Benchmarks extend winning streak for the sixth straight session

Indian equity indices showcased yet another euphoric performance on Monday, as investors mounted more bullish bets amid good progress in monsoon rains and firming Asian cues. Heavy showers during the weekend have lifted monsoon out of the 'deficient' zone, the first real signal of a good kharif harvest that should lower food inflation and pave the way for a cut in interest rates.  The season's rainfall deficit has contracted to only 6% from a worrying 25% two week ago. Besides, appreciation in Indian rupee against the dollar too aided sentiments. Indian rupee firmed up by 7 paise to 67.25 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. Some support also came with the report that foreign investors brought in over Rs 3,700 crore into Indian stock markets in June, taking the total to more than Rs 20,600 crore so far this year. However, investors remained cautious with RBI Governor Raghuram Rajan who warning against expecting too much from central banks, stated that 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.

On the global front, Asian markets ended in green on Monday as commodity producers rallied and speculation grew that central banks will take steps to ease the economic fallout from the shock UK decision to leave the European Union.  Japanese stocks rose, led by telecommunications and food companies, as the yen weakened, while Chinese shares hit two-month high, with higher metal prices and hopes that Beijing will unleash more stimulus offering support. However, Stocks in Europe slipped in early trade, with losses among Italian banks putting the pan-European markets on track for its first loss in four sessions.

Back home, the local benchmarks got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. Thereafter, the key indices capitalized on the momentum and touched intraday highs in early noon session as participants indulged in broad based buying. But the optimism soon started showing signs of easing in late hours of trade and profit booking in few sectors appeared after European markets drifted lower, weighing down the local bourses by the end of session. Finally the NSE’s broadly followed index Nifty, got buttressed by close to half a percent to settle above the crucial 8,350 support level, while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated over one hundred and thirty points and closed above the psychological 27,200 mark. Meanwhile, broader markets managed to outperform the larger peers in today’s session as the BSE’s midcap and smallcap indices settled with gains of over half a percent. On the BSE sectoral space, buying was evident across the board and investors piled up hefty positions in the high beta Realty counter which rocketed by over two percent, while the PSU, Metal and Oil & Gas pockets too gained by over a percent each. However, only chink in the armor was the defensive - FMCG index which closed in negative territory, as good amount of selling was witnessed by heavyweight like ITC, Dabur India and Emami. The market breadth remained optimistic as there were 1724 shares on the gaining side against 1016 shares on the losing side, while 145 shares remained unchanged.

Finally, the BSE Sensex surged by 133.85 points or 0.49% to 27278.76, while the CNX Nifty rose 42.35 points or 0.51% to 8,370.70.

The BSE Sensex touched a high and a low 27385.66 and 27251.06, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 0.58%, while Small cap index was up by 1.01%.

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% and Capital Goods up by 1.26%, while FMCG down by 1.32% was the only losing index on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 4.23%, ONGC up by 3.43%, ICICI Bank up by 2.97%, Tata Motors up by 2.40% and Coal India up by 2.37%. On the flip side, ITC down by 2.97%, Dr. Reddys Lab down by 1.21%, Hindustan Unilever down by 0.71%, Bajaj Auto down by 0.68% and NTPC down by 0.45% were the top losers.

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 traded in a range of 8,398.45 and 8,364.70. There were 32 stocks advancing against 20 decliners on the index.

The top gainers on Nifty were BHEL up by 4.51%, Adani Ports & SEZ up by 4.50%, Tata Motors - DVR up by 4.25%, ICICI Bank up by 3.52% and ONGC up by 3.02%. On the flip side, ITC down by 2.67%, Bosch down by 1.98%, Kotak Mahindra Bank down by 1.39%, Indusind Bank down by 1.37% and Grasim Industries down by 1.36% were the top losers.

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.