Benchmarks snap two-day losing streak; Sensex regains 27000 level

After consolidating in the previous two sessions, Indian equity indices managed to pull through a scintillating performance by vivaciously rallying around a percentage points on Thursday, as investors accumulated quality stocks at attractive levels. Though, the session largely remained characterized by choppiness, with sentiment turning better largely in tune with a higher opening in European shares as Britain began voting in a historic referendum on its future in the European Union.  Further, Investors got some relief with the monsoon spreading over many parts of the country, speeding up planting and erasing fears over farm and economic growth after two straight years of drought. The southwest monsoon, after making a delayed entry, has made steady progress and is set to cover the entire country by the end of this month, barring a few pockets in west Rajasthan, west Haryana and Kutch bordering Pakistan.  The June-September rains are crucial for the country’s agricultural sector as around half of the agriculture land is fed by rain. Some support also came with Reserve Bank of India’s (RBI) Governor Raghuram Rajan’s statement that the central bank is watching the situation and will infuse whatever liquidity is needed to keep Indian markets well behaved.

On the global front, Asian markets ended mixed on Thursday as nervous investors counted down to Britain's make-or-break European Union referendum, while Federal Reserve Chair Janet Yellen's cautious tone on future rate hikes added to a subdued mood in markets. 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, European shares soared in early trade as firmer copper prices boosted mining stocks, while hopes among investors that Britain would vote to stay in the European Union also supported markets.

Back home, the benchmark got off to a soft start as the indices extended consolidation in early trade, as pessimistic sentiments prevailed across Asian markets. Thereafter, the key indices remained choppy through the morning trades but saw a sudden spurt in buying in early afternoon trades post the sanguine European market opening. Late hour of the session saw the key gauges capitalize on the momentum further and spurt to session’s highest levels in dying hour. However, a mild profit booking in ensured that the key indices shut shops off the intraday highs. Finally the NSE’s 50-share broadly followed index Nifty, got buttressed by close to a percent to settle below the crucial 8,250 support level, while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated over two hundred points and closed just above the psychological 27,000 mark. Moreover, the broader markets underperformed their larger peers by a good margin as the BSE’s midcap index went home with gains of 0.27%, while the smallcap index declined by 0.04% points. On the BSE sectoral space, the Banking and Auto counters remained the top gainers with over a percent gains followed by the FMCG and Consumer Durables pocket which gained modestly.  On the flipside, Realty counter languished at the bottom of the table with cut of over a percent, while the Power sectors settled with moderate cut.  The market breadth remained pessimistic as there were 902 shares on the gaining side against 1606 shares on the losing side while 184 shares remained unchanged.

Finally, the BSE Sensex surged 236.57 points or 0.88% to 27002.22, while the CNX Nifty rose 66.75 points or 0.81% to 8,270.45.

The BSE Sensex touched a high and a low 27060.98 and 26736.52, respectively. The broader indices made a mix closing; the BSE Mid cap index ended up by 0.27%, while Small cap index was down by 0.04%.

The top gaining sectoral indices on the BSE were Bankex up by 1.61%, Auto up by 1.09%, FMCG up by 0.65%, Oil & Gas up by 0.65%, Consumer Durables up by 0.52%, while Realty down by 1.12% and Power down by 0.49% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.28%, Dr. Reddys Lab up by 2.18%, SBI up by 2.16%, Axis Bank up by 2.04% and HDFC Bank up by 1.65%. On the flip side, NTPC down by 2.10%, Cipla down by 1.53%, TCS down by 0.80%, ONGC down by 0.21% and Hero MotoCorp down by 0.19% were the top losers.

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 traded in a range of 8188.30 and 8285.60. There were 37 stocks advancing against 14 decliners on the index.

The top gainers on Nifty were Tata Motors up by 3.18%, Yes Bank up by 3.14%, Ambuja Cement up by 2.90%, Bank of Baroda up by 2.55% and Dr. Reddys Lab up by 2.35%. On the flip side, Bharti Infratel down by 5.01%, NTPC down by 1.87%, Cipla down by 1.34%, Tata Power down by 0.88% and Eicher Motors down by 0.88% were the top losers.

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.