Post Session: Quick Review

Indian markets could not continue the momentum they had gained in last session bucking global trends and ended flat with negative bias on Tuesday, the fatigue appeared in the final hour of trade where marketmen opted to book some profit, otherwise despite a choppy trade major benchmarks were kept themselves in green, for most part of the day as traders resorted to risky assets after the sell-off in the global equity markets stablised. Traders in early deals had also got some encouragement, with French President Francois Hollande and German Chancellor Angela Merkel stating that the door was open for a return to debt negotiations with Greece, but called on Athens to make 'serious' proposals.

On the global front, the rout in Chinese share extended for another day, falling for a fourth time in five days as a flurry of measures to stabilize the market, failed to stop the slide, while other Asian markets made a mixed closing. The European markets after a soft start were showing a choppy trade, as investors’ awaited updates on Greece, with the region’s leaders scheduled to meet later in the day.

Back home, there was some cautiousness in the markets with CRISIL Research in a report stating that India Inc is set to post disappointing quarter results for quarter ended June 30, on the back of soft commodity prices, weak growth in investment linked sectors and subdued rural earnings. The first quarter earnings season will kick off with Tata Consultancy Services announcing its numbers on Thursday. There was concern related to currency as well, as the Commerce and Industry Minister Nirmala Sitharaman said that the government is “very closely” monitoring the developments in Greece as that could have implications on the international currency market. Meanwhile the rupee strengthened on sustained selling of the dollar by exporters and banks, despite its gains overseas. Back on street, the broader markets outperformed, while on sectoral front realty remained the top gainer despite some profit taking in last, followed by consumer durables, healthcare and metals, while IT, tech, auto and power were the major gainers. The PSU oil marketing companies gained with the sharp decline in international crude prices, while aviation stocks surged for second straight session on hopes that the oil marketing companies may cut aviation turbine fuel prices if the current fall in crude oil prices continues. Jet Airways was up by over 7% and Spicejet gained around 5%.The market breadth on the BSE though remained in favour of advances with 1671 shares ending in green against 1152 shares in red, while 117 stocks remained unchanged.

The BSE Sensex ended at 28171.69, down by 37.07 points or 0.13% after trading in a range of 28084.36 and 28335.23. There were 9 stocks on gainers side against 21 stocks on the decliners side on the index.(Provisional)

The broader indices outperforming the benchmarks ended in green; the BSE Mid cap index was up by 0.52%, while Small cap index surged by 0.62%.(Provisional)

The top gaining sectoral indices on the BSE were Realty up by 0.89%, Consumer Durables up by 0.70%, PSU up by 0.12%, Capital Goods up by 0.09%, Metal up by 0.09%, while TECK down by 0.48%, IT down by 0.38%, Power down by 0.31%, Auto down by 0.30%, Oil & Gas down by 0.24% were the losing indices on BSE.(Provisional)

The top gainers on the Sensex were Coal India up by 2.06%, HDFC up by 1.47%, SBI up by 0.66%, Wipro up by 0.66% and Sun Pharma Inds. up by 0.63%. On the flip side, Vedanta down by 2.76%, NTPC down by 2.61%, Hindalco down by 1.65%, Hero MotoCorp down by 1.62% and Reliance Industries down by 1.17% were the top losers.(Provisional)

Meanwhile, supporting the demand of more funds by the public sector banks (PSBs), Reserve Bank of India (RBI) Deputy Governor R Gandhi has said that public sector banks need more capital than budgeted to strengthen their balance sheets and deal with non-performing assets (NPAs). The Deputy Governor further elaborated that banks need capital infusion for three things – ‘to meet Basel III, better provisioning and improving banks business.'

Gandhi stated that follow-on public offers and capital infusion by the government are two ways to raise the capital. Recently, RBI Governor Raghuram Rajan too had stressed that banks should have enough capital so that they can clean up their balance sheet; he has also flagged concerns over inadequate capital infusion.

For the current fiscal 2016, the government had allocated Rs 7,940 crore for state-owned banks. Later after Finance Minister Arun Jaitley assured to provide more than the budgeted amount current fiscal, the government announced its plan to infuse Rs 57,000 crore in PSBs in two years, with an infusion of about $3 billion in the current year and perhaps twice as much in the next year. The government has already assessed capital requirement of public sector banks. Public sector banks will need an additional capital of Rs 2.40 lakh crore by 2018 to meet the Basel III capital adequacy norms.

Earlier, Union cabinet in December 2014, keeping the huge capital requirements in mind, had allowed public sector banks to raise up to Rs 1.60 lakh crore from markets by diluting government holding to 52 per cent in phases.

The CNX Nifty ended at 8510.80, down by 11.35 points or 0.13% after trading in a range of 8483.85 and 8561.35. 20 stocks advanced against 30 declines on the index.(Provisional)

The top gainers on Nifty were Asian Paints up by 5.24%, Coal India up by 2.18%, Ultratech Cement up by 1.91%, HDFC up by 1.50% and Tech Mahindra up by 1.47%. On the flip side, HCL Tech. down by 3.47%, Vedanta down by 2.97%, NTPC down by 2.57%, Hero MotoCorp down by 1.90% and Hindalco down by 1.74% were the top losers.(Provisional)

European Markets were trading in red, Germany’s DAX declined by 31.39 points or 0.29% to 10,859.24, France’s CAC lost 18.79 points or 0.4% to 4,692.75 and UK’s FTSE 100 was down by 3.6 points or 0.06% to 6,532.08.

Asian markets closed mostly in red on Tuesday with Shanghai closing down as analysts warned that government measures to staunch a recent rout will likely not be enough. China’s economy is showing some positive changes as recent government measures gradually gain traction. The National Bureau of Statistics stated that China’s economic performance remained within a reasonable range and economic growth was basically stable. The government is due to release second-quarter gross domestic product data on July 15 and many economists expect growth to dip below 7 percent, which would be the weakest performance since the global financial crisis. South Korea’s central bank is expected to keep interest rates on hold in July after it cut them to a record low the previous month, and the full-year growth forecast could see a modest downgrade. All 28 economists surveyed said the Bank of Korea (BOK) would keep the base rate at 1.50 per cent at its policy meeting on July 9. Taiwanese CPI rose to a seasonally adjusted annual rate of -0.56%, from -0.73% in the preceding quarter.