BSE Sensex and NSE Nifty headed towards their highest close in three months, led by gains in financial and energy stocks on hopes that a fall in oil prices due to the Iran nuclear deal will lower import costs and interest rates.
BSE Sensex gained 247.83 points to close at 28,446.12; Nifty gained 84.25 points to close at 8,608.05
Easing of foreign direct investment, positive global cues coupled with good foreign fund inflows also pushed up Nifty to its three-month closing high at 8,608.05.
“Markets continue their northward journey. Government’s approval on composite FDI cap resulting in more capital flowing into the system lifted the sentiment,” said Gaurav Jain, Director at Hem Securities.
Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
Continued improvement in FII inflows post the reduction in global risk is intensifying India’s outperformance. The healthy interest of FIIs tells us that India is in a healthy spot. Positively cabinet approval for composite cap for foreign investments in a company, will remove the distinction between FPI, FDI and NRI investments. This can benefit companies, especially private banks which have separate caps for FII within the total foreign investment limit.
In a bid to streamline the foreign direct investment (FDI) structure, the government today introduced a composite foreign investment cap by clubbing all forms of overseas investments to define sectoral limits.
Finance Minister Arun Jaitley said that “from now onwards, all FIIs, NRIs and other foreign investments… will be clubbed. It will be constituted as a composite cap”.
Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
The markets today opened with a quiet note and traded higher on easing of the concerns of Greece. The Market participants were also enthused by the announcement of diesel and petrol rate cut. Nifty today moved above the 8600 mark and going forward, it is likely to touch the 8650 mark. Nifty today closed at 8608 up around 84 points. The market breadth stood positive as there were seen 1564 stocks advancing against 1254 stocks declining. The Nifty volatility index, India VIX stood at 14.7825 down around 5.04%.
The mid-cap and small cap sector closed up around 1.33% and 0.75% respectively.
All the sectors closed in green and the major gainers for the day were Consumer Durables and Banking, which ended up around 2.06% and 1.91% respectively. The selected automobiles sector stocks were in the show on the back of diesel and petrol rate cut.
The gainers in the stocks’ front were Kotak Bank and Axis Bank, closed up around 4.17% and 4.16% respectively. Selling was seen in NMDC and VEDL which ended down around 1.48% and 1.20% respectively.
The FIIs were net buyers in the cash market segment on 15 July 2015, Wednesday, bought shares worth Rs 407.69 crore. The DIIs on the other hand were sellers on 15 July, sold shares worth Rs 50.38 crore in the capital markets segment.
The European markets were up as Greece’s approval of a new bailout turned the outlook for euro-area positive. Also the strong auto sales added to the support. The US index futures were also up.
Companies like Crisil, Dishman, ACC, Care Rating, Good Luck, GIC Housing, Inox Leisure, NIIT LTD, Omkar Chemicals, KTK bank and Vimta Labs are announcing their earnings tomorrow.
On the day, the 30-share BSE Sensex opened higher at 28,259.70 and firmed up further to 28,478.43 before ending at three-month closing high of 28,446.12, disclosing a sharp gain of 247.83 points or 0.88 per cent.
The index had last ended at 28,666.04 on April 16.
On similar lines, NSE Nifty rose 84.25 points or 0.99 per cent to close at three-month high at 8,608.05. It had also last ended at 8,706.70 on April 16.
Market View by Gaurav Jain, Director, Hem Securities
Markets continue their northward journey. Government approval on composite FDI cap resulting in more capital flowing into the system lifted the sentiment. Further, Greece law makers also has passed the austerity laws aimed at paving the way for a European Union-backed bailout boosted the investors confidence.
“Further, Greece lawmakers also has passed the austerity laws aimed at paving the way for a European Union-backed bailout boosted the investors confidence,” added Jain.
In overseas markets, European stocks were trading higher in their afternoon trade on Greece’s Parliament nod. Asian stocks too ended higher.
Market Analysis: Mr. Jayant Manglik, President, Retail Distribution, Religare Securities
Tracking firm domestic cues, markets edged higher on Thursday and gained close to a percent. Bias was upbeat from the beginning in response to trade deficit data, which narrowed to 10.8 billion in June as compared to 11.7 billion in same month previous year, announced post market on Wednesday. Some support also came in after the Union Cabinet gave its approval to review the existing foreign direct investment (FDI) policy today on various sectors by introducing composite caps for simplification of FDI policy to attract foreign investments. Following the benchmark index, majority of sectoral indices ended with decent gains and the market breadth was also inclined on the advancing side.
Considering today’s move in index, we expect Nifty to test 8700-8750 levels in near future. Broader participation especially index majors from the private banking pack has added to the confirmation of prevailing uptrend. Traders are advised to use any profit taking or consolidation to initiate fresh long position in private banking, NBFCs, Auto, Capital goods and Infra space. However, stock specific volatility will remain intact due to the ongoing earning season so avoid overtrading.
Meanwhile, foreign investors bought shares worth Rs 407.69 crore yesterday as per provisional data.
“Continued improvement in FII inflows post the reduction in global risk is intensifying Indiaâ€™s outperformance. The healthy interest of FIIs tells us that India is in a healthy spot,” said Vinod Nair, Head of Fundamental Research at Geojit BNP Paribas Financial Services.