Benchmarks extend gains; trade near intra-day high level

Benchmark equity indices, going strength to strength, were trading near day’s high point on increased buying by participants, supported by above-normal monsoon till now and the Federal Reserve’s dovish stance on interest rate. At present, Sensex and Nifty were trading above the crucial 27,300 and 8,200 levels respectively, with gains of over 0.60%. Apart from blue chips, broader indices too equally participated in the gain with both mid cap and small cap indices trading up by over 0.65%. The market breadth indicating the overall health of the market was strong with almost two gainers against every loser on BSE. The sentiments were on optimistic note from the early trade with Finance Minister Arun Jaitley’s  statement that economic reforms in the legislative pipeline can push India's growth rate above the 7 to 7.5% range.  Besides, firm global cues coupled with the appreciation in rupee value against the dollar, too added to the optimistic sentiments. However, caution prevailed over continued selling by foreign funds on domestic bourses. The Foreign portfolio investors (FPIs) sold shares worth a net Rs 784.73 crore on June 18, 2015.

On global front, Asian shares held firm, though Chinese market with a lower start was heading for its worst weekly decline since the global financial crisis. Further, US markets rallied in last session with Nasdaq reaching new record high, as investors bet the U.S. Federal Reserve will not raise interest rates too soon, though anxiety over how Greece's debt crisis will unfold dampens risk appetite. Back home, rising for the third straight day, the rupee strengthened 6 paise to trade at 63.67 against the US dollar in early trade on increased selling of the American currency by exporters.

Back on street, barring Consumer Durables, all other BSE sectoral indices were trading significantly higher. Among them, Capital Goods index was the star-performer and was up 1.22 per cent, followed by Oil & Gas up by 1.15 per cent, Metal up by 1.14 percent and PSU up by 0.84 percent, while Consumer Durables index was down by 0.13 percent. In scrip specific development, Shares of DB Realty surged after the company signed a Joint Venture (JV) with ECC and Konark to develop residential project namely DB Skypark in Mumbai. On the other hand, shares of Astral Poly Technik have dipped after the company has closed down operations at manufacturing unit at Baddi, Himachal Pradesh as it has become commercially unviable to run the plant.

The market breadth on BSE was positive, out of 2184 stocks traded, 1290 stocks advanced, while 788 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27329.98, up by 214.15 points or 0.79% after trading in a range of 27202.38 and 27338.49. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.77%, while Small cap index gained 0.66%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.22%, Oil & Gas up by 1.15%, Metal up by 1.14%, PSU up by 0.84% and FMCG up by 0.81%, while Consumer Durables down by 0.13% was the only losing index on BSE.

The top gainers on the Sensex were ONGC up by 2.16%, HDFC up by 2.15%, Hindalco up by 2.08%, Mahindra & Mahindra up by 2.06% and Tata Steel up by 1.58%. On the flip side, Tata Motors down by 1.22%, Hindustan Unilever down by 0.44%, Cipla down by 0.28%, GAIL India down by 0.21% and BHEL down by 0.14% were the top losers.

Meanwhile, Finance Minister Arun Jaitley, who is on a10-day trip to the US, assuring the tax reforms of the government, both direct and indirect has said the business community there that a Parliamentary panel will in the second week of July submit its report on the Goods and Services Tax (GST) Bill. He added that once the Select Committee gives its report, the Upper House will take up for the passage in the ensuing Monsoon session of Parliament the Constitutional Amendment Bill for rollout of GST in place of all indirect taxes. The government proposes to implement the GST from April 1, 2016, he said, adding 'what we have on the table is the consensus proposal.'

With regard to direct taxes, Jaitley said that the government would start the process of reducing corporate tax rate from 30 per cent to 25 per cent from the next fiscal. He said that “Our taxation structure needs to be streamlined and in the last one year we have laid down a clear raodmap. On direct tax side, our corporate tax is going to be brought down to 25 per cent that process begins next year and every year over a period of four years for 30 per cent plus some surcharge we bring it down to 25 per cent almost globally competitive”.

FM added that legal complications have been removed. Our Companies Act was little complicated...We have done one round of amendment hopefully we have to do some more. Numbers of permission are required to be significantly cut down many of them are going to be online. He said that the government is working on easing the process of doing business and added that alternative investment trust model is in place.

The CNX Nifty is currently trading at 8227.50, up by 52.90 points or 0.65% after trading in a range of 8195.65 and 8232.70. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.21%, Mahindra & Mahindra up by 2.14%, ONGC up by 2.01%, Asian Paints up by 1.94% and HDFC up by 1.91%. On the flip side, Power Grid down by 1.13%, Tata Motors down by 1.10%, Zee Entertainment down by 0.89%, Lupin down by 0.45% and Hindustan Unilever down by 0.38% were the top losers.

Barring Chinese market, all the other Asian markets were trading in green; Straits Times was up by 0.12%, FTSE Bursa Malaysia KLCI increased by 0.36%, KOSPI Index added 0.61%, Jakarta Composite added 0.77%, Nikkei 225 gained by 0.86% and Hang Seng surged by 1.08%. On the flip side, Shanghai Composite was down 2.05%.

Meanwhile, Taiwan's stock market and financial markets are closed Friday for the Dragonboat Festival holiday.