Post Session: Quick Review

The bull-run continued for the Indian markets for the seventh straight session on Monday, with benchmarks adding gains of around one and half a percent and reclaiming the respective crucial psychological levels of 27000 (Sensex) and 8350 (Nifty) respectively. The signs of last-minute Greece deal lifted equity market optimism worldwide and Indian markets too participated in the rally. Greek Prime Minister Alexis Tsipras after discussing the new offer with the leaders of Germany, France and the European Commission by phone presented the three leaders Greece's proposal for a mutually beneficial agreement that will give a definitive solution and not a postponement of addressing the problem. The European Union welcomed new proposals from Greek Prime Minister as a “good basis for progress” at talks. On the domestic front, reports of June rainfall likely to end with a 16 percent surplus over the long-period average, encouraged the investors, on hopes that if the monsoon remains normal and inflation under control, RBI may go for another rate cut.

On the global front, the Asian markets ended mostly in green on Monday shrugging off the weak lead from Wall Street on Friday, as investors were encouraged by hopes of a resolution to the Greek debt crisis. Later the European stocks too rose for a third day after Greek Prime Minister Alexis Tsipras presented a new plan of reforms.

Back home, the market mood remained jubilant throughout the day with traders taking the benefit of lower valuation to accumulate fundamentally strong stocks. Traders were in high mood from the beginning with Finance Minister Arun Jaitley’s statement, who on the basis of policy changes along with a good monsoon said that the path to 10 percent growth in Indian economy is not impossible. On the same time the foreign investors sensed some relief as FM termed the controversial retrospective taxation regime a “legacy issue”, and assured US investors that the government does not intend to legislate retrospectively and is looking to put a “quietus” to the matter. The surge in Indian rupee to fresh one month high on persistent selling of American greenback, too supported the markets for the day. All the sectoral indices posted good gains for the day led by realty followed by bank, consumer durables and power. The realty pack was in focus since morning with Indiabulls Real Estate surging by over 30 percent after Chairman Sameer Gehlaut announced that he will buy 10 percent stake in the group’s property development company, Indiabulls Real Estate, for Rs 538 crore. Gehlaut will buy five percent equity shares in the company through preferential allotment and subscribe to 43.6 million warrants, equivalent to five percent stake in the company on conversion. On the other hand the telecom stocks were slightly in somber mood after the government sought information to check the veracity of telecom operators' claim that the paucity of mobile towers has led to frequent call drops. Bharti Airtel lost 2.42% and Idea Cellular declined by 0.09%, though RCom was up by 1.53%.

The BSE Sensex ended at 27730.21, up by 414.04 points or 1.52% after trading in a range of 27417.03 and 27782.31. There were 25 stocks in green against 5 stocks in red on the index. (Provisional)

The broader indices performed in tandem with the benchmarks; the BSE Mid cap index surged by 1.49%, while Small cap index gained 1.40%.(Provisional)

The top gaining sectoral indices on the BSE were Realty up by 5.05%, Bankex up by 2.62%, Consumer Durables up by 2.42%, IT up by 1.86% and INFRA up by 1.82%. (Provisional)

The top gainers on the Sensex were Axis Bank up by 3.80%, ICICI Bank up by 3.56%, Infosys up by 2.63%, HDFC up by 2.23% and SBI up by 2.19%. On the flip side, Bharti Airtel down by 2.42%, Lupin down by 0.63%, Reliance Industries down by 0.45%, Mahindra & Mahindra down by 0.27% and ONGC down by 0.06% were the losers.(Provisional)

Meanwhile, Finance Minister Arun Jaitley assuring the US investors that the government does not intend to legislate retrospectively and is looking to put a 'quietus' to the matter has termed the controversial retrospective taxation regime a “legacy issue”. The finance minister, who is on a 10 day visit to US to sell the India growth story, said the government has categorically made it clear that “we do not intend to legislate retrospectively. We do not intend that any fresh action under the old retrospective laws be taken.”

Jaitley added that for the future, this is a closed issue and investors are quite appreciative of that. As far as past is concerned, it relates to only some individual companies and the issue is pending before some judicial or dispute redressal mechanism body. “And therefore, when I said we are looking for putting a quietus to this, I had in mind waiting for the expeditious disposal of that dispute.” FM said that just as some transfer pricing has been resolved by a judgement of the Bombay High Court, which we accepted and we put an end to the whole issue that is what the similar quietus I was referring to.

Last year, the government had set up a four-member committee, headed by Joint Secretary of the Foreign Tax and Tax Research-I unit of Central Board of Direct Taxes to scrutinise all cases arising out of retrospective tax amendment.

Finance minister termed India as a bright spot in an otherwise troubled global economy and said that the new Indian government offers a stable, predictable and transparent policy regime, making the country an attractive destination for investors. He added that the government is fairly determined to continue this process so that it can give further boost to our economy.

The CNX Nifty ended at 8351.50, up by 126.55 points or 1.54% after trading in a range of 8257.40 and 8369.45. There were 44 stocks on gainers side against 6 stocks on the decliners’ side on the index. (Provisional)

The top gainers on Nifty were Axis Bank up by 3.71%, Bosch up by 3.51%, ICICI Bank up by 3.51%, Yes Bank up by 3.49% and PNB up by 3.36%. On the flip side, Bharti Airtel down by 2.32%, Lupin down by 0.70%, Reliance Industries down by 0.40%, Idea Cellular down by 0.28% and ONGC down by 0.14% were the top losers.(Provisional)

European Markets surged in early Monday trade, UK’s FTSE 100 gained 87.59 points or 1.31% to 6,798.04, France’s CAC surged by 149.14 points or 3.1% to 4,964.51 and Germany’s DAX added 349.03 points or 3.16% to 11,389.13.

Asian markets closed mostly in green on Monday, while China Stock exchange was closed on account of 'Dragon Boat Festival' holiday. The Bank of Japan expects factory output to fall for the first time in three quarters in April-June on weak Asian demand, underscoring the fragile nature of the economic recovery. Industrial production rose 1.5 percent in January-March from the previous quarter, helping the world’s third largest economy expand much faster than expected. Japan’s government will release a fiscal blueprint that will recommend taking a flexible approach to limiting state spending rather than setting a rigid cap on the annual increase to reduce the government’s mountain of debt. Japan has emerged from last year’s recession as companies start to increase capital expenditure and consumer spending recovers from the pain of last year’s sales tax hike. Japan’s index of leading economic indicators rose to a seasonally adjusted 106.4. Indonesian companies are shedding jobs as they grapple with the weakest economic growth in six years, adding to the troubles facing President Joko Widodo, who was elected last year on pledges to dig the country out of a rut. Government data might suggest no cause for alarm - unemployment was 5.81 percent in February, up only slightly from 5.70 percent a year earlier - but the official numbers are notoriously unreliable and don’t adequately cover the informal sector, which is two-thirds of Southeast Asia’s biggest economy.