Benchmarks snap dismal June series on a high note

The June series Futures and Options contract settlement turned out to be an encouraging event for the Indian equity markets as bulls showed strong buying interests in majority of the blue chip stocks. Boisterous benchmarks showcased an enthusiastic performance on Thursday by rallying over one and a half percentage points and breaking lot of psychological levels in their northbound journey. There appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength, as investors continued hunt of fundamentally strong but oversold stocks. Frontline indices managed to finish the session near their intraday highs to settle above 5,650 (Nifty) and 18,850 (Sensex) levels as investors took to hefty across the board buying.

Sentiments remained jubilant after the Reserve Bank of India (RBI) surprised markets by announcing the current account deficit a day in advance. India’s current account deficit (CAD) stood at $18.1 billion or 3.6 per cent of the GDP in the March quarter, sharply lower than the $21.7 billion deficit a year earlier. The current account gap for the full fiscal year ending in March 2013 was $87.8 billion, which was 4.8 per cent of GDP, compared with $78.2 billion a year earlier. Meanwhile, the balance of payments for the January-March quarter was $300 million surplus, compared with a $600 million deficit a year ago.

Supportive cues from US markets provided the much needed support to local markets initially. Afterwards, rally in other Asian markets, barring Shanghai Composite, too aided sentiments. KOSPI Composite surged by about three per cent after South Korean government revised up its growth forecast for the economy this year, as it expects the recent stimulus measures to boost economic activity further. Meanwhile, European markets too opened slightly in the positive.

Back home, recovery in Indian Rupee too aided the sentiments as it gained 50 paise against the US dollar, backing off from a record low hit in the previous session, as the country’s CAD narrowed in the January-March quarter, easing some concerns about the funding of the deficit. The rupee was up at 60.21 to the dollar at the time of equity markets closing, recovering from a record low of 60.76 hit on June 26. Up-move was also supported by buying in oil and gas counter with stocks like Oil and Natural Gas Corporation of India (ONGC), Reliance Industries, Oil India, Cairn India and Gail India edging higher ahead of Cabinet Committee on Economic Affairs (CCEA) meeting to decide on raising natural gas prices for the first time in three years. Additionally, traders continued to hunt software and technology stocks on the back of recent weakness in rupee against the dollar.

The NSE’s 50-share broadly followed index Nifty gained by over ninety points to end above its psychological 5,650 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex zoomed by over three hundred and twenty points to finish over its psychological 18,850 mark. Moreover, the broader markets too traded in fine fettle and ended the session in the green terrain.

The overall volumes stood at over 3.95 lakh crore, which remained on the higher side as compared to that on Wednesday. The market breadth remained in favor of advances as there were 1,210 shares on the gaining side against 1,112 shares on the losing side while 137 shares remain unchanged.

Finally, the BSE Sensex surged 323.83 points or 1.75% to settle at 18,875.95, while the CNX Nifty climbed by 93.65 points or 1.68% to end at 5,682.35.

The BSE Sensex touched a high and a low of 18,925.75 and 18,688.28, respectively. The BSE Mid cap index was up by 0.26% and Small cap index was up by 0.32%.

The top gainers on the Sensex were, ONGC up by 4.14%, TCS up 3.85%, HDFC Bank up 3.62%, Sun Pharma up 3.54% and Reliance up by 3.48%, while Maruti Suzuki down by 1.61%, Tata Motors down 1.35%, NTPC down 0.53%, Coal India down 0.49% and BHEL down by 0.37% were the top losers on the index. 

The top gainers on the BSE Sectoral space were, Oil & Gas up 3.22%, IT up 3.15%, TECk up 2.70%, Health Care up 2.49% and Realty up 1.80%, while Consumer Durables down 1.08% and Capital Goods down 0.04% were the top losers on the sectoral space.

Meanwhile, in a move to conduct the third round of spectrum auction soon, a high power ministerial panel has sought the Telecom Regulatory Authority of India’s (TRAI) opinion on the reserve price to be set for the forthcoming spectrum auction.

Telecom Minister Kapil Sibal said that the matter related to the reserve price should be referred to TRAI and it will be required to give its recommendations within 60 days because the government is very keen to move forward and sell the spectrum.  By adding further, Sibel said that after receiving the TRAI recommendations, the Empowered Group of Ministers (EGoM) will meet to fix the reserve price so that spectrum in all bands can be sold.

As per the Supreme Court order of February 15, 2013, the Department of Telecom (DoT) is required to conduct third round of auction in 20 out of 22 service areas. The DOT is planning to auction all the spectrum- 800 Mhz (CDMA), 900 Mhz (GSM) and 1800 Mhz (2G GSM), which were remained unsold in March auction.

The CNX Nifty touched a high and low of 5,699.35 and 5,630.95 respectively. 

The top gainers on the Nifty were Cairn up 5.76%, DLF up 5.19%, Ultra Tech Cement up 4.69%, ONGC up 4.23% and HCL Tech up by 3.51%.

On the flip side, the top losers of the index were, IDFC down 1.40%, Maruti down 1.39%, Grasim down 0.86%, PNB down 0.68% and NTPC down by 0.60%.

The European markets were trading mixed, France’s CAC 40 down by 0.07%, the United Kingdom’s FTSE 100 up by 0.19% and Germany’s DAX down by 0.06%.

Asian markets shut shop on a strong note as investors went for hectic buying expecting that the US Federal Reserve will not rush to end its stimulus programme soon and on further signs that stress in China's banking system are easing. Shanghai market recovered from early session’s lows as fears of a credit crunch retreated, boosting financials, but confidence remained fragile, and the index ended lower. Japan’s Nikkei went home on a firm note, as dollar's rise against the yen triggered some strong buying in several stocks across various sectors. Meanwhile, South Korean market closed higher, after official data showed that the seasonally adjusted current account surplus surged to a record high of $7.82 billion in May.