Jubilation continues at D-Street for eighth straight day; Sensex reclaims 27,800 mark

Extending winning streak for the eighth straight session, Indian equity benchmarks ended the Tuesday’s trade higher by a quarter percent with frontline gauges recapturing their crucial 27,800 (Sensex) and 8,350 (Nifty) levels. Sentiments remained up-beat after a better-than-forecasted monsoon reignited the optimism among market participants that a rate cut by the Reserve Bank of India (RBI) may be a possibility. 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.

Besides, fresh capital inflows by foreign funds at the domestic bourses and a firming trend in global markets on hopes of a Greek bailout deal too boosted the sentiment. Some support also came 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.

Global cues too remained supportive with European counters trading in green, as the region’s leaders agreed Greece’s government was getting serious about reaching a deal. Asian markets rallied on Tuesday with Chinese markets witnessing a turnaround rally of over two percent after the country’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.

Back home, foreign portfolio investors (FPIs) bought shares worth a net Rs 651.31 crore on yesterday, as per provisional data by the stock exchanges. Buying Capital Goods sector also supported the sentiments. Banking stocks too remained on buyers’ radar 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. Also, Pharmaceutical stocks remained in action after the sector received financial and regulatory support from the government.

The NSE’s 50-share broadly followed index Nifty rose by around thirty points to end comfortably above the psychological 8,350 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over seventy points to finish above the psychological 27,800 mark. Broader markets too traded with traction and ended the session in green. The market breadth remained in favor of advances, as there were 1,468 shares on the gaining side against 1,241 shares on the losing side while 1,12 shares remain unchanged.

Finally, the BSE Sensex gained 74.16 points or 0.27% to 27804.37, while the CNX Nifty added 28.45 points or 0.34% to 8381.55.

The BSE Sensex touched a high and a low 27882.66 and 27666.59, respectively. The BSE Mid cap index was up by 0.08%, while Small cap index up by 0.45%.

The top gaining sectoral indices on the BSE were Metal up by 1.71%, Capital Goods up by 1.41%, PSU up by 1.18%, Oil & Gas up by 0.83% and Infrastructure up by 0.65%, while IT down by 1.08%, TECK down by 0.76%, Consumer Durables down by 0.44% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 3.85%, Cipla up by 2.70%, Larsen & Toubro up by 1.96%, Mahindra & Mahindra up by 1.91% and NTPC up by 1.50%. On the flip side, Infosys down by 2.27%, Hero MotoCorp down by 2.22%, Lupin down by 2.12%, Bajaj Auto down by 1.00% and BHEL down by 0.99% were the top losers.

Meanwhile, the government is going to set up a high-level committee to work out the modalities to enable a single-window clearance system in pharmaceuticals sector. Presently, while the issue of patents is dealt by Department of Industrial Policy & Promotion (DIPP), drug licence is given by Drug Controller General of India (DCGI) under Health Ministry and pricing is controlled by NPPA, under Pharmaceuticals Department.

The proposed committee will be headed by Pharmaceuticals Secretary V K Subburaj and the move follows a recommendation by the task force on enabling the private sector to lead the growth of the pharmaceuticals sector. The other members of the committee will include representatives from Department of Industrial Policy and Promotion, Commerce, Science and Technology, Bio-technology, Environment and Health and Family Welfare. While, the industry would be represented by Indian Pharmaceutical Association (IPA), Indian Drug Manufacturers Association (IDMA), Bulk Drug Manufacturers Association (BDMA), Association of Indian Medical Devices Industry (AIMED), CII, FICCI, ASSOCHAM and others.

Chemicals and Fertiliser Minister Ananth Kumar stressing on the importance of having a single authority for clearance in the sector, has said that key decision-making powers on various important aspects such 'patents, licencing and pricing are with different departments' and this committee will suggest a mechanism for single-window clearance for the pharmaceuticals industry.

The CNX Nifty touched a high and low 8,398.45 and 8,334.95 respectively.

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 down by 1.27% and BHEL down by 1.05% were the top losers.

European Markets were trading in the green; Germany's DAX was up 1.08%, UK's FTSE was up 0.28% and France's CAC was up by 1.35%.

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.