Post Session: Quick Review

Giving thumbs up to Iran’s historic nuclear deal that sent global crude oil prices falling, Indian equity markets rallied close to two percent, on growing hopes of narrower Current Account Deficit (CAD) given the country imports crude for most of its needs. In the first trading session of F&O expiry week, there appeared not even iota of profit-booking and benchmark equity indices traded from strength to strength, witnessing sudden spurt in the last hour of trade to conclude near day’s highest point, above the crucial 20,600 (Sensex) and 6,100 (Nifty) respectively. Besides, Iran’s nuclear deal, Rupee’s appreciation also worked in the favour of Dalal Street. Meanwhile, Reserve Bank of India’s conditional extension of deadline for bank’s special forex window till December 31, bolstered sentiment not only for the currency, but also banking stocks. Providing some breathing space to the banks that are currently negotiating with global lenders for overseas loans, RBI allowed banks to utilize the special window till December 31, provided if they have a firm commitment from international lenders before November 30.

On the global front, Asian and European shares were upbeat after a historic deal over Iran's nuclear program bolstered risk appetite. Iran agreed to curb its nuclear programme for the next six months in exchange for limited sanctions relief, in a preliminary accord with world powers meant to lay the foundations for a comprehensive agreement later this year. The deal was reached in marathon talks in Geneva that ended on Sunday after protracted negotiations between Iran and the so-called P5+1 nations comprising the United States, China, France, Britain, Russia and Germany.

Closer home, while, Rupee’s appreciation worked well for Dalal Street, it spelled doom for Information Technology shares which derive lion share of their revenue from exports. Barring that, all the sectoral indices on BSE ended in green, with top gainers being Capital Goods, Banking and Realty pivotal. Meanwhile, in other sector specific activities, PSU OMC’s stocks, BPCL, HPCL and IOC rallied after crude headed for their biggest fall in three weeks.  Additionally, sugar stocks too sprang up amidst hopes of a breakthrough with the UP government in a meeting on Tuesday. As per reports, mill owners hope to get the government to commit on a direct subsidy payment to farmers and adoption of the Rangarajan committee recommendations. However, telecom stocks, viz, Bharti Airtel and Idea Cellular, rang-off after high-power ministerial panel approved higher reserve or base price for the auction of spectrum in the 1800 MHz and 900 MHz bands, as recommended by Telecom Commission.  The overall market breadth on BSE ended in the favour of advances which thumped declines in the ratio of 1431: 1022; while 163 shares ended unchanged. (Provisional)

The BSE Sensex gained 387.69 points or 1.92% to settle at 20605.08.The index touched a high and a low of 20626.15 and 20326.66 respectively.  Among the 30-share Sensex, 27 stocks gained, while 3 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 1.15% and 1.01% respectively. (Provisional)

On the BSE Sectoral front, Capital Goods up by 1.57%, Bankex up by 1.32%, Realty up by 0.78%, PSU up by 0.76% and Auto up by 0.67% were the top gainers, while IT down by 0.80%, was the only losers in the space. (Provisional)

The top gainers on the Sensex were BHEL up by 5.66%, ICICI Bank up by 5.28%, L&T up by 4.06%, SBI up by 3.67% and ONGC up by 3.54%, while, Infosys down by 0.64%, NTPC down by 0.56% and Dr Reddys Lab down by 0.07% were the top losers in the index. (Provisional)

Meanwhile, putting all the speculations to rest, India’s Apex bank clarified that concessional swap facility will not be extended beyond November 30, however providing some breathing space to the banks that are currently negotiating with global lenders for overseas loans, it allowed banks to utilize the special window till December 31, provided if they have a firm commitment from international lenders before November 30.

It said that only banks which manage to secure loans from any international/multilateral financial institutions or for that matter receive a firm commitment in this regard on or before November 30, will be allowed to enter into a forward-forward swap under the first leg of which the bank will sell forward the contracted amount of forex corresponding to the loan amount for delivery up to December 31.

Under the swap facility, banks were permitted to borrow from international banks/multilateral agencies up to 100% of their core capital and swap the amount with RBI at a concessional rate of 3.5%.

RBI also allowed the extension as it feels that some of banks may not be in a position to draw the loan and deliver the same to RBI as part of the concessional swap within mandated ‘November 30’.

However, the central bank also clarified that if a bank is not in a position to deliver the contracted amount of foreign currency on the contracted date, it would have to pay the difference between concessional swap rate contracted and the market swap rate plus 1%.

India VIX, a gauge for markets short term expectation of volatility gained 5.03% at 21.05 from its previous close of 20.04 on Friday. (Provisional)

The CNX Nifty gained 119.90 points or 2.00% to settle at 6115.35. The index touched high and low of 6,123.50 and 6,035.95 respectively. Out of the 50 stocks on the Nifty, 46 ended in the green, while 4 ended in the red.

The major gainers of the Nifty were BHEL up by 5.61%, ICICI Bank up by 5.12%, UltraTech Cement up by 4.29%, BPCL up by 4.28% and L&T up by 4.11%. The key losers were NTPC down by 0.70%, Infosys down by 0.59%, Hindalco Industries down by 0.13% and Lupin down by 0.10% (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.41%, the United Kingdom’s FTSE 100 up by 0.32% and Germany’s DAX up by 0.84%.

The Asian markets barring Shanghai Composite and Hang Seng concluded Monday’s trade in green with Japanese stocks ended within a whisker of a fresh 2013 high, as a deal with Iran pushed the yen to its lowest level against the dollar in six months. Hong Kong businesses are expecting annual economic growth of between 2 and 4 percent in the next two years. The Business Prospects Survey conducted by the General Chamber of Commerce is more pessimistic than the chamber’s own forecast of four to five percent growth. Industrial production in Taiwan fell unexpectedly last month. The Ministry of Economic Affairs Taiwan stated that Taiwanese Industrial Production fell to a seasonally adjusted annual rate of 0.78%, from 1.06% in the preceding month.