Post Session: Quick Review

Indian markets extended their gaining spree for the eighth day on Tuesday, though signs of volatility started appearing with nearing June F&O series expiry during the week. Also, the traders who got some advantage with the slump in the neighbouring Chinese market, turned a bit cautious with recovery in the Chinese index. Still the benchmarks posted gains of a quarter percent with both Nifty and Senxex closing near to their crucial psychological levels of 8400 and 27800 respectively.  

The global cues were mostly supportive and after a good closing of the US markets amid optimism Greece can strike a deal with creditors, the Asian markets too made mostly a green closing with Chinese markets witnessing a turnaround rally of over two percent after China’s factory activity showed signs of stabilisation in June. The HSBC/Markit Flash China Manufacturing Purchasing Managers’ Index (PMI) edged up to 49.6 in June, a three-month high, from 49.2, but remained below the 50 mark in the zone of contraction. Later the European markets too made a positive start, extending their gains for the fourth straight day, as the region’s leaders agreed Greece’s government was getting serious about reaching a deal.

Back home, overcoming the intraday volatility markets managed a close in green, traders were encouraged with report that last day’s rains raised the total rainfall this season to 21% above normal. The Met department said monsoon rains spread to new territories in east, central and west India with two rain-bearing systems headed to meet over northwest India and bring a wave of wet weather into the region in a couple of days. Traders also drew some comfort with Chief Economic Advisor (CEA) Arvind Subramanian’s statement that he does not see oil prices going beyond $80 to $85, a price which will help India manage its macro economy reasonably. Back on street, metal, capital goods and PSU stocks powered the markets higher, while IT, tech and consumer durables remained in red. The broader markets too gave up some of their gains in the final hours of trade, though managed a green close. The banking stocks, especially the public sector banks remained in limelight with Finance Secretary Rajiv Mehrishi reportedly stating that Indian government intends to provide about Rs 57,000 crore to PSU banks towards recapitalization and is aiming infusion of about $3 billion in the current year and perhaps twice as much in the next year.

The BSE Sensex ended at 27803.72, up by 73.51 points or 0.27% after trading in a range of 27666.59 and 27882.66. There were 18 stocks on gainers side against 11 stocks on the decliners side on the index, while one stock remained unchanged. (Provisional)

The broader indices managed a green close; the BSE Mid cap index was up by 0.05%, while Small cap index ended higher by 0.44%.(Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.64%, Capital Goods up by 1.44%, PSU up by 1.10%, Oil & Gas up by 0.74%, INFRA up by 0.68%, while IT down by 1.04%, TECK down by 0.74%, Consumer Durables down by 0.47% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 3.80%, Cipla up by 2.74%, Larsen & Toubro up by 2.05%, Mahindra & Mahindra up by 1.81% and ITC up by 1.51%. On the flip side, Infosys down by 2.28%, Lupin down by 2.25%, Hero MotoCorp down by 2.22%, BHEL down by 1.01% and Tata Motors down by 0.86% were the top losers.(Provisional)

Meanwhile, Finance Secretary Rajiv Mehrishi has said that the Indian government intends to provide about Rs 57,000 crore to public sector (PSU) banks towards recapitalisation over the next two fiscal to meet global risk norms and for growth. The government has earmarked Rs 7,940 crore in the Budget for recapitalisation of PSU banks for the current fiscal.

Mehrishi stated that the government is aiming infusion of about $3 billion in the current year and perhaps twice as much in the next year, adding that “It doesn't have to wait for the Budget because it is a process that is ongoing and we can always seek additional funds within the supplementaries. So, it doesn't have to wait for the Budget. We have already some budget allocation provision there, we can use that to begin with and that is a billion dollar plus and we intend to increase that.'

The development follows Finance Minister Arun Jaitley's promise during his recent meeting with the banking heads assuring them more capital infusion into public sector banks, saying there's 'merit' in their demand for more funds over and above what was provided in the Budget. The government has already started assessment of capital requirement of public sector banks and has already received presentation of six public sector banks.

Finance minister Arun Jaitley has said the government will infuse capital in public sector banks in the next three to six months. The Finance ministry has asked state-run banks to draw up a five-year recapitalisation schedule to prepare them to lend support to its long-term growth plans, adding that the five-year road map should take into account cash that can be generated through internal resources to meet funding needs.

The CNX Nifty ended at 8381.05, up by 27.95 points or 0.33% after trading in a range of 8334.95 and 8398.45. 33 stocks ended in green against 17 stocks in red on the index.(Provisional)

The top gainers on Nifty were Coal India up by 3.80%, PNB up by 3.62%, Ultratech Cement up by 3.28%, Cipla up by 2.84% and Bank Of Baroda up by 2.80%. On the flip side, Hero MotoCorp down by 2.31%, Infosys down by 2.19%, Lupin down by 2.06%, Power Grid Corpn down by 1.42% and BHEL down by 1.05% were the top losers.(Provisional)

European Markets were trading with good gains, UK’s FTSE 100 was up by15.89 points or 0.23% to 6,841.56, France’s CAC added 59 points or 1.18% to 5,057.61 and Germany’s DAX surged by 117.66 points or 1.03% to 11,578.16.

Asian markets closed mostly in green on Tuesday, boosted by hopes of a last-minute deal on Greece's debt reform as well as data showing Chinese manufacturing activity improving. China’s manufacturing activity contracted for the fourth straight month in June as demand remained sluggish in the world’s second-largest economy. HSBC’s preliminary Purchasing Managers’ Index (PMI) came in at 49.6 in June, the highest in three months but still below the breakeven point of 50. The index, which is compiled by information services provider Markit and tracks activity in factories and workshops, is seen as a key barometer of the country’s economic health. Japanese manufacturing activity contracted slightly in June as new orders fell and output growth slowed in a sign the economy may have lost some momentum. The Markit/JMMA flash Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 49.9 in June from a final 50.9 in May. The index slid below the 50 threshold that separates contraction from expansion for the first time in a month. The output index fell to a preliminary 50.5 in June, following 51.9 in the previous month. New orders fell to a preliminary 49.4 from 50.9 in May, also indicating the first decline in a month. But new export orders rose to 53.6 from a final 50.6 in the previous month. That marked the fastest expansion in four months, suggesting overseas demand is starting to gather strength.