Post Session: Quick Review

Wednesday turned out to be yet another fine session for the Indian equity benchmarks, with Nifty and Sensex surging above their crucial 8,200 and 26,700 levels. Buying interest was visible not only in blue chip stocks but in the broader markets as well. Sentiments remained upbeat throughout the session and investors traded with conviction after the Union Cabinet approved a proposal to revise up salaries and pensions for government employees. The panel recommended an overall 23.6% increase in salaries and pension of all central government employees. Also, traders took some encouragement with Reserve Bank of India’s Financial Stability Report (FSR), stating that despite global uncertainties, banking sector issues, the economy stands out in terms of growth as compared to other emerging markets and the Indian financial system remains stable.

Some support also came with Economic Affairs Secretary Shaktikanta Das’ statement that the India is posed for a ‘big leap’ in growth which could touch 8 per cent in the current fiscal on the back of normal monsoon. Rains brought the temperature down by several notches in north India and led to a rise in water levels in major rivers of Uttar Pradesh. The southwest Monsoon has been vigorous over coastal Andhra Pradesh and active over Odisha, east Madhya Pradesh, Konkan and Goa, Chhattisgarh, Telangana and coastal Karnataka.

Markets extended its northward journey in second half of trade with European counters making a firm start with CAC, DAX and FTSE all trading with a gain of around two percent in early deals. Asian markets rallied amid rise in oil prices and hope that policy makers around the world will come up with stimulus measures to blunt the impact of the UK’s decision to leave the European Union.

Back home, appreciation in Indian rupee too aided sentiments, the rupee strengthened 29 paise to 67.66 against the dollar at the time of equity markets closing at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks. Buying in metal and mining stocks too supported sentiments after reports suggested that the Union Cabinet cleared the National Mineral Exploration Policy (NMEP). Auto shares remained on buyers’ radar on hopes that demand for vehicles post the approval of the seventh pay commission. Stocks related to Realty counter edged higher with DLF surging over 8% on reports that the promoters of real estate developer will pump Rs 10,000 crore by purchasing shares in a preferential issue. Shares of retail, food chain and mutiplex companies too edged higher after the Cabinet cleared the Model Shops and Establishments Act 2015.

The NSE’s 50-share broadly followed index Nifty gained around eighty points to end above the psychological 8,200 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over two hundred and ten points to finish above its psychological 26,700 mark. Broader markets too traded with traction and ended the session with gain of around a percentage point.

The market breadth remained in the favour of advances, as there were 1,833 shares on the gaining side against 771 shares on the losing side while 184 shares remain unchanged. (Provisional)

The BSE Sensex ended at 26740.39, up by 215.84 points or 0.81% after trading in a range of 26606.31 and 26776.17. There were 25 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.98%, while Small cap index gained 1.31%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 3.15%, Utilities up by 1.86%, Power up by 1.66%, Auto up by 1.51% and IT up by 1.39%, while FMCG down by 0.14% was the lone losing index on BSE. (Provisional)

The top gainers on the Sensex were Hero MotoCorp up by 3.55%, NTPC up by 2.80%, Wipro up by 2.42%, Power Grid up by 2.32% and GAIL India up by 1.87%. On the flip side, Lupin down by 0.73%, Coal India down by 0.72%, ITC down by 0.64%, Bharti Airtel down by 0.08% and Adani Ports & Special down by 0.07% were the top losers. (Provisional)

Meanwhile, for regulating debt flows into the country, government is likely to come out with a list of hybrid instruments next month, which Indian companies will be able to issue for raising foreign direct investment. Economic Affairs Secretary Das has said that they have completed their deliberation and in next 2-3 weeks they will be coming out with the some new policy initiatives with regard to the hybrid instruments which will get the status of FDI. Das further added, hybrid instruments include optionally convertible or partially convertible debentures, Foreign Currency Convertible Bonds which are intrinsically debt-instruments.

As of now, only instruments which are fully and mandatorily convertible into equity, within a specified time would be reckoned as part of equity under the FDI Policy and eligible to be issued to person’s resident outside India under the Foreign Direct Investment Scheme. Besides equity investment, FDI capital means fully, compulsorily and mandatorily convertible preference shares; fully, compulsorily and mandatorily convertible debentures and warrants.

Finance Minister Arun Jaitley had announced in last Budget that a basket of eligible instruments would be brought in to include hybrid instruments that will expand the scope of instruments that foreigners now use to invest in India. In the past two years, the government has taken a series reform measures to liberalize the FDI regime and recently announced FDI liberalization in nine sectors such as civil aviation, retail and private security services.

The CNX Nifty ended at 8204.00, up by 76.15 points or 0.94% after trading in a range of 8157.65 and 8212.40. There were 43 stocks advancing against 8 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bosch up by 5.40%, Hero MotoCorp up by 4.51%, NTPC up by 2.77%, BHEL up by 2.52% and Power Grid up by 2.44%. On the flip side, Lupin down by 0.76%, Coal India down by 0.73%, ITC down by 0.60%, Hindustan Unilever down by 0.44% and Bank of Baroda down by 0.32% were the top losers. (Provisional)

European markets were trading in green; France’s CAC soared 84.18 points or 2.06% to 4,173.03, Germany’s DAX increased 126.22 points or 1.34% to 9,573.50 and UK’s FTSE 100 was up by 128.26 points or 2.09% to 6,268.65.

Asian stocks ended higher on Wednesday as oil extended overnight gains and solid US economic data as well as hopes of stimulus offset worries about the economic effects of Brexit on the global economy. Reports showed that a gauge of US consumer confidence hit its highest level since October in June, while the US economy expanded more than previously thought in the first quarter of 2016. Investors pushed back bets on US rate increases after US Federal Reserve Governor Jerome Powell said the Brexit result has introduced new uncertainties into the global outlook. Japanese shares climbed as the safe-haven yen steadied and the global markets returned to a semblance of normality. Meanwhile, Japanese Prime Minister Shinzo Abe pledged broad policy support to achieve market stability. Chinese shares ended higher as authorities sought to calm anxiety over potential shifts in Beijing's currency policy following last week's Brexit vote. The yuan held steady, hovering near its 5-1/2-year low against the dollar, after China's two main official securities newspapers said market expectations for the currency remained basically stable with no signs of panic selling.