supporting legislations for the implementation of the comprehensive indirect tax law in the subsequent sessions of Parliament. Finance Minister has also assured global investors that the Narendra Modi government is making efforts to allay their concerns over expediting reforms, the tax regime and policy stability.

Global cues too remained supportive, with European markets trading in green in early deals after the US Federal Reserve tempered expectations for the pace of interest rate rises. Asian shares gained for a third consecutive day, while China's Shanghai Composite bucked the trend and cracked 6%, extending a weekly drop to 13% as the tight market liquidity caused by new share listings triggered a heavy sell-off across the counters.

Back home, domestic institutional investors (DIIs) bought shares worth a net Rs 1110.01 crore on June 18, as per provisional data by the stock exchanges. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 63.55 per dollar at the time of equity market closing against the Thursday’s close of 63.73 on the Interbank Foreign Exchange. Buying in software and technology counters too aided the sentiments after Nasdaq hit record highs, a day after the Federal Reserve indicated it would raise the interest rates slowly.

The NSE’s 50-share broadly followed index Nifty rose by over fifty points and ended above the psychological 8,200 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over two hundred points to finish above the psychological 27,300 mark. Broader markets too traded with traction throughout the trade and ended the session with a gain of around half a percentage point. The market breadth remained in favor of advances, as there were 1,434 shares on the gaining side against 1,230 shares on the losing side while 150 shares remain unchanged.

Finally, the BSE Sensex surged by 200.34 points or 0.74% to 27316.17, while the CNX Nifty gained 50.35 points or 0.62% to 8224.95.

The BSE Sensex touched a high and a low 27404.60 and 27202.38, respectively. The BSE Mid cap index was up by 0.58%, while Small cap index up by 0.28%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.11%, Bankex up by 0.86%, FMCG up by 0.75%, PSU up by 0.72%, Auto up by 0.60%, while Realty down by 0.75%, Power down by 0.22%, Consumer Durables down by 0.13% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 4.53%, Maruti Suzuki up by 2.75%, HDFC up by 2.29%, ONGC up by 2.02% and Reliance Industries up by 1.78%. On the flip side, Tata Motors down by 2.82%, Tata Power down by 1.30%, Sun Pharma down by 0.94%, GAIL India down by 0.91% and BHEL down by 0.66% were the top losers.

Meanwhile, monsoon defying the El Nino effect is gathering pace with farmers benefitting from an increase in monsoon rains. IMD Director has though said that monsoon is expected to be normal in June boosting sowing of kharif crops but there are concerns about pick up in rainfall in the next month. Forecast of normal rains in June would encourage sowing of the kharif crop, particularly in central India.

A better-than-expected start to the monsoon in an El Nino year has eased concerns of dry weather fuelling inflation in the country. Rainfall has been 11 percent more than the average till June 18 and farmers in irrigated areas have started sowing. The progress in monsoon will help sowing to gather pace in rainfed areas. Though, IMD has warned that South-West monsoon rainfall will be weaker in July, when it is expected to be 92 percent of the long-period average, and in August, when it will be 90 percent.

The met department has been predicting the monsoon's progress into some more parts of central and east India for the past few days. But barring Kerala, coastal Karnataka and some areas of the Northeast, rains have been good in regions covered so far by the rain system.

Agriculture Ministry's data has revealed that till last week of the kharif season, farmers have sown various crops like paddy in 75.10 lakh hectares compared with 82.27 lakh hectare in the year-ago period. Farmers depend on the monsoon, which accounts for more than 70% of annual rainfall, to grow crops and produce hydro- electricity, and for drinking water.

The CNX Nifty touched a high and low 8,250.80 and 8,195.65 respectively.

The top gainers on Nifty were Mahindra & Mahindra up by 3.84%, Bank of Baroda up by 2.63%, Maruti Suzuki up by 2.25%, NMDC up by 2.25% and Vedanta up by 2.17%. On the flip side, Tata Motors down by 2.64%, Zee Entertainment down by 1.89%, Tata Power down by 1.23%, Sun Pharma down by 1.14% and Power grid down by 1.06% were the top losers.

European Markets were trading in the green; Germany's DAX was up 1.02%, UK's FTSE was up 0.56% and France's CAC was up by 1.17%.

Asian markets closed mostly in green on Friday, while Taiwan Stock Exchange was closed on account of ‘Make-Up’ holiday. China’s Shanghai Composite plunged extending the weekly drop to 13% - the biggest sell-off in seven years, as tight market liquidity caused by new share issues triggered a large sell-off. The market loss was the worst since May 28. China’s market regulator last week tightened some rules for margin trading, through which investors borrow funds to trade stocks, and prohibited dealers from raising funds outside of the margin trading channel to trade stocks. Besides, a total of 11 companies issued new shares for investor subscription, which usually drains funds away from the existing market. The regulator approved 24 initial public offerings earlier this month. Bank of Indonesia kept its benchmark interest rate steady at 7.50% at a policy meeting, as a falling rupiah and accelerating inflation continue to weigh on the economy.

The Bank of Japan held policy steady as expected in an 8 to 1 vote that saw Takahide Kiuchi again propose cutting the pace of government bond buying by nearly half. The BoJ is now buying government bonds at a pace of 80 trillion yen, with Kiuchi suggesting that be dropped to 45 trillion yen. The board did conclude that the economy continues to recover moderately and that private consumption has been resilient, while exports have improved. Japan’s index of leading economic indicators rose less-than-expected last month. The index of leading economic indicators rose to a seasonally adjusted 106.4, from 107.2 in the preceding month. Japan’s All Industries Activity Index rose to a seasonally adjusted 0.1%, from -1.4% in the preceding month whose figure was revised down from -1.3%.