Benchmarks extend euphoria for second straight day; Sensex ends shy of 19,500 mark

Benchmark equity indices, protracting previous session’s euphoria, went on gaining ground fervently, to conclude the trade with a gain of about half a percent. The frontline gauges gained for the fifth out of last seven trading sessions mainly buoyed by firm cues from other Asian markets. Domestic bourses jumped nearly two hundred and fifty points or over one and a half percent on the opening in line with firm trend in Asian region. Sentiments also remained up-beat as foreign institutional investors (FIIs) once again remained net buyers and bought shares worth Rs 164.56 crore on July 4, 2013. The frontline indices managed to hold on to the momentum for most part of the morning session but profit booking emerged at higher levels, bringing the indices off the day’s high. Depreciation in Indian rupee too weighed on investors’ sentiments.

Firm opening in Asian equity indices provided much needed support to domestic markets initially. Sentiments also remained upbeat following the European Central Bank and the Bank of England pledging to keep interest rates low for an extended period to support growth. But, weakness in European counters took their toll on domestic sentiments, dragging the Indian bourses below the psychological 5,870 (Nifty) and 19,500 (Sensex) levels, though, frontline gauges managed to end up with a gain of about half a percent.

Back home, rally in metal counter helped the up-move with stocks like, Jindal Steel, Sterlite Industries, Sesa Goa and NMDC edging higher amid expectations for easy monetary conditions at global central banks. Sentiments also remained up-beat as investors continued to pile-up positions in FMCG stocks. Dabur, Marico and GSK Consumer Healthcare edged higher on the back of early arrival and prospects of a good monsoon, which raised expectations of growth in uptake in rural areas that account for up to 50 per cent of their sales.

Buying was also visible in sugar sector, as stocks such as Bajaj Hindustan, Renuka Sugars surged on reports that the government has decided to raise the import duty on the sweetener to 15 per cent from 10 per cent currently. The move is aimed to discourage overseas buying amid a drop in local prices due to ample supplies. Meanwhile, Oil and Gas shares rebounded from their lows after witnessing profit taking in the last sessions.

The NSE’s 50-share broadly followed index Nifty gained over thirty points to end above its psychological 5,850 support level, while Bombay Stock Exchange’s sensitive Index - Sensex surged by over eighty points to finish over its psychological 19,500 mark. Moreover, the broader markets too ended slightly in the green.

The overall volumes stood at over Rs 1.36 lakh crore, which remained on the lower side as compared to that on Thursday. The market breadth was in favour of advances as there were 1,200 shares on the gaining side against 1,135 shares on the losing side while 138 shares remain unchanged.

Finally, the BSE Sensex gained 84.98 points or 0.44% to settle at 19,495.82, while the CNX Nifty rose by 30.95 points or 0.53% to end at 5,867.90.

The BSE Sensex touched a high and a low of 19,640.27 and 19,477.74, respectively. The BSE Mid cap index was up by 0.18% and Small cap index was up by 0.26%.

The top gainers on the Sensex were, Jindal Steel up by 3.51%, ONGC up 2.25%, Reliance up 2.15%, BHEL up 1.83% and HDFC Bank up by 1.53%, while Gail India down by 2.05%, Bharti Airtel down 1.89%, Mahindra & Mahindra down 1.40%, ICICI Bank down 1.21% and Coal India down by 0.67% were the top losers on the index. 

The top gainers on the BSE Sectoral space were, Oil & Gas up 1.49%, FMCG up 0.89%, Metal up 0.62%, Capital Goods up 0.49% and PSU up 0.47%, while TECk down 0.54% and IT down 0.29% were the top losers on the sectoral space.

Meanwhile, Indian business climate improved in June on the back of rising output of intermediate goods and cooling commodity prices globally. The 'BluFin Business Cycle Indicator (BCI)', which reflects various macroeconomic trends on a monthly basis, stood at 167.1 points in June, 5.6 percent higher compared to the same month of previous year, suggesting that Indian economy is growing at a faster rate than the previous year. The BCI index is based on components in four broad categories including foreign trade, capital market, policy and the real economy. 

As per the financial services provider BluFin’s report the intermediate sector continues to be a major contributor to BCI growth. It said that high production of aluminium, pig iron and copper and data on consumer demand indicate an economic expansion. Further, declining international commodity prices like copper, aluminium and gold have boosted the economy's growth, despite the major fall in rupee value, which has eroded a large part of the benefit.

Indicating a reversal in the economic slowdown since July 2012, BluFin expects that Indian economy would grow at 5.3% in the first quarter of financial year 2013-14.However, in past, the BCI has grown by an average of 7 percent year-on-year.

Earlier, the BluFin has reported that Indian consumers' confidence level rose in June on the back of easing inflation but concerns remained over job security. BluFin's Consumer Confidence Index (CCI) rose to 41.9 points in June, an uptick of 0.5 points over the previous month.

The CNX Nifty touched a high and low of 5,900.45 and 5,858.45 respectively. 

The top gainers on the Nifty were IDFC up 4.35%, JP Associates up 4.10%, Jindal Steel up 2.77%, NMDC up 2.72% and Asian Paints up by 2.60%.

On the flip side, the top losers of the index were, GAIL down 2.32%, Bharti Airtel down 2.04%, Lupin down 1.71%, ICICI Bank down 1.18% and M&M down by 1.02%.

The European markets were trading mixed, France’s CAC 40 down by 0.21%, the United Kingdom’s FTSE 100 up by 0.41% and Germany’s DAX down by 0.24%.

Prolonging the previous session’s rally, all the Asian equity indices barring Kospi Composite, ended in the green on last trading day of the week, as investors piled-up positions in risky assets ahead of US monthly jobs data, which is expected to show modest improvement in US hiring. Sentiments also remained upbeat following the European Central Bank and the Bank of England overnight pledging to keep interest rates low for an extended period to support growth. Chinese benchmark edged little higher to hit highest close in two weeks on Friday, as strength in the property sector helped indexes to their first weekly gain in five ahead of a slew of June economic data next week.