Domestic equity indices BSE Sensex and NSE Nifty on Monday opened the day in red on RBI Governor Raghuram Rajan’s no to a second term, but soon recouped their losses on hectic buying by some institutions and soothing voices from rating agency Fitch and some prominent marketmen while fading Brexit worry helped too. Sentiments also got boost after government relaxed FDI norms in defence, aviation and pharmaceutical sectors.
The BSE Sensex closed 241 points up at 26,866.92, while Nifty settled 68.30 points up at 8,238.50.
Among the 51 components in the Nifty pack, Tata Motors gained the most — 3.87 per cent, followed by Tata Steel (up 3.43 per cent), Tata Motors DVR (up 2.74 per cent), Ambuja Cements (up 2.63 per cent) and Infosys (2.52 per cent). On the other hand, Axis Bank, Asian Paints, Sun Pharma, Eicher Motors and GAIL slid 0.93 per cent, 0.72 per cent, 0.63 per cent, 0.59 per cent and 0.59 per cent, respectively.
Nikhil Kamath, co-founder and director, Zerodha said, “RBI governor Rajan announced his resignation on Saturday which came as a surprise to most market participants, largely seen as move against incumbent politicians suspect to be advocating crony capitalism. The rupee tumbled on the back of this news to depreciate by 0.5 per cent, the government eased norms under the aviation policy which led most airline carries to rally intraday, concerns over the Brexit are heightening with 2 days left to go and a exit from the European Union could have negative implications for markets globally. Technically, the markets remain in a medium term uptrend whereas the short term remains susceptible to global pressures.”
The Centre on Monday radically liberalised the Foreign Direct Investment (FDI) regime, with the objective of providing major impetus to employment and job creation in India, as 100 per cent FDI was approved in the sectors of aviation, food and defence.
Asian equity markets ended higher on Monday, as worries over a potential British exit from the European Union receded and a weaker dollar supported commodity prices. Safe-haven assets and currencies like gold, government bonds and the yen retreated after three opinion polls on the EU referendum suggested the ‘Remain’ campaign is pulling back into the lead following the murder of pro-EU MP Jo Cox. A UK exit from the European Union could seriously hurt the British economy and possibly lead to a recession next year, the International Monetary Fund has warned.
3.16 pm: Meanwhile, under the new FDI norms, government allowed 74 per cent FDI in pharmaceutical sector under the automatic route which means that investors will not need government’s approval to invest up to 74 per cent in existing companies. Currently, FDI up to 100 per cent is permitted in new projects in the pharmaceutical sector but in Brownfield ones –the existing companies– the foreign investment is permitted through FIPB approval. The new norms will enable enhanced investments (in the form of M&A Activity) from the MNC companies, which believe in the growth potential of the Domestic Industry. The BSE Healthcare index was trading up by 0.31 per cent.
Sensex was up 253 points at 26,879.
3.09 pm: Sensex was trading 248 points up at 26,874. Nifty was trading 71.30 points up at 8,241. Apollo Hospitals is planning to invest close to Rs 650 crore in West Bengal over a five-year period. The investments will come in the form of a medical college, a gastro-science and liver institute and its second hospital in Kolkata. The ‘Institute of Gastro Sciences and Liver’ with 120 beds will be the first to come up. Shares of Apollo Hospitals were trading 0.30 per cent up at Rs 1,301.
2.40 pm: Bond yields traded higher on Monday as market-participants remained on the sidelines after the Reserve Bank of India Governor Raghuram Rajan said during weekend that he won’t continue to helm the central bank after his tenure ends on Sep. 4 2016.
2.27 pm: In the 50-share index, Tata Steel, HCL Technologies and Tech Mahindra were among top gainers. Meanwhile government approved 100% FDI in defence sector, broadcating, carriage services and airlines.
2.15 pm: Subros Ltd shares surged over 3 per cent on Monday after the company reinstated full supplies to its customer Maruti Suzuki India from its other plants at Noida, Pune and Chennai. Sensex was trading 188 points up at 26,814. Nifty was up 56.20 points at 8,226.40.
1.41 pm: Eros International Media Ltd shares were trading 2.74 per cent up at Rs 211.70 after the company said it will acquire 50 per cent stake in Puja Entertainment and Films but did not disclose the amount involved in the deal. Sensex was trading 159.41 points up at 26,785.32, while NSE Nifty was trading 48.40 points up at 8,218.60.
12.45 pm: Sensex extended gains and was trading 193 points up at 26,818. Nifty was up 53.15 points at 8,223.
11.46 am: Sensex was up 104.86 points at 26,731, while Nifty was up 25.05 points at 8,195. Meanwhile, Ace investor Rakesh Jhunjhunwala on Monday said Raghuram Rajan’s exit as RBI Governor may affect the markets, which could see a knee-jerk reaction. He was speaking to CNBC TV and added, “There will be no change as there is no crisis in Rajan going.”
11.45 am: Bajaj Auto, the second-largest motorcycle manufacturer is focusing to further increase its market share in mid-end bike segment. The Pune-based firm has also reduced the price of its Pulsar 134LS model by around Rs 4,000. Shares of Bajaj Auto were trading 1.53 per cent up at 2613.80.
11.07 am: Weak rupee brought some cheer for IT stocks amid Rexit worries as the BSE Information Technology index gained as much as 1.50 per cent in the early trade on Monday. Read more
10.50 am: Capital markets regulator Securities and Exchange Board of India (SEBI) proposed to allow real-estate investment trusts to invest more in assets under construction. Cheering the announcement, the Nifty Realty index was trading 0.60 per cent up at 193.10. Sensex was up 49 points at 26674. Nifty was trading 9.25 points up at 8,179.
10.31 am: Most of the Asian equity benchmarks are trading up in the early deals on Monday, as polls suggested British voters will choose to remain in the European Union in a referendum this week, easing investor worries about a possible ‘Brexit’. Meanwhile, Japanese stocks rose after the yen weakened against major currencies. However, the Shanghai Composite Index was marginally in red, dragged down by property companies after data over weekend showed Chinese home prices rose in fewer cities last month than in April. New-home prices excluding government-subsidized housing climbed in 60 cities in May, down from 65 in April, among the 70 tracked. Among the other Asian markets, South Korea, Singapore, Hong Kong, Taiwan, and Malaysia are also in positive territory. Bucking the trend, Indonesia is in negative territory.
10.05 am: Sensex was trading 96.76 points up at 26722. Nifty was up 26.10 points at 8,196. In the 50-share index, HCL Tech, Larsen & Toubro, Tech Mahindra, TCS and Hindalco were up between 1.21 per cent and 3.19 per cent. On the other hand, Bharti Infratel, Axis Bank, Asian Paints, Lupin and Aurobindo Pharma were down between 0.59 per cent and 1.31 per cent.
9.36 am: Benchmark index Sensex wiped off initial gains and was trading in green. The 30-share index was up 15.80 points, or 0.06 per cent, at 26,641. Manish Chokwani of Enam Holdings in an interview to CNBC TV 18 said, Rajan’s exit unlikelty to have a major impact on market.
9.27 am: Meanwhile, rupee slipped to its weakest in nearly a month, while stocks fell and bond yields rose after central bank governor Raghuram Rajan’s surprise announcement over the weekend that he would quit after his term ends in September.
9.16 am: Sensex was trading 174.02 points down at 26451.89. Nifty was down 56.95 points at 8,113.
Wall Street ended lower on Friday as Apple dragged down major indices and investors girded for Britain’s vote next week on its European Union membership.
Market benchmark Sensex on Friday rebounded by 100 points to finish at 26,625.91 on gains in FMCG, auto and realty stocks, driven by a lower current account deficit and trade gap coupled with revival in global cues.
(With agency inputs)