Benchmarks extend winning streak to seventh straight session

Boisterous benchmarks once again showcased an enthusiastic performance, by rallying over one and a half percentage points on Monday, as investors snapped up risky assets on optimism that Greece and its international creditors will strike a last-minute deal that will see Athens avert default. 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, as investors continued their hunt for fundamentally strong stocks. Frontline indices not only ended near intraday highs but also extended their rally for seventh straight session, settling comfortably above their crucial 8,350 (Nifty) and 27,700 (Sensex) bastions as investors took to hefty across the board buying.

Sentiments got bolstered 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. Foreign investors too got some respite as he terming the controversial retrospective taxation regime a “legacy issue”, has assured US investors that the government does not intend to legislate retrospectively and is looking to put a “quietus” to the matter. Some support also came on reports that the foreign direct investment (FDI) inflows into India surged 112% in April to $3.6 billion from $1.7 billion in the year-ago period and was up 71% over the inflows in the previous month. Meanwhile, the southwest monsoon rains have been 11 per cent above normal so far in June, stoking hopes the Reserve Bank of India will cut rates in October than in 2016 as anticipated earlier after delivering three cuts of 25 basis points each in 2015 so far.

Global cues too remained supportive with European markets trading higher in early deals amid expectations that the debt crisis in Greece would be resolved while merger and acquisitions in the telecom sector also boosted sentiment. Asian markets ended mostly in green with investors encouraged by signs of a compromise in Greece's debt talks with its creditors.

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. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 63.50 per dollar at the time of equity market closing against the Friday’s close of 63.55 on the Interbank Foreign Exchange.  Rally in rate sensitive counters too aided the sentiments on hopes monsoon may lead to an earlier-than-expected rate cut by the central bank. Stocks related to infrastructure space remained on buyers’ radar, as Ministry of Statistics & Programme Implementation (MoSPI) has said that India's infrastructure performance in 2014-15 was better than the previous fiscal, as production of inputs including power, steel, coal and cement moved up. Also, to accelerate highways building and salvage stuck road projects, NHAI has asked developers to come forward with a financing plan and justification for the fund infusion that they are seeking from the authority.

The NSE’s 50-share broadly followed index Nifty rose by around one hundred and thirty points and ended above the psychological 8,350 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over four hundred and thirty points to finish above the psychological 27,700 mark. Broader markets too traded with traction throughout the trade and ended the session with a gain of around one and a half percentage point. The market breadth remained in favor of advances, as there were 1,748 shares on the gaining side against 954 shares on the losing side while 114 shares remain unchanged.

Finally, the BSE Sensex surged by 414.04 points or 1.52% to 27730.21, while the CNX Nifty soared by 128.15 points or 1.56% to 8353.10.

The BSE Sensex touched a high and a low 27782.31 and 27417.03, respectively. The BSE Mid cap index was up by 1.49%, while Small cap index up by 1.40%.

The 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 Infrastructure up by 1.82%, while there were no losers on the index.

The top gainers on the Sensex were Axis Bank up by 3.62%, ICICI Bank up by 3.46%, Infosys up by 2.77%, HDFC up by 2.50% and SBI up by 2.19%. On the flip side, Bharti Airtel down by 2.25%, Reliance Industries down by 0.52%, Wipro down by 0.31%, Lupin down by 0.29% and ONGC down by 0.16% were the top losers.

Meanwhile, to address issues related to new companies law, a government-appointed panel has sought suggestions from all stakeholders, including the general public. An eight-member panel had been asked to look into the issues faced by the companies and other stakeholders from the new law and to suggest necessary changes to improve ease of doing business in the country.

The review committee has invited comments or suggestions to assist in its deliberations from the stakeholders latest by July 21, 2015. The new law would make it easier to do business and provides for stricter penalties for fraud cases.

The panel consists of the secretary and joint secretary from the ministry of corporate affairs along with the presidents of Institute of Chartered Accountants, Company Secretaries and Cost Auditors. There are also representatives from the judiciary and industry in the panel including former Delhi High Court Judge Reva Kheterpal, Chief legal Counsel of Tata Sons Bharat Vasani and Chairman of L&T Financial Holdings YM Deosthalee.

The panel has to give its recommendations to the government on the issues arising out of implementation of Companies Act. The panel will also examine recommendations received from the bankruptcy law panel and high level committee on Corporate Social Responsibility.

The CNX Nifty touched a high and low 8,369.45 and 8,257.40 respectively.

The top gainers on Nifty were PNB up by 6.05%, Axis Bank up by 3.89%, ICICI Bank up by 3.60%, Yes Bank up by 3.51% and Bosch up by 3.37%. On the flip side, Bharti Airtel down by 2.34%, Lupin down by 0.09%, Reliance Industries down by 0.47%, Idea down by 0.37% and Ultra Cement down by 0.23% were the top losers.

European Markets were trading in the green; Germany's DAX was up 3.25%, UK's FTSE was up 1.24% and France's CAC was up by 3.20%.

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.