Rallying for the eighth consecutive session, the benchmark BSE Sensex on Tuesday rose 74.16 points to 27,804.37, its longest winning streak this year as above-normal monsoon has eased inflation concerns.
Sentiment got a boost after Finance Minister Arun Jaitley on Monday said the government will soon infuse capital in public sector banks, equity brokers said.
Hopes that better-than-forecasted monsoon may help the RBI cut rates sooner than expected, too triggered buying activity, they added.
Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
Finance Ministers drive to sell India-story to the foreign investors has provided additional momentum to the recent rally. Much of this rally is led by higher liquidity in MF and F&O, but overall turnover is light. Tailwinds like good development to monsoon till date, better CPI numbers and increase in MSP has improved domestic sentiment. Apprehension comes on sustainability of the momentum as FII liquidity continues to be muted.
The BSE Sensex resumed higher at 27,760.11, but slipped into negative terrain briefly as profit-booking emerged at higher levels. However, it bounced back to hit a high of 27,882.66, before settling at 27,804.37, a gain of 74.16 points or 0.27 per cent.
In eight straight sessions, its longest winning-run since January 27, the Sensex has zoomed by 1,433.39 points.
The NSE Nifty ended with a gain of 28.45 points or 0.34 per cent at 8,381.55 after shuttling between 8,398.45 and 8,334.95.
Besides, positive global cues on revived hopes of Greece striking a deal with its creditors, buoyed trading sentiments.
Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services Ltd
Global equity investors were optimistic on Greece move to avert default, and also pick-up in euro zone PMI data helped the sentiment further to improve. Our markets too opened with a positive note later came down to a level of 8334.95 later recovered and finally closed above its crucial support level at 8359 (200 day moving average). If Nifty manages to trade above this level for a day or two then we can expect further uptrend to Nifty. Easing concerns of monsoon, positive cues from euro zone and short covering ahead of F&O expiry can take Nifty towards 8500 levels in the near term.
Nifty closed at 8381 gained nearly 0.34% and it made a high at 8398.45. On Nifty 50, 33 stocks advanced and 17 stocks declined. Banking and auto stocks were in good demand.
FII bought equities worth 651.31 crores during the previous day and also they bought huge positions in futures and option segment ahead of expiry which will be on 25th June.
Ahead of the futures and option segment expiry INDIA VIX declined by 2.87% at 15.0425 indicates positive outlook for the markets.
Prominent gainers among the Sensex stocks were Coal India, Cipla, L&T, M&M, NTPC, ITC, HDFC, Bharti Airtel, Tata Steel, Maruti Suzuki, SBI, GAIL, Hindalco, RIL, Dr Reddy’s, Hindustan Unilever, HDFC Bank, ONGC and Sun Pharma.
Among 30-Sensex components, 19 stocks gained, while Vedanta ended flat.
Market View by Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
Even as Indian markets see sawed, with news from Greece flowing in the background, economic data from Chinese data showed signs of improvement. Though the 49.6 PMI figures suggest that Chinese manufacturing is still contracting, it is nevertheless an improvement over previous month. This puts the relative attractiveness of Indian markets into perspective, but data also showed that China shed jobs at the fastest pace in over six years. Meanwhile, the big moves in Euro and equities suggest that both these asset classes are responding to the possible outcomes for June 30th IMF debt payment deadline, though it is noteworthy that the scale of movement of both assets have not been huge enough to warrant such a contingency event.
Sectoriwse, the BSE metal index gained the most by surging 1.71 per cent, followed by capital goods 1.41 per cent, PSU 1.18 per cent, oil and gas 0.83 per cent, realty 0.33 per cent, bankex 0.33 per cent and FMCG index 0.28 per cent.
In line with broad trend, Small-cap index rose 0.45 per cent and mid-cap was up 0.08 per cent.
Market View by Gaurav Jain, Director, Hem Securities
Indian benchmarks traded in a narrow range throughout the trading session, tough shutting the day on a positive note. Strong global cues on hopes that Greece will come to some kind of reforms-for-rescue deal with its international creditors this week after Athens presented a new set of reform proposals. Further, renewed buying interest by the foreign portfolio investors uplifted the sentiment.
Meanwhile, foreign investors bought shares worth Rs 651.31 crore during Monday’s session.
Globally, Japan’s Nikkei index climbed 1.87 per cent to close at new 15-year high, while European markets were up in their early trade on hopes for a Greek bailout deal.
Greece optimism lifts stocks but strong dollar tempers euro
Reuters – Optimism that a deal could be at hand to stave off a Greek default lifted global shares on Tuesday and cut borrowing costs for the euro zone countries considered most vulnerable to the protracted crisis.
European shares gained more than 1 percent to reach three-week highs and the risk premium that investors demand to hold Italian 10-year government bonds over German Bunds fell to its lowest for more than a month.
Wall Street was also expected to open higher, according to stock index futures.
The euro missed the party, though. It fell more than 1 percent against a dollar boosted by further evidence of U.S. economic strength and against the yen and sterling.
Greece presented new proposals on Monday that euro zone leaders welcomed as a basis for a possible agreement to unlock aid and avert default and a potential exit from the euro.
“It now appears that we will have a short-term solution to the problem,” said Andreas Clenow, hedge fund trader and principal at ACIES Asset Management.
But some euro zone leaders cautioned that much work still needed to be done, and some Greek lawmakers reacted angrily to concessions offered by Athens.
The pan-European FTSEurofirst 300 index rose 1.2 percent. France’s CAC 40 index rose a similar amount and Germany’s DAX 1.0 percent. Greek stocks soared 4.5 percent.
Also fuelling the rally were better-than-expected data on factory and service sector activity in France, Germany and the euro zone overall, according to Markit’s preliminary June purchasing manager indexes.
Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.7 percent. Japan’s Nikkei jumped 1.9 percent to a fresh 15-year high.
China’s CSI 300 index of the biggest listed companies in Shanghai and Shenzhen closed up 3.2 percent.
Chinese factory activity showed signs of stabilising in June. The HSBC/Markit flash manufacturing PMI edged up to a three-month high of 49.6 from 49.2, still below the 50 mark that separates expansion from contraction.
Low-risk German 10-year government bond yields fell 1 basis point to 0.88 percent.
Yields on 10-year bonds from Italy and Spain , two countries whose debt markets have felt some contagion from Greece in recent weeks, were down 7 and 6 bps at respectively. The spread of Italian 10-year yields over German equivalents tightened to its narrowest since mid-May.
The euro weakened 1.0 percent against a stronger dollar after data on Monday showed sales of existing U.S. homes rose to a 5 1/2-year high in May. That kept the Federal Reserve on track to raise interest rates later this year, which lifted the dollar 0.5 percent against a basket of currencies.
The euro last traded at $1.1220, having hit $1.1440 on Thursday. The yen was down 0.2 percent at 123.58 per dollar.
The U.S. housing data and the progress on Greece pushed U.S. Treasury yields higher. Ten-year yields were at 2.38 percent, up from 2.36 percent in New York on Monday.
Oil prices were barely changed as the European PMI data and optimism over Greece offset the prospect of oversupply. Brent crude was flat at $63.39 a barrel.
Gold held on to losses as the Greece talks and stronger equities reduced its safe-haven appeal. Spot gold was last steady at $1,182.10 an ounce.
With PTI inputs