Benchmarks extends winning streak to third straight day; Sensex crosses 20,000 level

Indian equity indices extended their winning streak to third day in a row with frontline gauges crossing past their crucial 20,000 (Sensex) and 6,000 (Nifty) bastions, buoyed by lower than expected June Inflation data and positive global set-up. Markets started in the red on disappointing IIP and CPI data that was released after the market hours on Friday. Index of industrial production (IIP) for May fell 1.6 per cent, versus a growth of 2.3 per cent in April, while  consumer price index (CPI) inched up to 9.87 per cent in June, against 9.31 per cent in May. But, the indices turned into the green in noon deals after country’s headline inflation eased for the month of June and remained within the Reserve Bank of India’s comfort zone of sub-5 per cent. The Wholesale Price Index-based inflation rose to 4.86% (Provisional) in June, compared to 4.7% (Provisional) during the previous month.

Sentiments also remained up-beat on report that foreign direct investment (FDI) into India increased 25 percent year-on-year to $ 2.32 billion in April, the highest level in the past six months, while a survey by industry body CII said that economic growth in the country may rebound from the next fiscal if government expedites its reform process. Meanwhile, buying in PSU oil marketing companies too supported the sentiments with HPCL and IOC edging higher after hiking the price of petrol by a steep Rs 1.55 a litre, without taxes.

Global cues too remained supportive, as European counterparts made a positive opening after political parties in Portugal decided on a deadline for bailout reforms. Asian markets too rallied after the China’s second-quarter growth data met street expectations. The world’s second-largest economy expanded 7.5 per cent in the second quarter. Moreover, the US markets remained in positive terrain on Friday taking cues from some better than expected earnings, though the gains were modest as the economic reports were not that encouraging.

Back home, buying in fast-moving consumer goods counter too aided the sentiments as the spurt in rains across central and western India is expected to continue in the second half of July, with the weather office forecasting rainfall to be better this month. Metal and mining stocks like, Sterlite Industries, Sesa Goa, SAIL, NALCO and Hindalco Industries too remained on the buyers’ radar after data showed China’s economy grew in line with expectations in the second quarter, belying some fears of a sharper slowdown. Additionally, banking stocks gained despite RBI imposing fines totaling Rs 49.5 crore on 22 private and public sector banks including SBI, PNB and Yes Bank for violating know your customer/anti-money laundering norms.

The NSE’s 50-share broadly followed index Nifty jumped by over twenty points to end comfortably above the psychological 6,000 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex-- increased by over seventy points to finish above the psychological 20,000 mark.

Moreover, broader markets traded with traction throughout the session and ended with a gain of about as percent. The market breadth remained in favour of declines as there were 1346 shares on the gaining side against 966 shares on the losing side while 133 shares remain unchanged.

Finally, the BSE Sensex gained 76.01 points or 0.38% to settle at 20,034.48, while the CNX Nifty rose by 21.80 points or 0.36% to end at 6,030.80.

The BSE Sensex touched a high and a low of 20,072.44 and 19,883.19, respectively. The BSE Mid cap index was up by 0.90 points and Small cap index was up by 0.80%.

The top gainers on the Sensex were, Hindalco Industries up by 3.69%, Sterlite Industries up 3.28%, Bharti Airtel up 3.20%, M&M up 2.46% and TCS up by 2.20%, while Coal India down by 2.50%, Infosys down 2.17%, NTPC down 2.16%, Tata Steel down 2.07% and Tata Power down by 1.17% were the top losers on the index. 

The top gainers on the BSE sectoral space were, Realty up 1.94%, FMCG up 1.19%, Capital Goods up 0.89%, Bankex up 0.72% and Oil & Gas up 0.72%, while Power down 0.78% and IT down 0.03% were the top losers on the sectoral space.

Meanwhile, a survey conducted by industry body Confederation of Indian Industry (CII) has said that the acceleration of the economic reform process by the government will result in the economic growth of the country from the next fiscal. The survey further stated that the GDP growth for the current fiscal may cross 5.5% in the prevailing circumstances. The growth rate of the country slowed to 4.8% in the January-March quarter and fell to a decade low of 5% for the entire 2012-13 fiscal because of the poor performance of the sectors like farm, manufacturing and mining.

The CEOs' survey which was carried out amongst 75 national council members of the CII had majority of the respondents saying that a significant proportion of businesses are looking at capacity expansion in the current year. 44 percent of respondents have plans to increase their domestic investment in the current financial year, while 37 percent saw it increasing during the fiscal.

On measures required to revive growth, 52 percent of the respondents accorded their first priority to clearing 50 large projects worth more than Rs.1,000 crore and 200 large projects worth between Rs 250 and Rs1,000 crore within the next six months.

Around 24 percent of respondents favoured the Reserve Bank of India (RBI) intervention by way of cut in repo and CRR rates, while 17 percent of respondents called adherence to fiscal deficit target as their top policy priority.

The CNX Nifty touched a high and low of 6,038.20 and 5,980.95 respectively. 

The top gainers on the Nifty were PNB up 5.30%, Bank of Baroda up 4.31%, Cairn up 3.96%, JP Associates up 3.91% and Hindalco up by 3.34%.

On the flip side, the top losers of the index were, Coal India down 2.57%, NTPC down 2.22%, Tata Steel down 2.13%, Infosys down 2.08% and BHEL down by 1.35%.

The European markets were trading in green, France’s CAC 40 up by 0.49%, the United Kingdom’s FTSE 100 up by 0.39% and Germany’s DAX up by 0.18%.

Asian markets concluded the Monday’s trade on firm note despite the data showed that China’s economic expansion slowed in the second quarter, though it was in line with market estimates. The country’s GDP eased further to 7.5% in the second quarter from 7.7% in the first three months, reflecting a weakening recovery in the world’s second-largest economy. The country’s gross domestic product expanded to 24.8 trillion yuan ($4 trillion) in the first half, up 7.6% from a year earlier. The country’s industrial production expanded 9.3% year on year during the January-June period, down 0.2% points from that in the first three months. Besides, China’s nominal retail sales grew 12.7% year on year to 11.08 trillion yuan ($1.8 trillion) in the first half of 2013. The growth rate picked up by 0.3% point from the first quarter.

Jakarta Composite too concluded the trade in green. A survey from the central bank showed Indonesian consumers were more confident over the current economic conditions thanks to optimism over job availability in the country. The central bank’s survey, which was based on sampling from around 4,600 households in 18 of the nation’s largest cities, showed the Consumer Confidence Index rose by 5.4 points to 117.1 points in June. A level of more than 100 points indicates that consumers are generally optimistic about the economy.

South Korean shares and the Philippine stock too ended the trade in green and investors heaved a sigh of relief as China’s gross domestic product growth was higher than market consensus. Japanese Nikkei remained shut for the trade today on account of ‘Marine Day’ public holiday.