Post session - Quick review

The July series of Futures and Options contract settlement turned out to be encouraging event for the Indian frontline indices which showcased a phenomenal performance with key gauges surpassing their crucial 28,200 (Sensex) and 8,650 (Nifty) bastions. Markets after a positive start traded in very tight band for most part of the day’s trade, but buying activity which took place during last leg of trade mainly drove the markets higher. Extending their jubilation for second straight day, bulls tightened grip on Dalal Street after the Union Cabinet approved changes in the GST Constitutional Amendment Bill providing for full compensation to states for first five years of roll out of the new indirect tax regime, taking it a step closer to reality.

Sentiment remained buoyed after the US Federal Reserve has opted to keep interest rates at ultra-low level after the conclusion of a two-day monetary policy meeting. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets. Traders also got some support with global rating agency Crisil’s report that India’s GDP growth could rise to 7.9 per cent because of good monsoon so far, with agriculture expected to grow by 4 per cent and consumer price inflation likely to be restricted to 5 per cent in 2016-2017. NITI Aayog Vice Chairman Arvind Panagariya too has said that a good monsoon can help add ‘a percentage point’ to India's GDP growth in the current fiscal, from 7.6 percent in 2015-16.

On the global front, European counters have made a choppy start with all CAC, DAX and FTSE were trading slightly in red, as Royal Dutch Shell Plc and Dialog Semiconductor Plc fell after reporting results. Most of the regional peers ended in red, as investors remained cautious about a potential stimulus package from the country’s government, while in China, worries about a possible clampdown on wealth management products weighed on buying interest.

Back home, strengthening of rupee against the dollar and short-covering by participants with today being the last trading session of the July series of derivative contracts supported the uptrend. On the sectoral front, shares of companies in the logistics sector gathered momentum on hope that the government will be able to secure clearance for the goods and services tax (GST) bill that is likely to be tabled in the Rajya Sabha next week. Stocks related with defence space too edged higher, as the government has approved the abolition of existing guidelines for establishing Joint Venture Companies by Defence Public Sector Undertakings (DPSUs).

The NSE’s 50-share broadly followed index -- Nifty -- rose by over fifty points to end above the psychological 8,650 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- surged by over one hundred and eighty points to finish above the psychological 28,200 mark. Broader markets too traded with traction and ended the session with a gain of over half a percent.

The market breadth remained in the favour off advances, as there were 1,426 shares on the gaining side against 1,168 shares on the losing side while 212 shares remain unchanged. (Provisional)

The BSE Sensex ended at 28208.62, up by 184.29 points or 0.66% after trading in a range of 28064.90 and 28240.20. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.62%, while Small cap index up by 0.60%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.30%, FMCG up by 1.50%, Consumer Discretionary Goods & Services up by 1.49%, Realty up by 0.95% and Auto up by 0.81%, while Capital Goods down by 0.84%, Metal down by 0.74%, Industrials down by 0.44% and Oil & Gas down by 0.12% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Asian Paints up by 6.23%, Maruti Suzuki up by 4.38%, Power Grid up by 2.47%, ITC up by 2.46% and Sun Pharma up by 1.94%. On the flip side, Tata Steel down by 3.50%, Adani Ports &Special down by 1.47%, Larsen & Toubro down by 1.26%, Lupin down by 1.04% and Infosys down by 0.88% were the top losers. (Provisional)

Meanwhile, the government has raised the foreign shareholding limit in Indian stock exchanges from 5% to 15%, allowing overseas banks, insurers, stock and commodity exchanges and depositories to hold up to 15% stake in Indian stock exchanges. The move is aimed at attracting more foreign inflows in stock exchanges like BSE and the NSE; the higher foreign shareholding limit would also help BSE and NSE in their plans to list on exchanges. The decision is in line with an announcement made by finance minister Arun Jaitley in his budget speech of this year.

The decision was taken at a meeting of the cabinet, chaired by Prime Minister Narendra Modi, additionally the Cabinet also gave its nod for foreign portfolio investors to acquire shares through initial allotment, besides secondary market, in the stock exchanges. The move will help in enhancing global competitiveness of Indian stock exchanges by accelerating and facilitating the adoption of latest technology and global best practices, which will lead to overall growth and development of the domestic capital market.

The proposal of increasing foreign shareholding limit in domestic stock exchanges to 15 per cent from 5 per cent currently, was first made by capital market regulator Securities and Exchange Board of India (Sebi) in 2012, but was turned down by the Bimal Jalan committee set up to suggest amendments to Stock Exchange and Clearing Corporations (SECC) Regulations. In November last year, the finance ministry wrote to SEBI for its feedback on allowing an individual foreign shareholder to hold up to 15% in an exchange.

A number of foreign investors are already invested in the two leading Indian exchanges and the decision to hike the limit will help them enhance their exposure to the Indian markets. Singapore Exchange and Deutsche Boerse AG currently hold 4.9% each in BSE. While, in the NSE, the top foreign shareholders include Gagil FDI (Cyprus), GS Strategic Investments, SAIF II SE Investments Mauritius and Aranda Investments (Mauritius) Pte they hold 5% each.

The CNX Nifty ended at 8666.30, up by 50.50 points or 0.59% after trading in a range of 8625.25 and 8674.70. There were 23 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were Asian Paints up by 6.23%, Bharti Infratel up by 5.11%, Maruti Suzuki up by 4.51%, Eicher Motors up by 3.74% and ITC up by 2.79%. On the flip side, Tech Mahindra down by 3.71%, Tata Steel down by 3.64%, Aurobindo Pharma down by 1.93%, Larsen & Toubro down by 1.55% and Adani Ports &Special down by 1.51% were the top losers. (Provisional)

European markets were trading in red; UK’s FTSE 100 decreased 10.32 points or 0.15% to 6,740.11, Germany’s DAX slipped 6.5 points or 0.06% to 10,313.05 and France’s CAC was down by 2.47 points or 0.06% to 4,444.49.

Asian equity markets ended on a mixed note on Thursday as the yen strengthened and oil prices hovered near three-month lows on growing concerns regarding oversupply. While the Federal Reserve's latest policy statement came along expected lines with no clues on the timing and pace of interest rate hikes, the risk of policy disappointment from the Bank of Japan kept investors somewhat cautious. Japanese shares led the regional losses as the yen strengthened and investors adopted a cautious stance ahead of the latest policy decision from the Bank of Japan, due Friday. Meanwhile, Chinese shares closed marginally higher as rises in auto stocks and industrials offset declines in financials resulting from news of a pending crackdown on stock investments by China's massive wealth management industry.