Late hour buying help benchmarks to end higher

Indian equity benchmarks staged a smart recovery in last leg of trade on Tuesday and ended the session in green with a gain of around half a percent, supported by short-covering in beaten down but fundamentally strong stocks. Immense volatility characterized trading whereby benchmark equity indices kept altering between green and red terrain throughout the session as investors remain wary ahead of the Greece’s bailout expiry due today, when the cash-strapped nation is unlikely to make a 1.6 billion euro ($1.8 billion) repayment to the International Monetary Fund (IMF). Nevertheless, broader indices outperformed benchmarks, ending with a gain of over a percent.

In the extremely choppy session of trade, buying which took place in last hour of trade mainly helped benchmarks to regain their positive trajectory as some support came with report that US embassy stated that India is one of the fastest growing FDI sources for the United States with investors from the country more interested in US' aerospace and textile sectors, among others. Some support also came with NITI Aayog Vice Chairman, Arvind Panagariya’s statement that India’s growth rate is expected to accelerate to 8 per cent in the current financial year and the economy will surpass $3 trillion mark in less than five years. Pangariya also said that India is well prepared to handle any situation that may arise out of the Greece crisis, citing strong fundamentals of the economy.

On the global front, European counters were trading in red on Tuesday as Greece lurched towards defaulting on a looming debt payment, raising the likelihood of the cash-strapped nation’s exit from the euro zone. However, all the Asian equity indices ended in positive terrain, as a sharp rebound in the China’s Shanghai Composite lifted the mood of the traders.

Back home, appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 63.68 per dollar at the time of equity market closing against the Monday’s close of 63.84 on the Interbank Foreign Exchange. Buying in Metal counter too aided the sentiments on hopes of demand increase in China the largest consumer. FMCG space too ended higher led by over four percent rise in Nestle India after Bombay high court permitted the company to export all nine variants of Maggi even as the ban on selling the two-minute noodles within the country will continue.

On the flip side, software pack witnessed some selling after Tech Mahindra pruned its revenue and profit margin last day, was further weighed down with research firm Gartner Inc stating that global IT spending will shrink 5.5% to $3.5 trillion in 2015 as a strong US dollar pressures vendors.

The NSE’s 50-share broadly followed index -- Nifty -- rose by over fifty points to end above the psychological 8,350 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex – surged by over one hundred and thirty points to finish above the psychological 27,750 mark. Moreover, broader markets outperformed benchmarks and ended the session with a gain of over a percentage point. The market breadth remained in the favour off advances, as there were 1,730 shares on the gaining side against 960 shares on the losing side while 131 shares remain unchanged.

Finally, the BSE Sensex up by 135.68 points or 0.49% to 27780.83, while the CNX Nifty gained 50.10 points or 0.60% to 8368.50.

The BSE Sensex touched a high and a low 27814.53 and 27570.95, respectively. The BSE Mid cap index was down by 1.33%, while Small cap index up by 1.07%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.11%, FMCG up by 2.02%, Consumer Durables up by 1.90%, Metal up by 1.73% and PSU up by 0.68%, while IT down by 0.83%, Infrastructure down by 0.33%, TECK down by 0.26% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 3.11%, Tata Steel up by 3.04%, Lupin up by 2.97%, Sun Pharma up by 2.89% and Hindustan Unilever up by 1.82%. On the flip side, TCS down by 1.59%, Wipro down by 1.41%, GAIL India down by 1.28%, ICICI Bank down by 1.08% and Hero MotoCorp down by 1.07% were the top losers.

Meanwhile, NITI Aayog Vice Chairman, Arvind Panagariya has said that India’s growth rate is expected to accelerate to 8 per cent in the current financial year and the economy will surpass $3 trillion mark in less than five years. He said that “I will be greatly disappointed if we do not hit the 8 per cent mark in 2015-16. I expect the economy to hit $3 trillion within five years or less.”Panagariya further stated that the world economy is large and our share in the world exports is still below 2%. So we have a huge scope for growth even in a sluggish world economy. As long as we continue on the reforms path and ensure that the rupee does not become unduly overvalued, we will be well positioned to chip away some of the 12% share that China currently enjoys in the world merchandise exports. He reasoned that wages in China have already risen enough that many manufacturers there are looking for new destinations with lower wages and India is well placed to be that destination.

The NITI Aayog’s Vice Chairman on role of NITI in pushing development agenda of the nation said that “It has a role to play in almost all dimensions. It must help drive the reform agenda at both the central and state levels while also helping formulate policies. Adding that NITI Aayog's two taskforces -on poverty elimination and modernisation of agriculture- are working in cooperation with parallel taskforces in the states, while the three sub-groups of Chief Ministers at work on the Centrally Sponsored Schemes, Swachch Bharat Mission and Skill Development are working under the auspices of the NITI Aayog.

The CNX Nifty touched a high and low 8378.00 and 8298.95 respectively.

The top gainers on Nifty were Zee Entertainment up by 3.72%, Idea Cellular up by 3.59%, Tata Steel up by 3.37%, Coal India up by 3.19% and Ultratech Cement up by 3.14%. On the flip side, TCS down by 1.46%, Tech Mahindra down by 1.38%, Wipro down by 1.29%, GAIL India down by 1.17% and ICICI Bank down by 1.03% were the top losers.

European Markets were trading in the red; UK's FTSE was down 0.96%, Germany’s DAX was down by 1.07% and France’s CAC was down by 0.98%.

Asian markets closed in green on Tuesday, with Shanghai shares surging by more than 5% after plunging by a similar rate on a another day of heightened volatility. Japan’s inflation-adjusted real wages slid in May from a year earlier despite a tightening job market to register a 25th straight month of decline. The data highlights the challenge policymakers face in generating a virtuous cycle, under which rising revenues prompt companies to boost wages so that households increase spending. Total cash earnings rose 0.6% in the year to May, increasing for a second straight month, with regular pay up 0.3%. But inflation-adjusted real wages fell 0.1% in May after a revised decline by the same margin in April, suggesting that consumer spending will remain weak. South Korea’s industrial output slumped in May, with production losses across key automobile, semiconductor and machinery sectors prompting analysts to trim their year-end economic growth forecasts and bringing another rate cut into view. Industrial output in Asia’s fourth-largest economy fell a seasonally adjusted 1.3% in May from April, the third monthly decline. Hong Kong Retail Sales rose to a seasonally adjusted annual rate of -0.1%, from -2.2% in the preceding month.