BSE Sensex rises 99.96 pts to end at 26,686.51; Nifty gains 33.40 pts to 8,047.30
The benchmark BSE Sensex today rose by 100 points to 26,686.51 on fag-end buying in banks and auto stocks as trade deficit narrowing to a three months low in May bolstered the outlook for country’s current account balance.
Sentiments turned positive following revival of buying by participants after trade deficit narrowed to USD 10.4 billion in May against USD 11.2 billion in the same month a year ago, equity brokers said.
Moreover, CBDT today said the taxmen will not resort to coercive methods to recover dues towards Minimum Alternate Tax (MAT) on capital gains made by FIIs and would wait for the Supreme Court order on the issue.
Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
Market is volatile and consolidating near the sensitive intermediary level of 8000. The immediate traction will depend to the outcome of FOMC meet and ongoing Greek-talk. Post the current global issues, the ultimate outlook for India will depend on improvement in global demand and increase in government spending to improve earnings outlook.
Globally, Asian markets retreated for the second straight session, tracking a global sell-off as Greece struggles to find a compromise with its creditors.
The 30-share BSE Index in late morning trade fell over 200 points to day’s low of 26,379.93 points as participants booked profits after two straight sessions of gains.
After mid-session, the index rebounded on buying in select key counters to hit high of 26,731.35 and finally settled with a gain of 99.96 points or 0.38 per cent at 26,686.51.
Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
Tracking the global cues, the Indian markets today remained shifting between gain and losses but rebounded in the second half. Since two days, the Nifty spot was getting support at 7940 levels and today the Nifty futures made a low of 7946, which shows Nifty, may get support at 7940 level for a short term perspective. Also the macroeconomic data coming out from Friday are giving hopes to traders. Today the trade deficit data came out, which narrowed to a three month low.
Nifty closed at 8047 up around 33 points. The market breadth stood negative as there were seen 1285 stocks advancing against 1336 stocks declining. The Nifty volatility index, India VIX stood at 17.1675 down around 2.03%. The mid-cap and small cap index closed up around 0.92% and 0.38% respectively.
The major buyers in the sectorial front were Auto and Consumer Durables which closed up around 1.34% and 1.15% respectively. The losers on the other end were Oil & gas and FMCG which closed down around 0.15% and 0.06% respectively.
In the stocks’ front, the major gainers were IndusInd bank and Tata Power which closed up around 3.68% and 2.71% respectively whereas the selling was seen in Idea and Cairn, which closed down around 3.87% and 3.22% respectively.
The FIIs were sellers in the cash market segment on 15 June 2015, Monday, sold shares worth Rs 604.86 crore. The DIIs on the other hand were buyers on 15 June, bought shares worth Rs 650.47 crore in the capital markets segment.
The European markets were trading lower, falling to a four month low. Now the investors’ focus was shifted towards the two day meeting of US Federal Reserve which starts today. The US index futures were also down.
The 50-issue NSE Nifty moved up by 33.40 points or 0.42 per cent to end at 8,047.30. During the day it had dipped below the 8,000-mark to touch a low of 7,952.35.
Tata Power was among the most sought after stocks as it closed up by 2.57 per cent to Rs 73.95 largely supported by covering-up of short positions, followed by Bajaj Auto at 2.44 per cent to Rs 2,391.35.
Market View by Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
After five consecutive days of selling in equity, FIIs had turned net buyers yesterday, while similar reversal in derivatives’ FII activity was also seen. Both these hinted at today’s shortcovering rallies, but early bias was obviously dominated by caution ahead of FOMC rate decision. Advance-Decline ratio improved through the day, with the last hour seeing sharp rise, especially from banking stocks, which have been looking for a further trigger to rise, after last week’s reports on capital infusion. Fall in trade deficit is positive sign, but it needs to be factored in that the fall is primarily due to a fall in gold imports, and exports have fallen YoY.
Hindustan Unilever, SBI, NTPC, Tata Motors, Hero MotoCorp, M&M, ICICI Bank, SBI, Axis Bank, HDFC Bank, Infosys, Hindalco, Maruti Suzuki, Cipla, Coal India, L&T, RIL and ONGC also notched handsome gains and supported the Sensex rise.
Market View by Gaurav Jain, Director, Hem Securities
Last hour of buying especially in banks pulled indices higher on the D-street on second straight day. India’s trade deficit narrowed to a three-month low in May, helped by lower gold imports, bolstering the outlook for its current account balance; thereby aiding the sentiment. Further, market awaits the two-day FOMC meet outcome which starts from today.
Out of 30-share Sensex, 22 stocks ended with gains.
Sectorwise, BSE consumer durables index gained the most by rising 1.18 per cent, followed by auto (1.08 pc), banking index (0.87 pc) and power (0.73 pc).
Greek standoff saps Europe, dollar swings ahead of Fed
Reuters – European shares hit a near four-month low and yields on lower-rated euro zone sovereign debt climbed to their highest point since November, as financial markets braced for the possibility of Greece defaulting on its debt.
Markets were also cautious ahead of the start of a two-day meeting of the Federal Reserve later on Tuesday, the latest step towards the U.S. central bank’s first rise in interest rates in almost a decade.
But the focus remained squarely on Greece’s fate in the euro zone after both Athens and its creditors hardened their stances following the latest breakdown in talks.
Greek Finance Minister Yanis Varoufakis told a German newspaper that he is not planning to present new reform proposals at a Eurogroup meeting on Thursday, despite warnings from the rest of Europe that time is running out.
Asked if he would present new plans, Varoufakis said: “No, because the Eurogroup (of euro zone finance ministers) is not the right place to present proposals which haven’t been discussed and negotiated on a lower level before.”
Germany’s DAX, France’s CAC and stock markets in Italy and Spain fell 0.7 – 1.5 percent as they extended their losses over the last few weeks to between 6 and 8 percent. Britain’s FTSE was down 0.5 percent.
The lure of the safety of German government debt also remained strong as Bund yields dropped, periphery euro zone yields pushed higher and the euro remained highly volatile in the currency market.
It was tossed back up to $1.13 as 1-month euro volatility, which hit a 3-1/2 year high on Monday, showed little sign of abating and as Europe’s top court said the bond buying plan European Central Bank chief Mario Draghi brought in in 2012 when he promised to do “whatever it takes” to save the euro was in line with EU law.
Traders were trying to position too for the Federal Reserve meeting, which will conclude on Wednesday with a quarterly news conference and provide updated forecasts.
Having spent much of the Asian session on the front foot, the dollar index which measures it against the world’s other top currencies, was virtually flat again in Europe.
“There is going to be some informational content in the dot charts, but it is going to be what chair Janet Yellen says at the press conference that will matter the most,” said Eric Stein at U.S.-focused investment manger Eaton Vance.
“The pace they go at (with hikes) and the terminal rate that they end are more important than the month they first hike, but the market is — wrongly in my opinion — viewing the timing of the first rate as a signal.”
FEELING THE PINCH
Global equity markets were feeling the pinch of combined Greek and Fed uncertainty.
“The macro duo of the FOMC and Greece continue to create jitters — it will be a daily theme for the next month … in the case of the Fed, the next three to four months,” Evan Lucas, market strategist at IG in Melbourne, wrote.
China’s high-flying stocks lost some altitude with a 3 percent tumble, South Korea’s Kospi fell 0.7 percent and Japan’s Nikkei dropped 0.6 percent, as the external factors overcame signs its economy is gaining traction.
Australian shares bucked the trend and ended flat as hopes for more easing by the Reserve Bank of Australia following its latest meeting minutes provided support.
The dollar had also received a small lift after Bank of Japan Governor Haruhiko Kuroda said his remarks on the yen last week were not an assessment of nominal forex levels. Kuroda had caused a sharp drop in the dollar last week when he told parliament the yen was already “very weak”.
In the main commodity markets U.S. crude oil rose as a tropical storm hit the coast of oil-producing Texas. U.S. crude was up 1 percent at 60.14 a barrel, paring the previous day’s losses suffered on Greek debt angst. Brent climbed 0.5 percent to $65.25 a barrel.
Global economy-sensitive metal copper was stuck near a three-month low at $5,787.50 a tonne, while traditional safe-haven gold retained most of its recent gains as it hovered at $1,183 an ounce.