Benchmarks end choppy session in red

Thursday’s session turned out to be a disappointing day of trade for Indian equity benchmarks where frontline gauges witnessed choppiness and ended in red terrain, as investors remained cautious ahead of Greece referendum on bailout proposal and US non-farm payrolls data to be released later in the day. Sentiments remained down-beat with global rating agency Fitch lowering India's economic growth projections to 7.8 percent for the current fiscal from 8 percent on pickup in demand and said that the country’s business environment is relatively weak compared with peers and will take time to turn around.

After a range-bound session, markets slipped in the negative territory in last leg of trade owing to weakness in the Index heavyweights. Meanwhile, the mood remained skittish after hopes of a last minute deal between Athens and the euro zone dampened. However, losses remained capped with Finance Minister Arun Jaitley’s statement that India is no longer satisfied being in the 6 to 8 percent growth. It wants to transcend to another level and aim for 8 to 10 percent growth.  Some support also came after India Meteorological Department (IMD) reported better than normal monsoon figure in the month of June. Besides, revival of buying by foreign funds after remaining sellers for several sessions, too capped losses.

On the global front, European markets made a positive start and were trading in green early deals with a survey showing more Greeks going against the government’s call to vote against creditors’ terms for more aid. Asian markets ended mostly in the green on hopes for a deal to keep Greece in the eurozone as the country prepares for a crucial weekend referendum, but Shanghai tumbled again despite authorities relaxing trading rules to temper recent volatility.

Back home, foreign portfolio investors bought shares worth a net Rs 75.03 crore yesterday, as per provisional data. On the currency front, the rupee gave up on its initial losses and was trading firm at the time of equity markets closing, up by 8 paise at 63.54levels amid dollar sales by banks and exporters. Meanwhile, the PSU banking stocks extended their jubilation with the Minister of State for Finance Jayant Sinha stating that more capital support will be given to public sector banks, which need an additional Rs 2.40 lakh crore in the next three years to meet Basel III capital adequacy norms. He also acknowledged regulatory issues in listing of stock exchanges, saying the matter is under consideration.

FMCG stocks gained on hopes that normal monsoon rains would help boost rural volumes. Additionally, stocks related to irrigation sector too remained on buyers’ radar after the cabinet approved a central scheme 'Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)' that aims to provide irrigation facilities to every village by converging ongoing schemes being implemented by various ministries.

The NSE’s 50-share broadly followed index Nifty declined by around ten points to end below the psychological 8,450 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex shed by over seventy points to end below its crucial 28,000 mark. However, broader markets outperformed benchmarks and ended with a gain of around half a percent. The market breadth remained in favor of decliners, as there were 1,519 shares on the gaining side against 1,251 shares on the losing side while 116 shares remain unchanged.

Finally, the BSE Sensex declined by 75.07 points or 0.27% to 27945.80, while the CNX Nifty lost 8.15 points or 0.10% to 8444.90.

The BSE Sensex touched a high and a low 28115.96 and 27906.35, respectively. The BSE Mid cap index was up by 0.49%, while Small cap index up by 0.57%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.86%, Auto up by 0.44%, TECK up by 0.30%, FMCG up by 0.28% and PSU up by 0.11%, while Metal down by 0.62%, IT down by 0.41%, Healthcare down by 0.40%, Infrastructure down by 0.34% and Realty down by 0.19% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.13%, Mahindra & Mahindra up by 2.00%, Bajaj Auto up by 1.67%, Axis Bank up by 0.62% and Hero MotoCorp up by 0.56%. On the flip side, Tata Motors down by 1.84%, Hindalco down by 1.72%, HDFC Bank down by 1.33%, Vedanta down by 1.08% and ONGC down by 1.07% were the top losers.

Meanwhile, the World Bank has approved the $650 million debt funding for a part of the eastern arm of the ambitious Dedicated Freight Corridor (DFC) project. This is the third tranche of the World Bank loan EDFC 3, which got approval for the Eastern Dedicated Freight Corridor (EDFC) of 1,840 km long from Ludhiana to Kolkata, and will help build the 401 Km Ludhiana-Khurja section spanning Uttar Pradesh, Haryana and Punjab. The Project will help increase the capacity of these freight lines by raising the axle-load limit from 22.9 to 25 tons and enable speeds of up to 100 km per hour.

The World Bank is supporting the EDFC as a series of projects in which three sections with a total route length of 1,146 km will be implemented. The latest tranche of loan, which comes with a 22-year maturity period, is expected to help in faster and more efficient movement of raw materials and finished goods between the northern and eastern regions, as the eastern and western arms of the DFC project are expected to help India increase the railways' transportation capacity by building high-capacity and high-speed dedicated freight corridors along the Golden Quadrilateral.

The World Bank board had in 2011 approved the first tranche of the loan of $975 million for the 343 Km Khurja-Kanpur section (EDFC1) already under implementation, while in April 2014 it approved the second tranche of the loan of $1.1 billion for EDFC2 which covers 402 km from Kanpur to Mughal Sarai. Under EDFC2, civil works contract for around $800 million have been awarded and contracts worth $240 million for establishing rail systems are under procurement.’

The CNX Nifty touched a high and low 8,479.25 and 8,433.20 respectively.

The top gainers on Nifty were Bosch up by 3.91%, Idea Cellular up by 2.18%, Mahindra & Mahindra up by 2.10%, Kotak Mahindra Bank up by 1.76% and Bharti Airtel up by 1.74%. On the flip side, Tata Motors down by 2.06%, Hindalco down by 1.77%, Grasim Industries down by 1.52%, Vedanta down by 1.51% and Tech Mahindra down by 1.47% were the top losers.

European Markets were trading in the green; UK's FTSE was up by 1.46%, Germany’s DAX was up by 2.08% and France’s CAC was up by 1.08%.

Asian markets closed mostly in green on Thursday, while Shanghai stocks closed lower after another volatile day despite regulators relaxing margin trading rules. The World Bank urged China to accelerate reform of its state-dominated financial sector, warning that failure to address the issue could end three decades of stellar performance for the world’s second-largest economy. A quarterly survey of Bank of Japan showed that more Japanese households feel they are better off than a year ago and are spending more in anticipation that their income will rise, in a sign that improved consumption will underpin a moderate economic recovery. An index measuring households’ sentiment concerning current economic conditions improved for two straight quarters in June, with more than half of the respondents citing rising family income. The upbeat mood came despite rising living costs and expectations of higher prices ahead. Japan’s Monetary Base fell to 34.2%, from 35.6% in the preceding month. Credit ratings agency Moody’s reported that South Korean banks were at risk from a growing number of so-called marginal companies with an extremely high debt burden at a time of worsening profitability in key sectors.