Benchmarks end higher on firm global cues

Indian equity benchmarks ended the choppy day of trade in green terrain with a gain of over one third of a percent on Friday. Markets after a positive start alternately swung between positive and negative zone in noon deals, but hectic buying activity which took place during last leg of trade mainly drove the markets higher on the back of improved prospects for a deal to keep Greece in the currency area at a weekend summit of European leaders. Investors also reacted positively on reports that negotiations on India-Mauritius double taxation avoidance agreement DTAA are in very advanced stage. Some support also came after International Monetary Fund (IMF), which in its World Economic Outlook Update said that India will be the world’s fastest growing economy for the second consecutive year in 2016 at 7.5 per cent.

However, gains remained capped on concern about the monsoon progress as the India Meteorological Department (IMD) reported that after a month of adequate showers in June, monsoon rainfall in India was 51% less than normal last week. It warned that rainfall activity is expected to be subdued over many parts of western India, central India and interior peninsula. Investors also remained on sidelines ahead of the Industrial Production data to be released later in the day.

On the global front, European counters were trading mostly in green after the Greek government placed a cash-for-reforms proposal to creditors on Thursday. Eurozone finance ministers will meet on July 11 to review the Greek request. Asian markets ended mostly in green, led by Chinese market which rallied by around five percent in the wake of drastic measures announced by regulators to calm the markets.

Back home, sentiments weighed on reports that foreign investors sold shares worth Rs. 254.10 crore yesterday, as per provisional data. Selling in fast moving consumer goods companies (FMCG) counter too dampened the sentiments, on concerns that an uptick in inflation amid fears of poor monsoon and unfavorable business environment in the rural markets hurt the sentiments. Shares of telecom companies were trading lower after the govt. ordered special audit of mobile networks to check call drops, according to media reports. On the flip side, shares related to Capital Goods space edged higher on expectations of higher industrial growth in May lifted the sentiments. Metal related stocks too showed some recovery on strength in Chinese market.

The NSE’s 50-share broadly followed index Nifty rose by over thirty points and ended above the psychological 8,350 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by around ninety points to finish above the psychological 27,600 mark. Broader markets too traded with traction and ended the session with a gain of around quarter of a percent. The market breadth remained in favor of advances, as there were 1,432 shares on the gaining side against 1,374 shares on the losing side while 118 shares remain unchanged.

Finally, the BSE Sensex gained 87.74 points or 0.32% to 27661.40, while the CNX Nifty added 32.00 points or 0.38% to 8360.55.

The BSE Sensex touched a high and a low 27729.46 and 27530.90, respectively. The BSE Mid cap index was down by 0.24%, while Small cap index down by 0.19%.

The top gaining sectoral indices on the BSE were Bankex up by 1.15%, Healthcare up by 0.98%, Capital Goods up by 0.95%, Metal up by 0.90% and Oil & Gas up by 0.33 while, Realty down by 0.81%, FMCG down by 0.69%, TECK down by 0.68%, IT down by 0.42% and Consumer Durables down by 0.42% were the losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 5.04%, Sun Pharma up by 3.34%, BHEL up by 1.70%, HDFC Bank up by 1.53% and Reliance Industries up by 1.44%. On the flip side, Bharti Airtel down by 3.34%, Hindustan Unilever down by 2.08%, GAIL India down by 1.97%, TCS down by 1.96% and ONGC down by 1.77% were the top losers.

Meanwhile, PM Narendra Modi in a meeting with Brazilian President Dilma Rousseff said that, FDI cap in the area of special technology will be raised to 100% for greater cooperation with Brazil and South Africa in the field of defence and other areas. Talking about the naval exchanges, fleet review he said the two countries could later have joint exercises. He also pushed for cooperation in the field of agriculture, saying there were possibilities in areas like food processing and genome research and  added that some Indian equipment is already being used in Brazilian jets.

While detailing  Modi’s discussion, Secretary (West) in the Ministry of External Affairs Navtej Sarna said, there was a request from Modi to expand the list of items from the current 450 to 2000 which are traded between India and MERCUSUR (a grouping of Latin American countries), which may have a greater impact on business. He further said that Modi pitched for more cooperation in the field of defence, including joint production of equipment with Jacob Zuma (President of South Africa) and the transfer of technology, which can also help the developing nations to meet the challenge in the climate change.

During the meeting there was a discussion of upcoming meeting on climate change, where PM  favored the coordination among BASIC (Brazil, South Africa, India and China) countries to have a common position and also said that  greater transfer of technology would help developing nations to meet the challenge of climate change.

The CNX Nifty touched a high and low 8,377.10 and 8,315.40 respectively.

The top gainers on Nifty were Vedanta up by 5.62%, Sunpharma up by 3.85%, Grasim Industries up by 2.37%, Zee Entertainment up by 2.27%, and Cairn up by 2.24%. On the flip side, Bharti Airtel down by 3.48%, Idea Cellular down by 2.86%, Hindustan Unilever down by 2.78%, TCS down by 2.20 % and Baja Auto down by 1.76% were the top losers.

European Markets were trading in the green; UK's FTSE was up by 1.18%, Germany’s DAX was up by 2.04% and France’s CAC was up by 2.90%.

Asian markets closed mostly in green on Friday, with China’s benchmark index closing higher, taking its two-day rise over 10% as government moves to boost the flagging market saw sentiment recover. Singapore’s economic growth is expected to have slowed down in the second quarter as sluggish global demand hurt the city-state’s manufacturing sector. Japanese wholesale prices fell 2.4% in the year to June to mark the third straight month of declines, as soft demand in China drove down commodities markets. While declines in raw material costs benefit Japanese manufacturers, they will keep life difficult for the Bank of Japan as it strives to accelerate consumer inflation toward its ambitious 2% target. Excluding the effect of last year’s sales tax hike, wholesale prices fell 2.5% in the year to June. That marked the eighth straight month of declines and the biggest drop since January. China’s vehicle sales will only grow 3% year-on-year in 2015, in a major downward revision of its prediction for the year. The China Association of Automobile Manufacturers (CAAM) in January stated that it expected combined sales for passenger and commercial vehicles to grow 7% to 25.1 million this year, compared with 6.9% in 2014. Malaysian Industrial Production rose to a seasonally adjusted annual rate of 4.5%, from 4.0% in the preceding month.