Benchmarks resume northward journey after a day’s halt

Resuming their northward journey, Indian equity benchmarks ended the June F&O series expiry day on a firm note with frontline gauges ending near their crucial 28,900 (Nifty) and 8,400 (Nifty) levels. Sentiments remained up-beat as above normal monsoon rains, stoked hopes that central bank will cut rates in October than in 2016, as anticipated earlier after delivering three cuts of 25 basis points each in 2015 so far. Markets though traded cautiously in early deals on concern that Greece's creditors have rejected the debt repayment proposals, but extended its northward march in later part of the day’s trade after Prime Minister Narendra Modi launched smart cities, housing for all and urban rejuvenation schemes for Asia's third largest economy.

Some support also came with an UNCTAD report that FDI inflows in India rose 22 percent to $34 billion in 2014, and the upward trend is likely to continue against the backdrop of a push to manufacturing. The UN report also said that global foreign direct investment is expected to rebound in 2015 after falling 16 per cent last year due to a fragile world economy and political and military crises. Also, making a robust pitch for investments in India, Finance Minister Arun Jaitley requested lengthy-time period US buyers to start out investing without any delay as India’s progress story is on a agency footing and all excellent points are underneath the federal government’s lively consideration.

On the global front, European markets were trading mostly in the red in early deals, with lingering concerns of a Greek debt default following a lack of progress in negotiations with its creditors prompting investors to cut their exposure to riskier assets like equities. Asian markets ended mostly lower, with investors on ice ahead of a meeting of the European Union leaders later in the session as Greece continued last-minute efforts to avert a default.

Back home, some support came after the labour minister said the state social security fund would start investing in equity markets next month, as part of a reform drive aimed at boosting the economy. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 63.55 per dollar at the time of equity market closing against the Wednesday’s close of 63.59 on the Interbank Foreign Exchange. Buying in Auto space too aided the sentiments on report from engineering exporters’ body EEPC, which said automobile exports to Sri Lanka jumped nearly four-fold to $56.54 million in May from $14.58 million in the same month last year.

The NSE’s 50-share broadly followed index -- Nifty -- rose by around forty points and ended near the psychological 8,400 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- surged by over one hundred and sixty points to finish tad below its psychological 27,900 mark. Broader markets too traded with traction and ended the session with a gain of around half a percentage point. The market breadth remained in favor of advances, as there were 1,342 shares on the gaining side against 1,314 shares on the losing side while 128 shares remain unchanged.

Finally, the BSE Sensex surged by 166.30 points or 0.60% to 27895.97, while the CNX Nifty gained 37.15 points or 0.44% to 8398.00.

The BSE Sensex touched a high and a low 27968.75 and 27635.76, respectively. The BSE Mid cap index was up by 0.68%, while Small cap index added 0.23%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.12%, Realty up by 1.05%, Power up by 0.97%, Oil & Gas up by 0.95% and  Auto up by 0.89%, while IT down by 0.98%, TECK down by 0.63%, FMCG down by 0.54% and Consumer Durables down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 4.65%, GAIL India up by 3.44%, Larsen & Toubro up by 3.28%, HDFC up by 2.20% and Vedanta up by 2.10%. On the flip side, Wipro down by 2.03%, Cipla down by 1.74%, Hindustan Unilever down by 1.28%, ONGC down by 1.27% and NTPC down by 0.95% were the top losers.

Meanwhile, Prime Minister Narendra Modi will be launching three ambitious schemes, 100 smart cities, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and housing for all. The schemes are aimed at developing cities and towns. While the Smart City and AMRUT projects will draw Rs 48,000 crore and and Rs 50,000 crore, respectively, in central grants over five years, Housing-for-All by 2022 will see the government spend about Rs 3 lakh crore in the next seven years.

PM Modi will unveil the criteria and guidelines for the smart cities and other schemes and it will be followed by a two-day workshop in which over 1000 mayors, municipal heads, ministers concerned from states and their chief secretaries will take part. Representatives of embassies, which have shown interest for their countries' participation in these projects, will also take part in the workshop. Smart cities project will be based on Public-Private Partnership (PPP) model and neither the Centre not states will have any discretion in choosing 100 cities through a competition for smart cities scheme.

500 cities having 1 lakh and more population will be chosen for AMRUT project. Urban Development Minister M Venkaiah Naidu has said that these 500 cities will become engines of growth and they in turn should develop into smart cities.

PM will also unveil the logo of the housing mission, under the housing scheme, interest subsidy of 6.5 per cent on housing loans with tenure up to 15 years will be provided to EWS and low income groups, giving them a benefit of about Rs 2.3 lakh each. The operational guidelines for each of the three projects - which lay the ground rules and framework for implementation -- were framed after extensive, almost year-long consultations with states, Union Territories and urban local bodies.

The CNX Nifty touched a high and low 8,423.15 and 8,329.50 respectively.

The top gainers on Nifty were Bajaj Auto up by 4.91%, Larsen & Toubro up by 3.51%, Cairn India up by 3.27%, Indusind Bank up by 2.83% and GAIL up by 2.50%. On the flip side, Tech Mahindra down by 2.75%, Wipro down by 2.18%, ONGC down by 1.54%, Cipla down by 1.47% and Hindustan Unilever down by 1.07% were the top losers.

European Markets were trading mostly in the green; UK's FTSE was up 0.02%, Germany’s DAX was up by 0.11% however, France's CAC was down by 0.00%.

Asian markets closed mostly in red on Thursday as Greece continued last-minute efforts to avert a default. China is to scrap its longstanding loan-to-deposit ratio requirement, the latest in a series of measures to reform the country’s commercial banking sector and get more lending into a slowing economy. The People’s Bank of China will moderately increase short-term liquidity in the banking system through issuing reverse repos to stabilize market expectations.  South Korea announced a stimulus package of more than 15 trillion won ($13 billion) including a supplementary budget, and slashed its economic growth forecast. South Korea’s finance minister stated that he was worried about quarterly growth which would be lower than 1 percent over the April-June period, against a backdrop of an outbreak of Middle East Respiratory Syndrome and an economic slump. South Korean Consumer Confidence fell to 99, from 105 in the preceding month. Hong Kong Trade Balance fell to a seasonally adjusted -40.1B, from -39.2B in the preceding month. Malaysian Unemployment Rate remained unchanged at a seasonally adjusted 3.0%, compared to the preceding month.