Post Session: Quick Review

Drawing support from rupee recovery in early deals and positive global set-up, Indian equity markets bounced back on Tuesday. Hefty buying activity by the bargain-hunters, following measures taken by the regulators and policy makers to arrest Indian currency’s freefall, led the gain in the markets.

The session turned splendid as market-participants showed resilience in the face of Rupee’s depreciation past 60/$ despite various measures of RBI by the close of trade. Benchmark indexes, Sensex and Nifty, clinching smart gains of close to half a percent, concluded the session above the crucial 19,400 and 5850 bastions respectively. Meanwhile, broader indices showing degree of outperformance went home with gains of close to three-fourth of a percent.

In order to rescue rupee, RBI has banned banks from proprietary trading in domestic currency futures and the exchange-traded options market, while Securities and Exchange Board of India increased the margin requirement on the domestic dollar-rupee forward trade to 100% of the traded amount, which would mean that investors will have to shore up the full amount of the transaction at the time of the trade itself and not during settlement.

However, positive global-developments also got the bulls blazing at D-Street. While, Asian pacific shares gained amidst worries about China's slowdown and caution ahead of the minutes of the Federal Open Market Committee's June meeting, European shares rose on Tuesday in a broad-based rally, on optimism about the health of the US economy that was underpinned by a solid start to the earnings season there.

Closer home, amidst across the board buying, stocks from Consumer Durables, Power and Realty counters hogged the limelight. Non sectoral gauge sugar also rallied after Government issued a notification to implement a hike in import duty on sugar to 15 per cent from 10 per cent as the world's top sugar consumer tries to prop up local prices which are falling due to ample and cheap global supplies.

Further, Education sector stocks too rallied. Everonn Education, MT Educare, Aptech, NIIT, and Edserv Softsystems gained in the range of 6-15%. Educomp Solutions was locked at 10% upper circuit on approaching corporate debt restructuring forum to restructure its rupee debt. Besides, gains of JSW Energy, power Grid Corporation spilled optimism in the entire pivotal. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1308: 1005, while 137 scrips remained unchanged. (Provisional)

The BSE Sensex gained 109.10 points or 0.56% to settle at 19433.87.The index touched a high and a low of 19486.00 and 19380.25 respectively.  The BSE Mid cap and Small cap indices ended higher by 0.80% and 0.79% respectively. (Provisional) 

On the BSE Sectoral front, Consumer Durables up by 1.89%, Realty up by 1.78%, Power up by 1.68%, Capital Goods up by 1.40% and Health Care up by 1.39% were the top gainers, while FMCG down by 0.05% was the only losers in the space. (Provisional)

Out of the 30 stocks on the Sensex, 22 settled higher, while 8 stocks settled lower. The top gainers on the Sensex were Sun Pharma up by 3.28%, Sterlite Industries up by 2.48%, Bajaj Auto up by 1.98%, Dr Reddys Lab up by 1.82% and L&T up by 1.65%. On the flip side,  Jindal Steel down by 1.94%, Mahindra & Mahindra down by 1.13%, Bharti Airtel was down by 0.83%, ONGC was down by 0.74% and Hindustan Unilever was down by 0.63% were the top losers on the Sensex. (Provisional)

Meanwhile, in a step aimed at improving dollar inflows amidst deprecating Rupee, the Reserve Bank of India (RBI) has relaxed rules for non-banking finance company-asset finance companies (NBFC-AFCs) to raise external commercial borrowings (ECBs) by allowing the lenders to raise such funds through the automatic route as against the approval route earlier.

However, ECBs (including outstanding external debt) under the automatic route can be availed up to 75% of the AFC's owned funds subject to a maximum of $ 200 million or its equivalent per financial year and currency risk of such ECBs is also required to be fully hedged.

With the new directives NBFC-AFCs can avail ECBs up to $200 million in a financial year to finance import of infrastructure equipment. This ECB can be availed from all recognized lenders with a minimum average maturity of five years.

However, in a rider RBI has said that NBFC-AFCs can avail of ECB in the form of Foreign Currency Bonds, only from those international capital markets that are subject to regulations prescribed by the host country regulator in a Financial Action Task Force (FATF) member country compliant with FATF guidelines and the currency risk of ECBs above 75 per cent of their owned funds is required to be hedged in full.

India VIX, a gauge for markets short term expectation of marginally lost 0.10% at 19.32 from its previous close of 19.34 on Monday. (Provisional)

The CNX Nifty gained 47.15 points or 0.81 % to settle at 5,858.70. The index touched high and low of 5,864.95 and 5,834.60 respectively. Out of the 50 stocks on the Nifty, 39 ended in the green, while 11 ended in the red.

The major gainers were Power Grid up 4.37%, Kotak Bank up by 3.86%, Sun Pharmaceuticals up by 3.30%, Reliance Infrastructure up by 2.92% and IndusInd Bank up by 2.40%. The key losers were Jindal Steel down by 2.37%, Bharti Airtel down by 0.85%, Hindustan Unilever down by 0.83%, M&M down by 0.81% and ONGC down by 0.61%.(Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.56%, Germany’s DAX up by 1.10% and the United Kingdom’s FTSE 100 up by 1.01%.

Resuming their northward journey after a day of break, all the Asian equity indices, barring Jakarta Composite, ended the session in the green terrain on Tuesday, tracking a higher finish on Wall Street overnight and better-than-expected results from Alcoa Inc. Back on regional turf, Chinese Shanghai Composite rose after a choppy session as investors digested data showing an increase in consumer prices. The nation’s June consumer prices in China rose 2.7 per cent from the year-earlier month, while producer prices continued to deflate for the 16th straight month, dropping 2.7 per cent. Moreover, Seoul shares ended with a decent gain of 0.75 percent as market heavyweight Samsung Electronics Co bounced from a 10-month closing low in the previous session, and shares in Asiana Airlines Inc recovered some ground following its aircraft's crash-landing in San Francisco.