Post Session: Quick Review

Indian markets extended their rally mood to the new week and surged by around half a percent on Monday to make it a six day winning streak, as investors kept betting big on the good progress in monsoon rains and firming Asian cues. While the Asian markets moved higher amid expectations that leading central banks will add to monetary stimulus, the domestic traders got big boost with report from Indian Meteorological Department that Monsoon rains have covered nearly all of India except some parts of the western states of Gujarat and Rajasthan, with the remaining region likely to be covered this week too. The rainfall deficit has reduced to 6 percent, sharply down from 18 percent in the first week of June. The strength in domestic currency too supported the markets, Indian rupee strengthened for the fourth consecutive session to hit a two-week high against the US dollar. There was broad based buying and the Nifty50 reclaimed its crucial level of 8,350 supported by gains in realty, power, oil & gas, metals, capital goods, and banking stocks.

On the global front, last week gains in the US markets gave a positive lead to the Asian markets and all the markets in the region moved higher on hopes that the major economies will step up monetary stimulus in the wake of Britain’s decision to leave the European Union. Hong Kong market was in most jubilant mood and posted gains in excess of a percent. Later the European markets to made a green start, as the crude prices increased and there was rally in miners of precious metals.In the UK uncertainty surrounding the Brexit vote continued to be felt as Markit's construction Purchasing Managers' Index fell to 46.0 in June from 51.2 in May, the lowest level since June 2009.

Back home, the domestic markets which have been showing a clear outperformance since last week following the Brexit vote, kept the momentum going and made a gap-up start in the morning, supported by broad based buying. The trade remained smooth for most part of the day, as the traders kept accumulating value stocks and by the mid of the day, both the benchmarks surged to their highest point of the session and Nifty came very close to breaching the 8400 level, however mild profit taking appeared afterwards and benchmarks pared their gains with European markets despite a positive start losing pace, though the local bourses managed to snap the session with decent gains. There was some cautiousness with some final hours profit taking, as RBI Governor Raghuram Rajan, cautioning against expecting too much from central banks, said it is wrong on their part also to always claim a ‘bazooka’ left up their sleeves. Rajan further stated that the ability to get a coherent economic policy in this environment is much more limited that what we have been experiencing for so many years in the past. Traders were also keeping low on reports that Prime Minister Narendra Modi will reshuffle his council of ministers on Tuesday and induct nine new faces in what will be the first such major exercise since the government formation in May 2014. Back on street, most of the sectoral indices gained for the day, led by realty, metal and energy, while defencive FMCG continued its bearish trend and ended lower by over a percent. Power or energy stocks gained with a report that power generation growth has been 9.5 per cent this year so far, which is almost double of 5.65 per cent achieved between 2004 and 2014. The auto stocks too kept buzzing after announcing their monthly sales numbers, Hero MotoCorp's motorcycle sales rose 1.32% to 5.49 lakh units in June 2016. Tata Motors' total passenger and commercial vehicle sale (including exports) rose 8% to 44,276 in June 2016 over June 2015. TVS Motor Company's total sales rose 11% to 2.47 lakh units in June 2016 over June 2015.

The BSE Sensex finally ended at 27278.76, up by 133.85 points or 0.49% after trading in a range of 27251.06 and 27385.66. There were 18 stocks on gainers side against 12 stocks on decliners side on the index. (Provisional)

The broader indices outperformed the benchmarks; the BSE Mid cap index was up by 0.58%, while Small cap index surged by 1.01%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.20%, PSU up by 1.79%, Metal up by 1.67%, Oil & Gas up by 1.56%, Capital Goods up by 1.26%, while FMCG down by 1.32% was the lone losing index on the BSE. (Provisional)

The top gainers on the Sensex were Adani Ports & SEZ up by 4.33%, ICICI Bank up by 3.33%, ONGC up by 3.19%, Coal India up by 2.55% and Tata Motors up by 2.36%. On the flip side, ITC down by 2.52%, Dr. Reddys Lab down by 1.14%, Bajaj Auto down by 0.92%, Hindustan Unilever down by 0.74% and TCS down by 0.47% were the top losers. (Provisional)

Meanwhile, the government has decided to reduce the prices for key fertilizers, Union Minister for chemicals and fertilizers Ananth Kumar has said that fertilizers like Diammonium Phosphate (DAP), Muriate of Potash (MOP) and Nitrogen Phosphate and Potash composition (NPK) prices have never come down in last 15 years and it was increasing, therefore the government of India has decided to reduce the price of all these three fertilizers by about Rs 4,000 per tonne.

The minister said that there was a long standing demand to reduce the price of DAP, MOP and NPK fertilizers. DAP price will be reduced by a minimum of Rs 2,000 per tonne this means that prices will be reduced by Rs 100-150 per 50 kg bag as well as MOP and NPK prices will be reduced by Rs 4,000 per tonne.

Ananth Kumar further said that Modi government is working towards providing the best to farmers and cited examples of Pradhan Mantri Fasal Bima Yojana and Pradhan Mantri Krishi Sinchai Yojana, among others. He said that neem-coated urea has ensured there is no shortage of urea across the country

The CNX Nifty ended at 8370.70, up by 42.35 points or 0.51% after trading in a range of 8364.70 and 8398.45. There were 35 stocks in green against 16 stocks in red on the index. (Provisional)

The top gainers on Nifty were BHEL up by 4.54%, Adani Ports & SEZ up by 4.38%, Tata Motors - DVR up by 4.13%, ICICI Bank up by 3.25% and ONGC up by 3.13%. On the flip side, ITC down by 2.95%, Bosch down by 1.92%, Dr. Reddys Lab down by 1.41%, Indusind Bank down by 1.40% and Grasim Industries down by 1.36% were the top losers.(Provisional)

European markets after a green start slipped into red, Germany’s DAX was lower by 24.95 points or 0.26% to 9,751.17, France’s CAC declined by 17.26 points or 0.4% to 4,256.70 and UK’s FTSE 100 was down by 3.2 points or 0.05% to 6,574.63.

Asian markets closed higher on Monday, as speculation that global central banks will act to contain any Brexit effect on economic growth and fading expectations of a US rate increase this year underpinned a recovery in commodity prices. Chinese shares hit two-month high, with higher metal prices and hopes that Beijing will unleash more stimulus offering support. Japanese stocks gained, rising for a sixth day as global worries over Britain's vote to leave the European Union receded, but trading volume was extremely thin due to the Independence Day holiday in the US. Indonesian financial markets remained closed today for end-of-Ramadan celebrations.