Post Session: Quick Review

Tuesday turned out to be a fabulous day of trade for Indian equity benchmarks, where frontline gauges garnered gains of around half a percent with key indices recapturing their crucial 8,100 (Nifty) and 26,500 (Sensex) levels. Markets started cautiously and traded tad above their neutral lines in first half, but extended their northward journey in second half, as traders took some encouragement with the continuous fall in international crude oil prices. Hopes that India will see above-average south-west monsoon rains after two years of drought too bolstered optimism about the domestic economy, helping offset some of the global volatility tied to Britain's vote to leave the European Union last week. Stronger rains, besides benefiting the key rural sector, could also cool down food prices, raising the prospect that the Reserve Bank of India would be more willing to cut interest rates again later this year.

Some support also came on report that the government kicked off the process of setting up a new monetary policy committee after it notified key amendments to a law governing the Reserve Bank of India. Crisil too stated that the Brexit is unlikely to have a notable impact on India's GDP growth this fiscal, even though it will impact sectors like auto and information technology.

Firm opening in European counters too aided sentiments with CAC, DAX and FTSE all trading with a gain of over two percent in early deals, attempting a recovery from the heavy sell-off in the previous two sessions after Britain's shock vote to leave the European Union. Asian markets ended mostly in green, as investors scooped up beaten down stocks at attractive levels. Participants absorbed the shock after Britain decided to exit the European Union

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. The rupee firmed up by 6 paise to 67.88 against the US dollar at the time of equity markets closing at Interbank Foreign Exchange market on fresh selling of the American currency by exporters.

On the sectoral front, stocks related to FMCG space remained on buyers’ radar on expectation that rural volume growth would pick up pace after the MET department stated that monsoon rains are likely to retreat later than normal. Metal stocks too edged higher as copper prices rose in global commodities markets. Shares of public sector oil marketing companies (OMCs) edged higher as global crude oil prices witnessed last two sessions of sharp losses post Britain's vote to exit European Union. On the flip side, stocks related to software counter were witnessing selling pressure on concerns over demand uncertainty from Europe and volatility in the British pound post the Brexit.

The NSE’s 50-share broadly followed index -- Nifty -- rose by over thirty points to end above the psychological 8,100 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- surged by over one hundred and twenty points to finish above the psychological 26,500 mark. Broader markets too traded with traction and ended the session with a gain of around half a percent.  The market breadth remained in the favour of advances, as there were 1,582 shares on the gaining side against 1,014 shares on the losing side while 190 shares remain unchanged. (Provisional)

The BSE Sensex ended at 26524.55, up by 121.59 points or 0.46% after trading in a range of 26378.46 and 26583.33. There were 18 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.48%, while Small cap index gained 0.79%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 2.26%, FMCG up by 1.75%, Metal up by 1.01%, Oil & Gas up by 0.84% and PSU up by 0.78%, while IT down by 0.89%, TECK down by 0.46% and Consumer Durables down by 0.08% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Lupin up by 4.31%, Hindustan Unilever up by 2.94%, ITC up by 2.27%, Mahindra & Mahindra up by 1.46% and Bharti Airtel up by 1.35%. On the flip side, Tata Motors down by 1.84%, Wipro down by 1.29%, Sun Pharma down by 1.15%, TCS down by 1.10% and Adani Ports &Special down by 0.90% were the top losers. (Provisional)

Meanwhile, the much awaited 7th Pay Commission has entered into final lap of finalization as the Empowered Committee of Secretaries, headed by Cabinet Secretary P K Sinha, formed to review 7th Pay Commission’s recommendations has submitted its report and the Cabinet is all set to take up the recommendations on June 29.  Finance Secretary Ashok Lavasa has said that “the committee very recently had their last meeting. They have taken a final decision. Now, we are waiting for the minutes of the meeting. We will soon draft a cabinet note based on the report”.

Earlier in January, the government had set up a high-powered panel headed by Cabinet Secretary to process the recommendations of the 7th Pay Commission which will have bearing on the remuneration of nearly 50 lakh central government employees and 58 lakh pensioners.

The Seventh Pay Commission has announced 23.55% increase in pay and allowances of serving central government employees and 24% increase in pension of retired officers.  However, the government is likely to go for a lower increase and also delay the implementation of the increase in allowances. The total outgo if this award is implemented from January 1, 2016, is pegged at Rs 1.02 lakh crore, providing a bid demand boost to the economy.

The CNX Nifty ended at 8127.85, up by 33.15 points or 0.41% after trading in a range of 8086.85 and 8146.35. There were 29 stocks advancing against 22 stocks declining on the index. (Provisional)

The top gainers on Nifty were Lupin up by 4.43%, Idea Cellular up by 3.99%, Hindustan Unilever up by 3.36%, Bharti Infratel up by 3.33% and Bosch up by 2.83%. On the flip side, HCL Tech down by 2.97%, Tata Motors - DVR down by 2.82%, Tata Motors down by 1.90%, Hindalco down by 1.46% and TCS down by 1.28% were the top losers. (Provisional)

European markets were trading jubilantly; France’s CAC soared 103.12 points or 2.59% to 4,087.84, UK’s FTSE 100 surged 137.21 points or 2.29% to 6,119.41 and Germany’s DAX was up by 196.1 points or 2.12% to 9,464.76.

Asian stocks closed mostly higher on Tuesday, as a rebound in oil prices and hopes for new stimulus measures from South Korea and Japan along with growing expectations that the Federal Reserve will ease its monetary policy at its July meeting, helped investors put Brexit worries on the back burner. Chinese stocks rebounded as the country's leaders sought to calm investors rattled by Britain's vote to leave the European Union. Premier Li Keqiang said the government would take measures to keep its financial and capital markets stable and avoid wild fluctuations. Meanwhile, in its 2016 financial stability report, the People's Bank of China said it would continue to implement prudent monetary policy and proactive fiscal policy. Japanese shares ended a choppy session marginally higher after Economy Minister Nobuteru Ishihara said the government is willing to provide assistance to lessen the impact of the British referendum on small and medium-sized companies (SMEs).