Post Session: Quick Review

Indian markets came out of their last session’s consolidation mood, shrugging off the developments in Greece with signs of recovery in growth and pick up in investments boosting the sentiment. Traders got a major boost with the RBI Governor Raghuram Rajan stating that growth is recovering and investment is picking up; he however, maintained a cautious stance on inflation expectations, but said that our growth prospects are good and the buffers that we have are reasonable, including foreign exchange. He also said that India’s exposure to Greece is limited and there will be little impact of the fallout. Sensex with gains of over 150 points closed at its 2-1/2 months high. Nifty too coming very close to the 8500 mark ended with gains of around half a percent.

On the global front, after a flat closing of the US markets, the Asian markets made a mixed closing on Friday, with the Shanghai Composite Index tumbling over 5 percent, taking losses since June 12 to 28 percent. Even though the regulators pledged to “strictly” punish stock manipulation. The European markets too made mostly a negative start and the euro rose before Greece’s referendum on the terms of a bailout. Investors are waiting on the result of Greece’s referendum, with Prime Minister Alexis Tsipras vowing to sign off on creditor demands should people vote “yes” on Sunday.

Back home, the markets, recovering from initial sluggishness on weak global cues showed smart moves and though there were intermittent profit booking amid some choppiness, but benchmarks managed to close near the highs of the day. Barring few specific pockets there was broad based buying that helped the markets to move higher bucking global trend. The sentiment was also boosted by better-than-expected progress of the monsoon, with Skymet, a private weather agency, sticking to its forecast stating that Monsoon will be normal in July. Traders even overlooked the report of contraction in the Services sector for the second straight month. Nikkei purchasing managers' index (PMI) fell to 15-month low of 47.7 points in June from 49.6 in May, as new work orders fell. This was the lowest figure since March, 2014.  The pharma stocks kept buzzing led by Lupin , which was up nearly 2% after announcing the acquisition of a 100% equity stake in ZAO “Biocom” in Russia. Lupin was up by about 2%. In other scrip specific action Mahanagar Telephone Nigam (MTNL) rallied by about 20 per cent on reports that the government is planning to delist the stock before merging the telecom operator with Bharat Sanchar Nigam (BSNL).

The BSE Sensex ended at 28109.12, up by 163.32 points or 0.58% after trading in a range of 27897.45 and 28135.43. There were 20 stocks on gainers side against 10 stocks on decliners’ side on the index. (Provisional)

The broader indices though ended in green but underperformed the benchmarks; the BSE Mid cap index was up by 0.06%, while Small cap index gained 0.03%.(Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 0.85%, FMCG up by 0.53%, Capital Goods up by 0.50%, IT up by 0.25%, Power up by 0.09%, while, Metal down by 1.45%, Realty down by 0.60%, Auto down by 0.38%, Oil & Gas down by 0.32%, INFRA down by 0.29% were the losing indices on BSE.(Provisional)

The top gainers on the Sensex were HDFC up by 3.08%, Hero MotoCorp up by 2.00%, HDFC Bank up by 1.71%, Lupin up by 1.56% and NTPC up by 1.05%. On the flip side, Vedanta down by 1.87%, Coal India down by 1.53%, Tata Steel down by 1.23%, Wipro down by 1.13% and Tata Motors down by 0.82% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India (RBI) Governor Raghuram Rajan has expressed his confidence for the economic recovery and said that capital investments are picking up but a stronger growth would require more reforms and clearing bottlenecks for stalled projects. Rajan said that “I would say economy is picking up. We see some signs of capital investment picking up. There is a continuing need, which the government is trying to address, of putting some of the stalled projects back on track.”

Talking further about the stalled projects he said that economic growth will help put projects back on track that are on difficulty. “We are doing everything we can as we work with banks to put it back on track.” He added that we see some signs of capital investment picking up. There is a continuing need, which the government is trying to address, of putting some of the stalled projects back on track.

Rajan said that exports are an area of relative weakness. But they have been weak across the various Asian economies, to the exception of perhaps of China. The weak state of global economy is a big factor there. He added that we need to continue to do the spade work to create sustainable growth and have discussed various plans that the RBI has over the coming years to do that.

The RBI governor talking about the Greece crisis said that India's exposure to Greece was very-very limited. The direct exposure is very limited for India. But there is some indirect exposure like how the Euro would react to the Greece situation.

The CNX Nifty ended at 8485.80, up by 40.90 points or 0.48% after trading in a range of 8424.15 and 8497.75. 35 stocks advanced against 15 declining stocks on the index.(Provisional)

The top gainers on Nifty were Indusind Bank up by 2.80%, HDFC up by 2.49%, Hero MotoCorp up by 2.24%, Lupin up by 1.75% and HDFC Bank up by 1.68%. On the flip side, Tech Mahindra down by 1.93%, Vedanta down by 1.76%, Cairn India down by 1.72%, Coal India down by 1.49% and Tata Power down by 1.13% were the top losers.(Provisional)

European Markets were trading lower, France’s CAC declined 15.25 points or 0.32% to 4,820.31, UK’s FTSE 100 lost 14.89 points or 0.22% to 6,615.58 and Germany’s DAX was down by 4.92 points or 0.04% to 11,094.43.

Asian markets closed mixed on Friday, ahead of Greece’s referendum which prompted investors to cut risky bets. Chinese stocks extended their plunge on back of news that securities regulators are investigating suspected market manipulation. Indonesia’s central bank governor stated that he is not worried the government’s fiscal deficit this year might reach 2.23 percent of gross domestic product, significantly higher than in the budget. He added that the government will not issue additional bonds but will use foreign loans to cover any increase in the deficit. Malaysia’s May exports fell a less-than-expected 6.7 percent from a year earlier, helped by exports to China. Exports, however, shrank for a second straight month due to weak demand for liquefied natural gas, manufactured exports and lower commodity prices. Annual imports continued to decline in May on the back of weaker domestic demand, after a Goods and Services Tax (GST) got implemented on April 1. May’s trade surplus narrowed to 5.51 billion ringgit ($1.5 billion) following a 6.89 billion ringgit surplus the previous month. Japan’s Monetary Base fell to 34.2%, from 35.6% in the preceding month.