Post Session: Quick Review

Buying activity which took place during last leg of trade drove the markets higher and key domestic benchmarks showcased an enthusiastic performance on Thursday, by rallying around a percentage point. Earlier, the markets started on a cautious note and traded choppy for most part of the day’s trade, as traders remained on sidelines ahead of the Brexit poll outcome later today, which will decide whether Britain would remain in the European Union or not. However, rally in last leg of trade mainly helped the frontline indices not only end the session near intraday high levels but also recapture their crucial 8,250 (Nifty) and 27,000 (Sensex) bastions, as investors took to hefty across the board buying. Traders took some encouragement with government’s approval of setting up of a ‘Fund of Funds for Startups’ with a corpus of Rs 10,000 crore at SIDBI (Small Industries Development Bank), in line with the Start-up India Action Plan unveiled by it in January.

Positive opening in European counters too provided some support to the domestic markets. CAC, DAX and FTSE were trading with traction in early deals, as firmer copper prices lifted mining stocks, while expectations among financial investors that Britain would vote to stay in the European Union also supported markets. Asian markets ended mixed, as investors remain edgy ahead of the UK vote. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Appreciation in Indian rupee too aided sentiments. Rupee appreciated 18 paise to 67.29 against the US dollar at the time of equity markets closing on increased selling of the American currency by bankers and exporters. Some support also came with Reserve Bank of India’s (RBI) Governor Raghuram Rajan stating that the central bank is watching the situation and will infuse whatever liquidity is needed to keep Indian markets well behaved.

On the sectoral front, stocks related to auto counter remained on buyers’ radar on the back of advancement of monsoon. Select stocks from textile space too edged higher after government announced Rs 6,000-crore package for the textiles and apparels sector to help it wrest a bigger share of the global market. On the flip side, telecom stocks remained under pressure after Union Cabinet approved norms for the biggest-ever spectrum auction, which could make exchequer richer by no less than Rs 5.66 lakh crore. The aviation stocks too reacted negatively to a statement from civil aviation secretary Rajeev Nayan that the government’s intention in raising the FDI limit in scheduled domestic airlines to 100% via the approval route was not to let foreign airlines acquire Indian carriers.

The NSE’s 50-share broadly followed index -- Nifty -- rose by around seventy points to end above the psychological 8,250 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- surged by around two hundred and forty points to finish above the psychological 27,000 mark. Broader markets however struggled to get any traction and ended the session mixed on Thursday.

The market breadth remained in favour of decliners, as there were 1,095 shares on the gaining side against 1,495 shares on the losing side, while 185 shares remain unchanged. (Provisional)

The BSE Sensex ended at 27002.22, up by 236.57 points or 0.88% after trading in a range of 26736.52 and 27060.98. There were 23 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.27%, while Small cap index was down by 0.04%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 1.61%, Auto up by 1.09%, Finance up by 1.08%, Industrials up by 0.83% and Healthcare up by 0.73%, while Realty down by 1.12%, Telecom down by 0.51%, Power down by 0.49% and Utilities  down by 0.49% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 3.23%, Dr. Reddys Lab up by 2.19%, SBI up by 2.11%, HDFC Bank up by 1.87% and Axis Bank up by 1.66%. On the flip side, NTPC down by 1.74%, Cipla down by 1.51%, TCS down by 0.82%, Asian Paints down by 0.41% and ONGC down by 0.34% were the top losers. (Provisional)

Meanwhile, the government has extended the timeline for states to join the Ujwal Discom Assurance Yojana (UDAY), meant for the revival of debt-laden discoms, by one year till 31 March, 2017 from the earlier stipulated date of March 31, 2016. The proposal is cleared in order to facilitate all states that want to benefit from the scheme and could not join scheme or issue bonds to pay off discoms debt due to various reasons like elections and regulatory approvals.

Under the UDAY scheme, the states were required to join the scheme formally last fiscal and issue bonds to pay off discoms 50 percent debt in 2015-16 and were supposed to issue bonds to pay off additional 25 percent of the discoms debt in the current fiscal. However, some states could not join the scheme and some could not issue bonds due to various reasons. As with this decisions, these state would be able issue the bonds to pay of 75 percent of state discoms debts as on September, 30, 2015 during the current fiscal itself.

Till date, 19 states have agreed to join the UDAY scheme. The discoms have total outstanding debt of Rs 4.3 lakh crore as on September 30, 2015. States that have joined UDAY issued bonds of nearly Rs 1 lakh crore in 2015-16 under the scheme to clear 50 per cent of the outstanding debt. Further, as per the requirement of the scheme, discoms bonds worth Rs 11,524 crore were floated. In the current fiscal, bonds worth Rs 14,801 crore have been floated by Uttar Pradesh.

Launched in November last year, UDAY scheme deals with the burgeoning debt of discoms in the country. It was estimated that outstanding debt of discoms has increased from about Rs 2.4 lakh crore in 2011-12 to about Rs 4.3 lakh crore in 2014-15, with interest rates upto 14-15 percent. It was also estimated that state discoms suffer a loss of over Rs 60,000 crore every year. The main objective of the scheme is to get these discoms out of circle of debt and allow them to buy power to increase consumption in the country.

The CNX Nifty ended at 8270.45, up by 66.75 points or 0.81% after trading in a range of 8188.30 and 8285.60. There were 37 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 3.23%, Yes Bank up by 2.96%, Ambuja Cement up by 2.90%, SBI up by 2.18% and Dr. Reddys Lab up by 2.14%. On the flip side, Bharti Infratel down by 5.01%, NTPC down by 2.29%, Cipla down by 1.39%, TCS down by 0.84% and Tata Power down by 0.81% were the top losers. (Provisional)

European markets were trading firm; France’s CAC soared 92.29 points or 2.11% to 4,472.32, UK’s FTSE 100 surged 99.89 points or 1.6% to 6,361.08 and Germany’s DAX was up by 227.3 points or 2.26% to 10,298.36.

Asian stocks ended mixed on Thursday as investors positioned themselves for the outcome of Britain's referendum on its European Union (EU) membership. Polling stations across the UK opened at 7 a.m. local time, with a record-setting 46.5 million people registered to cast their ballot by 10 p.m. Meanwhile, Chinese shares slipped amid the uncertainty surrounding the Brexit vote, after a string of polls indicated the vote is too close to call, on the other hand the Japanese shares rose sharply as the yen held weaker on optimism the 'Remain' campaign is set for a comfortable victory in the EU referendum.