Benchmarks end higher on Friday

Indian equity benchmarks ended the Friday’s session in green with a gain of around half a percent with frontline gauges ending above their crucial 28,000 (Sensex) and 8,450 (Nifty) levels. Markets after making a cautious start gained momentum and traded in green throughout the session as sentiments remained up-beat with Reserve Bank of India’s (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.

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. Moreover, investors shrugged off report that Services sector has extended the contraction trend for the second straight month in June, with new orders declining for the first time in 14 months. The Nikkei Services Business Activity Index posted 47.7 in June, down from 49.6 in May to its lowest level since March 2014. The index remained below the crucial 50 mark, which separates growth from contraction, for the second straight month.

On the global front, European counters edged down towards their biggest weekly fall in two months on Friday, with focus on a crucial vote in Greece over its debt negotiations at the weekend. Asian markets ended mostly in red as investors grappled with heightened uncertainty tied to Greece ahead of a referendum on Sunday, 5 July 2015, to vote on the country’s status as a euro-zone member.

Back home, some support came with report that foreign portfolio investors bought shares worth a net Rs 575.32 crore yesterday, as per provisional data by the stock exchanges. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 63.47 per dollar at the time of equity market closing against the Thursday’s close of 63.51 on the Interbank Foreign Exchange.

Stocks related to Auto pack remained on buyers’ radar post June auto sales numbers. However, metals’ stocks remained under pressure on slowdown in the Chinese economy with Shanghai Composite closing 6% lower as Beijing's several stimulus measures failed to garner the investor’s confidence.

The NSE’s 50-share broadly followed index Nifty rose by over forty and ended near the psychological 8,500 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred and forty points to finish near the psychological 28,100 mark. Broader markets too struggled to get some traction and ended the session mixed. The market breadth remained in favor of advances, as there were 1,526 shares on the gaining side against 1,454 shares on the losing side while 166 shares remain unchanged.

Finally, the BSE Sensex surged by 146.99 points or 0.53% to 28092.79, while the CNX Nifty gained 40.00 points or 0.47% to 8484.90.

The BSE Sensex touched a high and a low 28135.43 and 27897.45, respectively. The BSE Mid cap index was down by 0.02%, while Small cap index up by 0.03%.

The top gaining sectoral indices on the BSE were Bankex up by 0.76%, Capital Goods up by 0.57%, FMCG up by 0.46%, Healthcare up by 0.41% and Consumer Durables up by 0.33, while Metal down by 1.48%, Realty down by 0.54%, Auto down by 0.39%, Infrastructure down by 0.28%, Oil & Gas down by 0.27% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.53%, Hero MotoCorp up by 1.77%, Lupin up by 1.64%, HDFC Bank up by 1.61% and BHEL up by 1.08%. On the flip side, Vedanta down by 1.93%, Coal India down by 1.63%, Tata Steel down by 1.13%, Wipro down by 0.98% and Tata Motors down by 0.74% were the top losers.

Meanwhile, government will be spending Rs 50,000 crore in next 5 years (2015-16 to 2019-20) under Pradhan Mantri Krishi Sinchai Yojana (PMKSY), in order to improve the farm productivity. This decision was taken in a meeting headed by Prime Minister Narendra Modi  with Cabinet Committee on Economic Affairs (CCEA). This programme will be supervised by Inter-Ministerial National Steering Committee (NSC) under the Chairmanship of the Prime Minister.

At present, about 142 million hectares are used for cultivation out of which only 45 per cent farm land is under irrigation. The PMKSY is a scheme where Central Government has planned to provide irrigation to the country’s agricultural land. The main objective is to expand cultivable area under assured irrigation, to improve on farm water efficiency in order to reduce water wastage and  to increase the  adoption of precision-irrigation and other water-saving technologies. This scheme is aimed to enhancing recharge of aquifers and introducing sustainable water conservation practices by exploring feasibility of re-using treated municipal water for peri-urban agriculture and attracting greater private investment in precision irrigation.

The funds will be given to States with 75% as grant by Central Government and the remaining 25% being borne by State Government. The funding pattern will be 90:10 for north-eastern region and hilly states. Further it was said that the allocation for current fiscal is Rs 5,300 crore. This spending is expected to bring 6 lakh hectares under irrigation and 5 lakh hectares will benefit from drip irrigation, apart from this 1,300 watershed projects is processed for completion.

The CNX Nifty touched a high and low 8,497.75 and 8,424.15 respectively.

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 Wipro down by 1.13% were the top losers.

European Markets were trading in the red; UK's FTSE was down by 0.27%, Germany’s DAX was down by 0.09% and France’s CAC was down by 0.32%.

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.