Boisterous benchmarks display spirited performance; Nifty ends above 8600 mark

Indian stock markets showcased the best performance not only among the Asian peers but also against the markets across the globe, as the frontline indices registered strong gains of over a percent on Monday.  Sentiments got a boost with the reports that Finance Minister Arun Jaitley will meet his counterparts in states to discuss proposed amendments to the GST Bill on Tuesday, with the likely listing of GST Bill in Rajya Sabha this week. Besides, a firming trend overseas as investors pinned their hopes on fresh Bank of Japan stimulus too accelerated buying activity in domestic equities.  Some support also came with the report that Crop planting jumped 23.8 per cent in the past one week helped by heavy rains during the period, with the current overall planting standing at 3.28 per cent higher than last year at 692.98 lakh hectare. The increase was largely seen in acreage of rice, pulses and coarse cereals. Further, Water levels in reservoirs have also risen significantly in the past month, providing more water for irrigation which is good news for farmers. Meanwhile, IT exporters like TCS and Infosys gained amid robust US economic data and a weaker rupee, while state-owned oil companies like Indian Oil Corporation and BPCL touched their fresh lifetime highs on renewed buying interest amid reports of Cabinet Secretariat’s proposal to merge 13 oil PSUs into one behemoth.

On the global front, most of the Asian markets ended the session on firm note on Monday, cheered by upbeat signs from Wall Street, a strengthening U.S. dollar and promises from the Group of 20 nations over the weekend to support global growth.  Investors are keeping close eye on two leading central banks (US Federal Reserve and Bank of Japan) this week, as each institution meets just a month after the UK voted to leave the European Union.  Chinese shares eked out modest gains in range-bound trade as investors awaited consumer inflation data on Wednesday for clues on interest rate policy from the People's Bank of China, while Japanese shares closed marginally lower as investors turned risk averse ahead of the Bank of Japan's two-day monetary policy meeting due to start on July 28. Meanwhile, European stocks rose in early trade, with low-cost airline Ryanair climbing after it issued a bullish outlook, while shares in William Hill surged on bid interest from its rivals.

Back home, the benchmark got off to a soft start as the indices showed signs of consolidation in early trade, with investors turning jittery after the International Monetary Fund (IMF) warned that headwinds from weaknesses in Indian corporate and bank balance sheets, slowing pace of reforms and sluggish exports may weigh on the country's economic growth. The reported listed as many as six core areas that need further reforms in India. These are product market, labour, infrastructure, banking, legal system and property rights, and fiscal structural reforms. But the frontline indices slowly but steadily started gathering steam and surged by over quarter percent by late morning trades. The bourses further capitalized on the momentum and spurted in afternoon trades on the back of broad based bottom fishing in undervalued stocks. Finally the NSE’s 50-share broadly followed index Nifty, got buttressed by over a percent to settle above the crucial 8,600 support level while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated around three hundred points and closed just below the psychological 28,100 mark. Moreover, the broader markets too participated in the rally and closed with gains of around a percent. On the BSE sectoral space, buying was evident across the board and investors piled up hefty positions in the PSU counter which rocketed by around two percent, while the Banking, Oil & Gas and Consumer Durables too gained from strength to strength and climbed by over a percent each.  The market breadth remained optimistic as there were 1724 shares on the gaining side against 990 shares on the losing side while 198 shares remained unchanged.

Finally, the BSE Sensex surged by 292.10 points or 1.05% to 28095.34, while the CNX Nifty rose by 94.45 points or 1.11% to 8,635.65.

The BSE Sensex touched a high and a low 28110.37 and 27736.51, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 1%, while Small cap index was up by 1.05%.

The top gaining sectoral indices on the BSE were PSU up by 1.92%, Bankex up by 1.65%, Oil & Gas up by 1.52%, Consumer Durables up by 1.38% and Realty up by 1.15%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were Maruti Suzuki up by 3.11%, SBI up by 2.86%, Asian Paints up by 2.25%, ICICI Bank up by 2.12% and ONGC up by 1.91%. On the flip side, Dr. Reddys Lab down by 3.62%, GAIL India down by 1.04%, Bajaj Auto down by 0.76% and Tata Steel down by 0.41% were the top losers.

Meanwhile, concerned over the rising inflation, the government has asked the states to remove all kinds of local taxes that are levied on essential food items like pulses and edible oils. The move is aimed at ensuring there is adequate availability of pulses, edible oils and other essential food items, and that they are priced reasonably.

Ministry of Consumer Affairs, Food and Public Distribution has written a letter to Chief Secretaries of the States and has asked to take up the market intervention on a real time basis and to review Agricultural Produce Market Committee (APMC) Acts on priority to delist pulses and other essential food items so that farmers can sell their produce at any place of their choice, minimising stages of supply chain from farm gate to ultimate consumers. This will provide reasonable prices for consumers and also fetch better prices for farmers.

Consumer Affairs Secretary Hem Pande has invited the attention of States towards the action plan adopted for this purpose in the States Food Ministers meeting held in May earlier this year and requested them to consider a pricing policy for pulses and such other essential food items under the Section 3(2) (c) of the Essential Commodities (EC) Act and to make it enforceable for all the stake holders to cap the prices of essential commodities.

Besides, in order to enhance availability and check prices of essential, the Secretary has also asked the states to implement the Price Stabilisation Fund Scheme for market intervention. For successful functioning of the scheme, adequate and timely lifting of pulses from buffer stock is a pre-requisite besides strengthening storage facilities for pulses, vegetables edible oils seeds, Onions.

The CNX Nifty traded in a range of 8,641.15 and 8,517.20. There were 42 stocks on gainers side against 9 decliners on the index.

The top gainers on Nifty were BHEL up by 4.90%, Bank of Baroda up by 3.55%, Maruti Suzuki up by 3.11%, SBI up by 2.73% and Asian Paints up by 2.38%. On the flip side, Dr. Reddys Lab down by 3.08%, Grasim Industries down by 0.97%, Bajaj Auto down by 0.87%, Tata Steel down by 0.74% and Hindalco down by 0.66% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 12.3 points or 0.18% to 6,742.78, France’s CAC gained 34.43 points or 0.79% to 4,415.53 and Germany’s DAX was up by 100.32 points or 0.99% to 10,247.78.

Asian equity markets ended mostly higher on Monday after G20 finance chiefs and central bankers pledged to use all policy tools to boost global economic growth, although lower commodity prices on a firmer dollar and caution ahead of two key central bank meetings this week served to limit the upside across the region. The Federal Reserve meets Tuesday and Wednesday, with no change expected to its benchmark interest rate and market participants will scrutinize the accompanying policy statement for fresh guidance on the pace of interest rate hikes over the next few months. Chinese shares eked out modest gains in range-bound trade as investors awaited consumer inflation data on Wednesday for clues on interest rate policy from the People's Bank of China. Japanese shares closed marginally lower as investors turned risk averse ahead of the Bank of Japan's two-day monetary policy meeting due to start on July 28.