Post Session: Quick Review

Indian equity benchmarks were massacred on Friday with frontline gauges snapping the session below their crucial 26,400 (Sensex) and 8,100 (Nifty) levels, as Britain voted to leave the European Union, fuelling a wave of global uncertainty. Fears are also growing that other EU members too will push for referendums, posing the biggest threat to the future of grouping since its inception almost 60 years ago. After a gap-down start markets extended their southward journey in first half of the session and the indices even went on to test important psychological 26,000 (Sensex) and 7,950 (Nifty) levels, but the key gauges got some support near those intraday low levels, as they trimmed some of their losses from thereon as investors continued hunt for fundamentally strong stocks.

Economic Affairs Secretary Shaktikanta Das downplayed the fears and stated that Britain’s decision to move out of the 28-member European Union (EU) won’t significantly impact India’s trade. The secretary stated that both import and export are not going to be impacted significantly and will be very marginal. Meanwhile, Reserve Bank Governor Raghuram Rajan stated that central bank is continuously maintaining a close vigil on the market developments, both domestically and internationally, and will take all necessary steps, including liquidity support (both dollar and rupee), to ensure orderly conditions in financial markets.

Global cues too remained awful with European counters witnessing mayhem in early deals and CAC, DAX and FTSE all trading with a cut between 4-8 percent in early deals, as David Cameron announced his resignation as Prime Minister of the United Kingdom after the shock victory for the campaign to leave the European Union. Asian counters also fell sharply with Japan’s Nikkei, Hong Kong’s Hang Seng, China’s Shanghai Composite and Singapore’s Straits Times down between 1-8 percent.

Closer home, selling was both brutal and wide-based as none of the sectoral indices on BSE could manage to end the session in green. Counters which featured in the list of worst performers included realty, Industrials and Metal. Depreciation in Indian rupee too dampened the sentiments. The rupee was at 67.92 per dollar at the time of equity markets closing as compared to 67.25 per dollar level on Thursday. On the sectoral front, auto component manufacturers which have substantial exports to Europe, witnessed selling pressure. Stocks in export-led sectors such as pharma and information technology were among the most impacted.

The NSE’s 50-share broadly followed index Nifty tumbled by over one hundred and eighty points to end below the psychological 8,100 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over six hundred points to finish below its psychological 26,400 mark. Broader markets too witnessed selling pressure and ended the session with a cut of around one and a half percentage point.

The market breadth remained in favor of decliners, as there were 701 shares on the gaining side against 1,823 shares on the losing side while 156 shares remain unchanged. (Provisional)

The BSE Sensex ended at 26397.71, down by 604.51 points or 2.24% after trading in a range of 25911.33 and 26435.85. There were 6 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.07%, while Small cap index down by 1.46%. (Provisional)

The top losing sectoral indices on the BSE were Realty down by 3.74%, Industrials down by 3.62%, Metal down by 3.59%, Capital Goods down by 3.30% and Bankex down by 2.69%, while there were no gainers on the BSE sectoral front. (Provisional)

The top gainers on the Sensex were Asian Paints up by 0.86%, Bajaj Auto up by 0.61%, GAIL India up by 0.56%, Mahindra & Mahindra up by 0.19% and Cipla up by 0.17%. On the flip side, Tata Motors down by 8.25%, Tata Steel down by 6.61%, Larsen & Toubro down by 4.44%, ICICI Bank down by 4.01% and ONGC down by 3.99% were the top losers. (Provisional)

Meanwhile, Prime Minister Narendra Modi will launch the work on the Smart City projects in proposed 20 smart cities, selected in the first round of 'Smart City Challenge Competition’ across the country on June 25, 2016. These 20 cities have proposed a total investment of Rs 48,000 crore in area development and pan-city solutions.

On the day of execution of the scheme, the Prime Minister will launch 14 projects under the Smart City Plan of Pune, besides another 69 such projects will be launched the same day through video conference in the remaining 19 smart cities, entailing a total investment of about Rs.1,770 crore.  Marking the first anniversary of the announcement of the government's flagship programme, Modi will launch the 'Smart City Mission' projects from Pune's 5,000-capacity Shiv Chatrapati Sports Complex. The function will be attended by Union Minister M Venkaiah Naidu, Maharashtra Governor C Vidyasagara Rao and Chief Minister Devendra Fadnavis, among others.

The projects to be launched in Pune and other cities include solid waste management under Swachh Bharat Mission, water supply projects, sewage treatment plants and development of open and green spaces under Atal Mission for Rejuvenation and Urban Transformation. It also includes housing projects for urban poor under Pradhan Mantri Awas Yojana and area development and technology based pan-city solutions under Smart Cities Mission.

The prime minister will also inaugurate “Make Your City SMART” contest aimed at involving citizens in various activities, including designing roads, junctions and parks. Suggestions and designs suggested by citizens will be duly incorporated by respective smart cities and winners of this contest will be given rewards in the range of Rs10,000 to Rs 1 lakh. Modi will also inaugurate a Smart Net Portal, which enables the cities under different urban missions to share ideas during the implementation of various missions.

The CNX Nifty ended at 8088.60, down by 181.85 points or 2.20% after trading in a range of 7927.05 and 8100.70. There were 10 stocks advancing against 41 stocks declining on the index. (Provisional)

The top gainers on Nifty were Mahindra & Mahindra up by 1.03%, Bajaj Auto up by 1.01%, Bharti Infratel up by 0.85%, Asian Paints up by 0.55% and GAIL India up by 0.43%. On the flip side, Tata Motors down by 7.90%, Tata Motors - DVR down by 6.64%, Tata Steel down by 6.38%, Hindalco down by 5.33% and Tech Mahindra down by 4.57% were the top losers. (Provisional)

European markets were trading with deep cuts; Germany’s DAX tumbled 626.04 points or 6.1% to 9,630.99, France’s CAC dropped 330.12 points or 7.39% to 4,135.78 and UK’s FTSE 100 was down by 292.46 points or 4.61% to 6,045.64.

Asian equity markets ended deep in red on Friday, as recent optimism that the UK will remain a part of the European Union proved futile. Risk assets were scorched and safe-haven assets such as treasuries, yen and gold came back into the limelight as Britain's historic European Union referendum suggested a stronger than expected performance by the 'Leave' campaign. British Prime Minister David Cameron, who frantically campaigned for a 'stay' in the union, resigned saying the will of the people must be respected. Japanese shares fell as the EU referendum results sent the yen soaring above 100 to its highest level in 21/2 years. Meanwhile, Chinese shares showed limited reaction to the carnage in stock markets across Asia due to tighter control on capital outflows.