Post Session: Quick Review

Monday turned out to be a fabulous day of trade for Indian equity benchmarks, where frontline gauges garnered gains of around a percent with key indices recapturing their crucial 8,200 (Nifty) and 26,800 (Sensex) bastions. Soon after making a gap-down opening, domestic markets staged smart recovery to enter into green terrain and there hardly appeared any profit booking in the session as the benchmarks managed to fervently gain from strength to strength, with investors’ continued hunt for fundamentally strong stocks, as they digested Reserve Bank of India’s (RBI) Governor Raghuram Rajan’s decision of not going for a second term. Also, the global rating agency Fitch stated that India’s sovereign ratings will not be affected solely by the unexpected departure of central bank governor Raghuram Rajan at the end of his term in September.

The government’s announcement of a further liberation of foreign direct investment (FDI) in aviation, pharmaceutical, defence, trading in food products and single brand retail trading too aided gains on the domestic bourses. Traders also 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.

Buying got extended after European markets made a jubilant opening. CAC, DAX and FTSE were trading with a huge gain of around three percent in early deals. Most of the Asian equity indices ended in green 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, some support also came with Economic Affairs Secretary Shaktikanta Das’ statement 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. Meanwhile, External Affairs Minister Sushma Swaraj stated that India has received $55 billion in FDI in the last two years, noting enhanced economic engagement with countries across the world has been a major priority area of the government’s foreign policy. On the sectoral front, 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. Aviation stocks flied high after the government liberalized the FDI norms in civil aviation sector. Defense stocks too edged higher with the government allowing FDI in defence sector of upto 100%.

The NSE’s 50-share broadly followed index -- Nifty -- rose by around seventy points to end above the psychological 8,200 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- surged by over two hundred and forty points to finish above the psychological 26,800 mark. Broader markets too traded with traction and ended the session with a gain of around half a percent.

The market breadth remained in favour of advances, as there were 1,383 shares on the gaining side against 1,198 shares on the losing side, while 202 shares remained unchanged. (Provisional)

The BSE Sensex ended at 26866.92, up by 241.01 points or 0.91% after trading in a range of 26447.88 and 26885.49. There were 20 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.40%, while Small cap index up by 0.37%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 2.00%, TECK up by 1.97%, Industrials up by 1.50%, Auto up by 1.49% and Metal up by 1.40%, while FMCG down by 0.06% was the lone losing index on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 4.23%, Tata Steel up by 3.44%, Infosys up by 2.85%, Bharti Airtel up by 2.33% and TCS up by 1.94%. On the flip side, ITC down by 0.65%, Asian Paints down by 0.64%, Axis Bank down by 0.60%, Sun Pharma down by 0.58% and Lupin down by 0.51% were the top losers. (Provisional)

Meanwhile, Power, Coal, New and Renewable Energy Minister Goyal though supporting government’s disinvestment plan for public sector undertakings (PSUs) has said that his ministry will not reduce the government stake in power sector PSUs below 51 per cent and added that the management and control of the PSUs should remain with the government.

Goyal further said that as far as disinvestment is concerned, Finance Minister can do whatever he want to do and his ministry will support completely. He has announced the same to CoaI India and other PSUs under power sector.

Goyal’s comments has come after the Niti Aayog recently submitted two separate list of state-run companies to Prime minister for dealing with sick units and those PSUs where strategic sale is possible. Under strategic sale of PSUs, government wants to reduce its stake to 49 per or below and wants it to be privatized.

For the current financial year, the government has set a disinvestment target of Rs 56,500 crore for the fiscal. Of this, Rs 36,000 crore is to come from minority stake sale in PSUs and Rs 20,500 crore from strategic sale.

The CNX Nifty ended at 8238.50, up by 68.30 points or 0.84% after trading in a range of 8107.35 and 8244.15. There were 36 stocks advancing against 15 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 3.80%, Tata Steel up by 3.32%, Ambuja Cement up by 2.59%, Tata Motors - DVR up by 2.56% and Infosys up by 2.48%. On the flip side, Axis Bank down by 0.84%, Asian Paints down by 0.81%, Eicher Motors down by 0.63%, ITC down by 0.50% and Sun Pharma down by 0.45% were the top losers. (Provisional)

European markets were trading in green; France’s CAC surged 121.55 points or 2.9% to 4,315.38, UK’s FTSE 100 soared 156.26 points or 2.6% to 6,177.35 and Germany’s DAX was up by 296.69 points or 3.08% to 9,928.05.

Asian equity markets ended higher on Monday, as worries over a potential British exit from the European Union receded and a weaker dollar supported commodity prices. Safe-haven assets and currencies like gold, government bonds and the yen retreated after three opinion polls on the EU referendum suggested the 'Remain' campaign is pulling back into the lead following the murder of pro-EU MP Jo Cox. A UK exit from the European Union could seriously hurt the British economy and possibly lead to a recession next year, the International Monetary Fund has warned. Separately, Prime Minister David Cameron warned Sunday of a painful hit to Britain's economy if it quits the EU on Thursday's Brexit vote. The dollar weakened broadly against its rivals after St. Louis Fed President James Bullard issued a position paper on Friday saying he thinks there will be just one interest rate hike through 2018 and the Federal Reserve is eroding its credibility by indicating otherwise. Japanese shares rose sharply to hit a one-week high, aided by a weaker yen. Investors shrugged off sluggish trade data showing a fall in Japanese exports for an eighth consecutive month in May. Chinese shares ended flat, bucking the upward trend in Asian markets, as sentiment was subdued amid concerns of yuan depreciation and a fresh regulatory crackdown on shell companies raising funds from external sources in backdoor listings, offset positive home price data. China's property sector continued to recover but at a slower pace in May, with gains spreading to smaller cities, an official survey released over the weekend showed.