Post Session: Quick Review

Extending last weeks’ jubilation, Indian equity markets once again showed an enthralling performance, whereby benchmarks rallying close to a percent, ended past the psychological 19550 (Sensex)and 5850 (Nifty) levels respectively. Bulls exhibited confidence right from the start of the trade and nothing came in way of the euphoric mood of bourses, including the weak June factory output data and mixed global cues and the benchmarks halted near day’s highest point. However, stiff resistance was faced near 19,600 mark (Sensex) and 5,900 (Nifty) respectively. Although, 50 share index, Nifty did hit the crucial 5900 mark, but bout of profit-booking pulled the benchmark from that level. On the macro-front, Indian factory activities remained weak in June as output contracted for the second consecutive month and order books contracted for the first time in over four years, which led HSBC Purchasing Managers’ Index (PM) coming at 50.3, slightly higher from 50.1 in May.

On the global front, European shares which got to a positive start, were trading mixed after the release of manufacturing, inflation and employment data for the euro zone.  Asian pacific shares too ended mixed on Monday as another set of weak manufacturing data out of China offset a positive Japanese business confidence survey. Meanwhile, comments made by Fed officials on Friday also dampened sentiment in Asia. Federal Reserve Governor Jeremy Stein on Friday suggested the US central bank's upcoming September policy meeting could mark the beginning of the Fed's stimulus withdrawal. Richmond Fed President Jeffrey Lacker said markets should brace for more volatility.

Closer home, sharp recovery of Indian currency from the crucial 59/$ mark in the intra-day trade also got the bulls berserk on the bourses, nevertheless, its depreciation later in the session was largely ignored by the market-participants which continued to bet into risky equities, drawing comfort from the fact that foreign investors, ending a 13-day selling streak, turned net buyers last session. Much of the buying was witnessed among stocks from Realty, Power and Capital Goods counters, while those from Information Technology and Technology counters played spoil-sports. Construction shares were in demand on renewed buying. Larsen and Toubro (L&T) gained after the company bagged new orders worth of Rs 3057 crore across various business segments in June 2013. Additionally, Telecom stocks too gained traction led by the gains of Reliance Communication. The stocks spurted more than 12 percent to their highest level in 2-1/2 years after the mobile carrier said it had repaid foreign currency loans worth a total $1.2 billion. Market gains were also helped with Reliance Industries, which rose over 2% after the government approved a hike in gas prices. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1606: 773, while 127scrips remained unchanged. (Provisional)

The BSE Sensex gained 197.14 points or 1.02% to settle at 19592.95.The index touched a high and a low of 19598.43 and 19347.57 respectively. Among the 30-share Sensex pack, 25 stocks gained, while rest 5 declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 1.88% and 2.00% respectively. (Provisional)  On the BSE Sectoral front, Realty up by 5.24%, Capital Goods up by 2.89%, Power up by 2.89%, FMCG up by 2.23% and Auto up by 1.80% were the top gainers, while IT down by 1.54% and Teck down by 0.42% were the only losers in the space. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 4.10%, Gail India up by 3.74%, Sterlite Industries up by 3.59%, SBI up by 3.49% and BHEL up by 3.27%, while, Infosys down by 1.90%, TCS down by 1.67%, ONGC down by 0.62%, Sun Pharma down by 0.50% and Coal India down by 0.25% were the top losers in the index. (Provisional)

Meanwhile, Indian factory activities remained weak in June as output contracted for the second consecutive month and order books contracted for the first time in over four years. However, consistent with a marginal expansion of the country’s manufacturing sector, the HSBC Purchasing Managers’ Index (PM) recorded above the no-change threshold for the fifty-first consecutive month in June, by coming at 50.3, slightly higher from 50.1 in May.

Although marginally, total new orders during June, fell for the first time since March 2009. A sub-index measuring overall new orders fell to 49.7, from 50.5 in May, below the watershed level for the first time since March 2009. However, the little expansion was witnessed on account of increased export order. In fact, export business rose at the sharpest rate since January as demand from key foreign clients strengthened.

Meanwhile,reduced output levels were recorded for the second month running in June, amid evidence of tougher economic conditions and persistent power cuts. The economy grew at its slowest pace in a decade in the fiscal year that ended in March and economic data since then has underwhelmed suggesting no relief from the current slowdown.

On the price front, despite the moderate pace of growth, output prices picked up slightly and input prices rose more notably, partly in response to the depreciation of Rupee. Input cost inflation accelerated to the sharpest since February. The rate of charge inflation was, however, modest as competition for new work persisted and weighed on pricing power.

The only bright spot remained the fastest rate of employment since March. Amid reports of power, raw material and water shortages, backlogs of work were accumulated again in June, which subsequently led to manufacturers adding to their workforce numbers in June.

India VIX, a gauge for markets short term expectation of marginally gained 0.77% at 18.09 from its previous close of 17.95 on Friday. (Provisional)

The CNX Nifty gained 56.65 points or 0.97% to settle at 5,898.85. The index touched high and low of 5,904.35 and 5,822.20 respectively. 40 stocks advanced against 10 declining on the index. (Provisional)

The top gainers on the Nifty were Ranbaxy up by 5.34%, Reliance Infrastructure up by 4.93%, Sesa Goa up by 4.31%, DLF up by 4.06% and Maruti Suzuki was up by 4.05%. On the other hand, Infosys down by 2.02%, HCL Tech down by 1.93%, TCS down by 1.67%, ONGC down by 0.85% and Sun Pharmaceuticals down by 0.68% were the top losers. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.83%, Germany’s DAX up by 0.41% and the United Kingdom’s FTSE 100 up by 0.28%.

Asian Markets shut the shop on mixed note, as Chinese manufacturing data weighed on the market sentiments. Japan’s Nikkei went home with strong gains as the yen weakened against the dollar.  Chinese market too closed marginally higher after China's manufacturing sector showed fresh signs of weakness in June, against a background of strains in the country's financial markets and an effort to rebalance the economy. Korean markets’ ended lower as HSBC data released for the day showed that the country's manufacturing activity contracted for the first time in five months in June.

Hong Kong's markets were closed for the Hong Kong Special Administrative Region Establishment Day holiday.