Benchmarks bounce back in green after a weak start

After making a weak start, Indian equity benchmarks witnessed a decent recovery and bounced back into green terrain, as investors digested Reserve Bank of India’s (RBI) Governor Raghuram Rajan’s decision of not going for a second term and bow out in September. Traders took some encouragement with report that quick progress of monsoon in last one-two days has taken the crucial weather system to many new regions and is expected to intensify in the days ahead. Firm cues from regional counters too aided sentiments. Most of the Asian equity indices were trading in green at this point of time as fears of Britain exiting the European Union eased on Monday, boosting a recovery in both sterling and investors’ taste for risk assets. Back home, infra stocks remained on buyers’ radar after Prime Minister Narendra Modi set targets for key ministries that have to be delivered by end of the financial year to effect visible change on ground. Oil and gas counter edged higher, led by surge in Oil India and BPCL after their consortium acquired stake in Russian oil & Gas Company.

The BSE Sensex is currently trading at 26695.80, up by 69.89 points or 0.26% after trading in a range of 26447.88 and 26714.43. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.07%, while Small cap index gained 0.06%.

The top gaining sectoral indices on the BSE were Realty up by 1.11%, IT up by 1.06%, TECK up by 0.94%, Capital Goods up by 0.79% and Industrials up by 0.62%, while Consumer Durables down by 0.40%, Healthcare down by 0.25%, Bankex down by 0.15%, Power down by 0.14% and Finance down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.17%, Dr. Reddys Lab up by 0.79%, Infosys up by 0.69%, TCS up by 0.67% and Mahindra & Mahindra up by 0.63%. On the flip side, Axis Bank down by 1.03%, Asian Paints down by 0.99%, Lupin down by 0.98%, Coal India down by 0.77% and ICICI Bank down by 0.69% were the top losers.

Meanwhile, expressing optimism for the strong growth rate of the country, Economic Affairs Secretary Shaktikanta Das has said that the country's GDP growth is likely to touch 8 per cent in the current fiscal 2016-17, on the back of above normal monsoon. Das expressed hope that the likely passage of Goods and Services Tax (GST) bill in Parliament would add to the business sentiment and will further help in country’s growth. The Economic Affairs Secretary said “we will certainly exceed 7.6 per cent growth. If the monsoon is good which we expect it will be because of the forecast and once the GST is passed, we can expect our GDP to touch 8 per cent in the current fiscal'.

The government is hoping to get the Constitution Amendment Bill passed by Parliament in the upcoming Monsoon Session and plans to roll-out GST from April 1, 2017. Stating the importance of the GST bill, Das said that the passage of the bill would significantly help in boosting sentiment and generating economic activity. Once GST is passed in the parliament, the business environment will show improvement and will boost business sentiment and economy. Once the sentiment turns positive, the business will also start the process of re- orienting their business for GST purpose and hence there will be lot of spurt in activity.

India Meteorological Department (IMD) had earlier forecasted this year 96 per cent chances that the rainfall would be “normal to excess”. However, the slow progress of the south-west monsoon has led to overall deficiency of rains by 22 per cent from June 1-15. Economic Survey in February had projected a growth rate of 7-7.75 per cent for the current fiscal while RBI had forecast 7.6 per cent for the current fiscal.

The CNX Nifty is currently trading at 8183.10, up by 12.90 points or 0.16% after trading in a range of 8107.35 and 8190.30. There were 23 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 2.65%, Larsen & Toubro up by 1.34%, Tech Mahindra up by 1.22%, TCS up by 1.20% and Tata Motors - DVR up by 1.06%. On the flip side, Axis Bank down by 1.32%, Asian Paints down by 1.13%, Aurobindo Pharma down by 1.13%, Bharti Infratel down by 1.05% and Lupin down by 1.02% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 8.96 points or 0.55% to 1,633.14, KOSPI Index surged 28.17 points or 1.44% to 1,981.57, Taiwan Weighted gained 53.32 points or 0.62% to 8,621.40, Hang Seng strengthened 218.51 points or 1.08% to 20,388.49 and Nikkei 225 was up by 355.22 points or 2.28% to 15,954.88. On the flip side, Shanghai Composite decreased 5.02 points or 0.17% to 2,880.08 and Jakarta Composite was down by 3.98 points or 0.08% to 4,831.16.