Boisterous benchmarks display spirited performance; Sensex ends over 27000 mark

Indian stock markets witnessed mostly a stable day of trade on Tuesday, as investors remained optimistic after RBI Governor Raghuram Rajan's accommodative policy stance and US Federal Reserve Chair Janet Yellen's comments.  Sentiments got some support with India Meteorological Department’s (IMD) statement that the Southwest monsoon is ‘very likely’ to hit Kerala on June 9 following favourable conditions. The weather office has forecast rain at a few places in South Tamil Nadu and over one or two places in the northern parts of the state for the next 48 hours. Besides, appreciation in the rupee against dollar too supported sentiments. Indian rupee strengthened by 21 paise to 66.75 at the time of equity markets closing on sustained selling of dollar by banks and exporters amid strong foreign fund inflows. Some support also came with a private report that India’s economic growth is expected to accelerate to about 8.1 per cent in the current financial year on the back of better monsoon prospects and growth in consumption demand. Meanwhile, financials were among the top gainers with State Bank of India (SBI) up over 5.4 percent after the RBI kept key policy rates unchanged.  FMCG counter witnessed hefty buying on hopes that above normal monsoon would boost rural volumes, While some good buying also witnessed in mining and metal stocks amid a global rally in base metal prices after the US dollar fell to a three-week low against a basket of global currencies.

On the global front, Asia markets ended mostly in green after US Federal Reserve Chair Janet Yellen gave a largely upbeat assessment on the US economic outlook, while the dollar declined on diminishing expectations of interest rate increase in coming months. In a speech Monday, Federal Reserve Chair Janet Yellen stressed that the U.S. economy appears fundamentally solid despite a jobs report for May released Friday that showed the weakest monthly gain in more than five years. She noted that other gauges of the job market have been more positive and also shied away from sketching any timetable for when the Fed might raise interest rates again because of so many uncertainties. Further, Japanese stocks rose as energy shares rallied on higher oil prices and the yen weakness against US dollar, while Chinese shares closed marginally higher ahead of the MSCI's decision on June 14, 2016. Meanwhile, European Markets traded on firm note in early trade, while trading in the US index futures suggested that Wall Street stocks may open Tuesday's session higher, carrying on from where they left yesterday.

Back home, the benchmark got off to a promising start as investors largely remained influenced by encouraging global developments and up-move in Asian markets after comments from Fed Chair Janet Yellen remained positive on the economy. Even through the frontline indices traded in tight range in morning deals ahead of the RBI’s second bi-monthly policy meet this fiscal, the indices managed to gradually gain traction in the second half of trade as they touched the intraday highs on the back of broad based bottom fishing in undervalued stocks. However, a mild profit booking in dying hour of trade ensured that the key indices shut shops off the intraday highs. Finally the NSE’s 50-share broadly followed index Nifty, got buttressed by over half a percent to settle above the crucial 8,250 support level, while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated two hundred and thirty two points and closed just above the psychological 27,000 mark. On the BSE sectoral space, Realty counter remained the top gainer with around two percent gains, followed by the Banking and Consumer Durables indices which ended with gains of 1.63% and 1.57% respectively. However the Oil & Gas and information technology pocket remained the only sectoral index that languished in the red zone with modest cut.

The market breadth was pessimistic as there were 1484 shares on the gaining side against 1122 shares on the losing side, while 169 shares remained unchanged.

Finally, the BSE Sensex gained 232.22 points or 0.87% to 27009.67, while the CNX Nifty rose 65.40 points or 0.80% to 8,266.45.

The BSE Sensex touched a high and a low 27082.63 and 26829.53, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 0.29%, while Small cap index up by 0.96%.

The top gaining sectoral indices on the BSE were Realty up by 1.70%, Bankex up by 1.63%, Consumer Durables up by 1.57%, FMCG up by 1.35% and Metal up by 1.30%, while Oil & Gas down by 0.14%, TECK down by 0.05% and IT down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 5.40%, ICICI Bank up by 4.31%, ITC up by 1.97%, Sun Pharma Inds. up by 1.77% and Hindustan Unilever up by 1.59%. On the flip side, Infosys down by 0.78%, Reliance Industries down by 0.13%, HDFC down by 0.10%, GAIL India down by 0.07% and Dr. Reddys Lab down by 0.03% were the top losers.

Meanwhile, promising a transparent regulatory regime and greater ease of doing business, Union Oil Minister Dharmendra Pradhan kicked off the first road show for auctioning 46 discovered small oil and gas fields. He expressed confidence of getting good response for the blocks which are being sold with least conditionalities and added that the bid round aims to boost the oil and gas production and is in line with the government mission of reducing import dependence by 2022 by 10 per cent from the present 78 per cent which the country meets through imports.

Pradhan said that the government is offering for bidding 67 discovered small fields in 46 contract areas spread over nine sedimentary basins on land and in shallow and deep water areas. Of the 46 small fields, 26 are on land, 18 offshore in shallow water and two in deep water. While 28 discoveries are in the Mumbai offshore, another 14 are in the east coast's Krishna Godavari basin. The fields offered hold 625 million barrels of in-place of oil and gas reserves of oil or oil equivalent gas of in-place reserves worth Rs 70,000 crore. The present auctions, to be conducted on simpler contractual terms together with pricing and marketing freedom, will be the first licensing round in over five years.

These blocks were originally discovered by ONGC and Oil India some 40 years ago, but surrendered these fields as they could not develop them because of huge overhead cost and uneconomic size. However, Pradhan said that these national exploration companies will not get compensation from the bidders at all. Bidding will open on July 15 and will end on 31st October 2016. In two months investors will be selected and contracts will be signed by January.

Pradhan added that the current auction and recently announced Hydrocarbon Exploration and Licensing Policy (HELP), are both significant improvements over the previous New Exploration Licensing Policy (NELP) regime. NELP was based on production sharing contract (PSC) which meant revenue sharing with government after cost recovery by the contractor. In March 2012, the last exploration licensing round was concluded which was the ninth round of bidding under NELP where a total of 256 blocks were awarded. Further, the next round of roadshows will be held in Bengaluru and Guwahati, while international roadshows will be conducted in London, Houston, Calgary in Canada, Dubai, Singapore and Perth in Australia.

The CNX Nifty traded in a range of 8,294.95 and 8,216.40. There were 37 stocks advancing against 14 decliners on the index.

The top gainers on Nifty were SBI up by 5.66%, ICICI Bank up by 4.52%, Ultratech Cement up by 3.38%, Hindalco up by 2.62% and Ambuja Cement up by 2.56%. On the flip side, BPCL down by 1.91%, Indusind Bank down by 1.22%, Tata Power down by 1.55%, Aurobindo Pharma down by 0.93% and Infosys down by 0.85% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 40.56 points or 0.65% to 6,313.96, France’s CAC surged 58.58 points or 1.32% to 4,481.96 and Germany’s DAX was up by 171.31 points or 1.69% to 10,292.39.

Asian equity markets ended higher on Tuesday, as dovish comments from Federal Reserve Chair Janet Yellen eased concerns about possible capital outflows from the region. In her first comments since Friday's awful US jobs report, Yellen said on Monday that recent signs of a slowdown in job creation bear close watching. While delivering a generally upbeat assessment of US economic conditions, she omitted her recent assessment that interest rate hikes were likely in the coming months. Chinese shares closed marginally higher ahead of the MSCI's decision on June 14. Investors were expecting that MSCI will decide next week to add some China ‘A’ shares to its emerging market index. Japanese shares rebounded from a four-week low as the dollar regained some ground against the yen.