Post Session: Quick Review

Wednesday turned out to be a fabulous day of trade for Indian equity benchmarks, where frontline gauges garnered gains of around half a percent on the back of robust progress in monsoon. After a positive opening, markets hold on to their gains and traded in narrow range throughout the session, with key gauges recapturing their crucial 27,900 (Sensex) and 8,550 (Nifty) bastions. Sentiments remained optimistic with Finance Minister Arun Jaitley urging the Rajya Sabha to pass the GST bill expeditiously, to enable states get a share of the Service Tax which is not shared under the provisions of 14th Finance Commission. Also, traders shrugged off the International Monetary Fund (IMF) lowering India’s economic growth projections by 0.1 percentage point to 7.4 per cent each for the current financial year and 2017-18, due to a slower investment revival than expected earlier.

Firm opening in European markets too aided sentiments. CAC and DAX were trading with a gain of around one and a half percent in early deals. However, Asian markets ended mostly in red after the International Monetary Fund trimmed its global economic growth outlook for this year and the next, warning that the surprise vote on Brexit has triggered a wave of uncertainty amid already-fragile business and consumer confidence.

Back home, buying in Pharmaceutical sector aided to the trading sentiment, led by rally in Aurobindo Pharma after the US health regulator gave approval for antihyperlipidemic drug Rosuvastatin calcium tablets. Stocks related to infra counter remained on buyers’ radar, as National Highways Authority of India - the highways regulator, is planning to bid out 30,000 km of projects over the next 2-3 years, including several green field projects. Shares of cement companies too traded higher on the bourses on expectation of healthy growth in earnings for the quarter ended June 30, 2016 (Q1FY17).

However, telecom stocks remained under pressure, with department of telecommunications (DoT) starting sending out notices to the country’s top six mobile operators, who have been charged by the Comptroller and Auditor General of under-reporting their adjusted gross revenue by Rs 46,045.75 crore for the period 2006-07 to 2009-10, due to which the government suffered a loss of Rs 12,488.93 crore by way of revenue share license fee and spectrum usage charge.

The NSE’s 50-share broadly followed index Nifty gained around forty points to end above the psychological 8,550 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by around one hundred and thirty points to finish above its psychological 27,900 mark. Broader markets outperformed benchmarks and traded jubilantly throughout the session and ended the trade with a gain of around a percent. The market breadth remained in the favour off advances, as there were 1,664 shares on the gaining side against 1,039 shares on the losing side while 171 shares remain unchanged. (Provisional)

The BSE Sensex ended at 27915.89, up by 128.27 points or 0.46% after trading in a range of 27759.71 and 27935.18. 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 0.90%, while Small cap index up by 0.99%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.41%, Healthcare up by 2.38%, Oil & Gas up by 1.55%, Power up by 1.50% and PSU up by 1.25%, while Consumer Durables down by 0.24% and Telecom was down by 0.19% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 3.15%, GAIL India up by 2.73%, Cipla up by 2.43%, Dr. Reddys Lab up by 2.21% and Lupin up by 2.02%. On the flip side, Wipro down by 1.74%, Axis Bank down by 1.21%, Tata Motors down by 0.93%, Tata Steel down by 0.50% and Maruti Suzuki down by 0.50% were the top losers. (Provisional)

Meanwhile, in a bid to boost the liquidity in the banking system, the government has allocated Rs 23,000 crore to recapitalize 13 public sector banks (PSBs), including the biggest lender State Bank of India. The sum which is 92% of the budgeted provision of Rs 25,000 crore, is aimed at supporting lending operations of these banks and helping them mop up money from markets. 

Out of the Rs 23,000 crore, the highest sum of Rs 7,575 crore will be released for SBI, followed by Rs 3,101 crore for Indian Overseas Bank and Rs 2,816 crore for Punjab National Bank. The yardstick for allocation was capital requirements of the banks based on compounded annual growth rate for the last five years, banks' own projections of credit growth and an objective assessment of the potential for growth of each PSU bank.

Following the above exercise, 75 per cent of Rs 23,000 crore, that is Rs 17,186.25 core, is being released now to provide liquidity support for lending operations and to enable banks to raise funds from the market. The remaining amount of Rs 5,728.75 crore to be released later is linked to performance, with particular reference to greater efficiency, growth of both credit and deposits and reduction in the cost of operations. The allocation of Rs 23,000 crore will be made against the shares issued by PSU banks to the government.

The CNX Nifty ended at 8565.85, up by 37.30 points or 0.44% after trading in a range of 8512.55 and 8569.90. There were 31 stocks advancing against 20 stocks declining on the index. (Provisional)

The top gainers on Nifty were Aurobindo Pharma up by 4.91%, Coal India up by 3.23%, BHEL up by 3.11%, Tata Power up by 2.77% and Dr. Reddys Lab up by 2.53%. On the flip side, Wipro down by 1.89%, Hindalco down by 1.52%, Axis Bank down by 1.27%, Tata Motors down by 1.07% and Idea Cellular down by 0.89% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 27.55 points or 0.41% to 6,724.92, France’s CAC surged 57.83 points or 1.34% to 4,387.96 and Germany’s DAX was up by 138.37 points or 1.39% to 10,119.61.

Asian equity markets ended mixed on Wednesday as another fall in oil prices overnight and the IMF's modest downgrade of its forecasts for global growth kept investors on edge. The IMF downgraded its forecasts for global growth this year and next by just 0.1 percentage point, but warned that more negative outcomes are a distinct possibility as the Brexit vote's impacts play out over time. Chinese shares drifted lower as investors pondered the possibility of further policy stimulus in light of mixed readings on the economic front. Japanese shares snapped a six-day winning streak as the yen fluctuated after touching a one-month low versus the dollar overnight. However, Hong Kong shares finished firmer on Wednesday, as investors were eyeing dovish signals from central banks in recent weeks continued to bid up stocks.