Sensex ends up 241 points, Nifty above 8200 on FDI boosters

20 Jun 2016

3:30 pm Market closing: The market ended higher after a smart  rally throughout the day. The Sensex ended up 241.01 points or 0.9 percent at 26866.92, and the Nifty up 68.30 points or 0.8 percent at 8238.50. About 1381 shares have advanced, 1194 shares declined, and 193 shares are unchanged.

3:10 Gold prices: Gold prices declined by Rs 150 to Rs 29,650 per 10 grams today, mirroring a lifeless trend overseas amid slack demand from jewellers at prevailing higher levels.

Sentiment took a knock on subdued global trend where gold fell the most in almost a month as a poll showed that Britain may stay on in the European Union, hurting demand for safe haven investments, traders said.

Globally, gold lost 1.4 per cent to USD 1,280.47 an ounce, the biggest intra-day drop since May 24 in Singapore, and silver traded 0.8 per cent lower at USD 17.36 an ounce.

2:59 pm Market Update: Equity benchmarks gained further in late trade. The Sensex rallied 246.69 points or 0.93 percent to 26872.60 and the Nifty gained 69.75 points or 0.85 percent at 8239.95.

About 1357 shares have advanced against 1157 declining shares on BSE.

2:35 pm Europe strong: European stocks surged as declining fears of a Brexit vote buoyed global market sentiment, sterling and oil prices.

The pan-European STOXX 600 was up 2.6 percent. Global markets are reacting positively to several opinion polls over the weekend that showed that the remain camp was regaining momentum ahead of the referendum on European Union membership on Thursday.

Public opinion appears to have turned since the murder of pro-EU Labour MP Jo Cox last Thursday which led to the suspension of campaigning by both sides. However, pollsters claim that the death has had little impact on sentiment and the remain camp was always likely to gain support in the last few days running up to the vote. Campaigning has now resumed.

2:20 pm Suzlon deal: Wind Turbine maker Suzlon Group today said it has entered into a pact with CLP India for a 100 mw solar project at Veltoor in Telangana.

CLP India acquired 49 percent stake in SE Solar, a special purpose vehicle (SPV) set-up by Suzlon, as per the agreement signed between CLP India and Suzlon last week.

CLP India, a subsidiary of Hong Kong-based power company CLP, has the option to acquire the remaining 51 percent in future, the company said in a statement.

The project is expected to be commissioned by May and will be funded 80 percent by debt and 20 percent by equity.

2:00 pm Market Check
Equity benchmarks extended rally in afternoon trade with the Sensex rising 197.46 points to 26823.37 and the Nifty climbing 59.55 points to 8229.75 after approvals for FDI in various sectors.

The market breadth was also positive as about 1320 shares advanced against 1116 declining shares on Bombay Stock Exchange.

The government has made slew of announcements for various sectors by opening FDI. It has approved 74 percent FDI in brownfield pharma under automatic route, 100 percent in scheduled airlines & defence sectors. Dr Reddy's, Biocon Reliance Defence and Jet Airways rallied 2-8 percent.

1:55 pm Rupee reacts: India's rupee fell to a near one-month low and bonds weakened on Monday after central bank governor Raghuram Rajan, whose reforms have been credited for much of the economy's success in recent years, announced he would quit when his term ends in September.

While the currency partially recovered losses, investors warn Rajan's replacement, who is yet to be named, will need to be seen as credible and somebody who can defend the central bank's autonomy at a critical juncture in its history.

A deeper selloff in the currency was also likely averted by central bank intervention with the Reserve Bank of India seen selling dollars via state-owned lenders to curb the fall in the rupee soon after the open of trading, traders said.

1:45 pm Rupee outlook: India's rising foreign exchange reserves and a strong participation from Foreign Institutional Investors (FII) in the country will help keep the rupee stable despite Reserve Bank of India Governor Raghuram Rajan's exit, says Nilesh Shah, Manging Director, Kotak Mahindra Asset Management.

The FIIs have been very positive about the macro-economic stability of the country rising from RBI's constant efforts of targeting inflation and the government's path towards fiscal prudence, says Shah.

He feels that the Nifty and Sensex are clearly showing signs of a bull market. Investors have bought on dips created from the news of Rajan's departure. The markets in the near-term will see a consolidatory phase to see how the monsoon pans out. He recommends buying into the market at current levels.

1:30 pm IPO opening: Mahanagar Gas (MGL), India's second biggest CNG retailer, will hit the capital markets tomorrow to raise around Rs 1,040 crore through an initial public offer. The company, promoted by state-run GAIL and British Gas Asia Pacific Holdings Pte Ltd, is making an offer for sale of up to 24,694,500 equity shares of Rs 10 each.

British Gas and GAIL will sell up to 12,347,250 equity shares each in the IPO.

The gas distributor firm has fixed the price band of Rs 380-421 for its initial public offer.

The initial share-sale programme will open tomorrow and close on June 23. At the upper end of the price-band, the firm will garner Rs 1,039.64 crore.

Worries about  Raghuram Rajan not continuing his second term as RBI governor is
forgotten soon by market as benchmark indices continued to rally in afternoon trade trigged by global cues. European stocks surged as declining fears of a Brexit vote buoyed global market sentiment, sterling and oil prices. Global markets are reacting positively to several opinion polls over the weekend that showed that the remain camp was regaining momentum ahead of the referendum on European Union membership on June 23.

The Sensex is up 162.60 points or 0.6 percent at 26788.51, and the Nifty is up 47.50 points or 0.6 percent  at 8217.70. About 1283 shares have advanced, 1035 shares declined, and 168 shares are unchanged.

Tata Steel, ONGC, TCS, Infosys and L&T are top gainers while Axis Bank, Asian Paints, Coal India, Lupin and Sun Pharma are losers in the Sensex.

Gold prices fell Rs 168 percent to Rs 30,434 per 10 grams in futures trade today as participants cut their bets amid a weak global trend. Analysts attributed the fall in prices to weak trend overseas after gold tumbled as a poll showed a tilt in favour of Britain remaining in the European Union just days before a historic vote, hurting demand for haven investments.

12:59 pm Market Update: Equity benchmarks extended rally in afternoon trade with the Sensex rising 164.89 points to 26790.80 and the Nifty climbing 47.50 points to 8217.70.

About 1282 shares advanced against 1034 declining shares on Bombay Stock Exchange.

12:40 pm Europe opens: European stocks surged higher at the open today as declining fears of a Brexit vote buoy global market sentiment, sterling and oil prices.

The pan-European STOXX 600 was up 1.82 percent.

Global markets are reacting positively to several opinion polls over the weekend that showed that the "Remain" camp was regaining momentum ahead of the referendum on European Union membership on Thursday.

The British pound has climbed as Brexit concerns have eased, reaching USD 1.4568 in the European trading session on Monday, compared to levels of around USD 1.40 on Thursday. Oil prices also extended gains on Monday, due in part to the weaker dollar and Brexit concerns easing.

12:25 pm Kotak on rupee: India's rising foreign exchange reserves and a strong participation from foreign institutional investors (FII) in the country will help keep the rupee stable despite Reserve Bank of India Governor Raghuram Rajan's exit, says Nilesh Shah, Manging Director, Kotak Mahindra Asset Management.

The FIIs have been very positive about the macro-economic stability of the country rising from RBI's constant efforts of targeting inflation and the government's path towards fiscal prudence, says Shah.

He feels that the Nifty and Sensex are clearly showing signs of a bull market. The investors have bought the dips created from news of Rajan's departure. The markets in the near term will see a consolidatory phase to see how the monsoon pans out. And may soon continue to grow. He recommends buying into the market at current levels.

The Goods and Services Tax (GST) and above average monsoons, he says, will be the major drivers of the Indian economy. This will lead to a recovery in earnings for many sectors.

12:10 pm Market Expert: Raamdeo Agrawal of Motilal Oswal Financial Services talking about Rajan's exit is of the belief that the RBI is far bigger than a person, which was proved by the fact that markets after an initial downtick recovered and started trading in the green. Agrawal does not think the Rexit event could dent the market.

Agrawal says if one has to be in the stock market, one has to be optimistic come what may. According to him the current bull market is intact.

Market basically moves on two things – earnings and earnings outlook.

So far bank consolidation which had been in the pipeline is now taking shape through the SBI merger and one could see more mergers and acquisitions in that space going forward, says Agrawal.

According to him the year 2018-19 is going to be very important for this government in terms of reforms, government expenditure, etc, taking shape.

12:00 pm Market Check
Equity benchmarks gained strength after shrugging off the RBI Governor Raghuram Rajan's exit and pricing in hopes of Britain staying in European Union.

The Sensex rose 109.88 points to 26735.79 and the Nifty gained 29.35 points at 8199.55. The market breadth also improved a bit as about 1168 shares advanced against 1043 declining shares on BSE.

Tech Mahindra, HCL Technologies, TCS, UltraTech Cement, Infosys, TCS, Hero Motocorp, L&T and Tata Motors gained 1.5-2 percent.

Asia markets were mostly higher, amid easing Brexit concerns after several weekend polls showed the remain camp regained momentum ahead of a referendum vote to decide the UK's future within the European Union (EU).

Oil extended gains in Asian trading as a weaker dollar and easing worries over Britain's possible exit from the European Union helped support crude.

11:55 am Coal auction: After conducting auctions of coal linkages for the sponge iron sector, CIL will go forward with the bidding for the cement sector by the end of this month.

Coal India (CIL) has been directed to conduct auction of coal-linkages for the non-regulated sector to ensure fuel supply to end users.

According to a source, the e-auction for the cement sector is scheduled to start from June 28.

"Notice inviting application (for the auction of linkages for cement sector) was published on June 11," the source said. This will the second sale of the dry fuel for non-regulated industries through bidding route.

11:45 am Udayan's views: With Reserve Bank chief Raghuram Rajan not willing to continue after September when his first term ends, some knee-jerk market reaction is expected, but nothing major, says CNBC-TV18's Consulting Editor Udayan Mukherjee.

If Brexit gets out of the way and monsoons are good, the Nifty could return to 8300-8400 levels.

The key source of worry is global economy, says Mukherjee. India story is coming back into place with improvement in earnings and other indicators. If market has to rally, if global market permits, Bank Nifty will lead, he adds.

11:30 am Market outlook: Raamdeo Agrawal of Motilal Oswal Financial Services  does not think the Rexit event could dent the market. Agrawal says if one has to be in the stock market, one has to be optimistic come what may. According to him the current bull market is intact. Market basically moves on two things – earnings and earnings outlook. So far bank consolidation which had been in the pipeline is now taking shape through the SBI merger and one could see more mergers and acquisitions in that space going forward, says Agrawal. According to him the year 2018-19 is going to be very important for this government in terms of reforms, government expenditure, etc, taking shape.

The market is still making steady gains after knee-jerk reaction to Reserve Bank of India's governor Raghuram Rajan not continuing for second term. The Nifty is below 8200-mark, up 14 points or 0.2 percent at 8184.20. The Sensex is up 66.11 points or 0.2 percent at 26692.02.

Infosys, L&T, TCS, Hero MotoCorp and ONGC are top gainers while Axis Bank, Asain Paints, Lupin, ICICI Bank and Coal India are losers in the Sensex.

Oil prices extended gains today on the back of a weaker US dollar and easing fears of a UK exit from the European Union. The US dollar fell for the fourth day in a row today, trading lower against most major currencies, making the dollar-priced commodity cheaper for those using other currencies and pushing up demand.

US crude last week plunged nearly 10 percent in six days after hitting 11-month highs the previous week while European Brent had given up 9 percent.

10:57 am Market Update: Equity benchmarks traded higher. The Sensex rose 64.86 points to 26690.77 and the Nifty advanced 14.20 points to 8184.40.

About 1059 shares advanced against 999 declining shares on BSE.

10:52 am Interview: The steel market continues to be volatile currently. Soon after the government had implemented minimum import price (MIP), international prices had gone up, which are again softening now, says Ravi Uppal, MD & CEO of JSPL .

''The whole market is in a fluid stage,'' he says.

Even if MIP is not extended, some protective mechanism is needed for the industry, Uppal says, adding that extending MIP for the short-term is also a good option.

In the power sector, demand and rates continue to be tepid. The implementation of UDAY scheme will push power rates up, he says. The company's plant load factor (PLF) of power business is at 50 percent plus level and average realisation is Rs 3 per unit.

10:46 am Coal auction: After conducting auctions of coal linkages for the sponge iron sector, CIL will go forward with the bidding for the cement sector by the end of this month.

Coal India (CIL) has been directed to conduct auction of coal-linkages for the non-regulated sector to ensure fuel supply to end users.

According to a source, the e-auction for the cement sector is scheduled to start from June 28.

"Notice inviting application (for the auction of linkages for cement sector) was published on June 11," the source said.

This will the second sale of the dry fuel for non-regulated industries through bidding route.

10:40 am Market Expert: Vallabh Bhansali Chairman of Enam Securities does not expect the Raghuram Rajan's exit to be an overhang for the market. Echoing other market experts he too believes the institution is far bigger than a person.

Although on a personal level, he is saddened with his exit, life goes on.

Going forward, earnings will remain a key trigger for the market and he would be watching the first quarter closely, says Bhansali.

With regards to Brexit, he says, if it happens the market may not react too much because the news is already discounted.

Monsoon, too, is a big trigger and if it is good as expected, then inflation could be seen trending down, making a case for a rate cut, says Bhansali.

10:32 am Asia Update: Asia markets were mostly higher while the pound rose today, amid easing Brexit concerns after several weekend polls showed the remain camp regained momentum ahead of a referendum vote to decide the UK's future within the European Union (EU).

The benchmark Nikkei 225 was up 2.4 percent as a relatively weaker yen took some pressure off stocks and investors ignored news of a more than 11 percent drop in Japanese exports for the month of May. Across the Korean Strait, the Kospi gained 1.45 percent. In Hong Kong, the Hang Seng index added 1.08 percent.

Bucking the trend were the Chinese mainland markets, with the Shanghai composite down 0.17 percent and the Shenzhen composite flat.

10:25 am Deutsche on HDFC-Max merger: The proposed merger of HDFC Life and Max Life would create the largest private life insurance company in India by individual premium market share.

Deutsche Bank says the merger could lead to significant synergies in terms of product mix and distribution and also drive cost efficiencies.

As a first step, Max Life is expected to be merged with Max Financial Services (MFS) and then MFS would merge with HDFC Life. By virtue of MFS already being a listed company, this would lead to a listing for HDFC Life, it adds.

Max Financial Services (MFS) gained around 25 percent over the past month. Deutsche believes that at current valuations most of the merger benefits are already priced in. Hence, it downgrades MFS to hold.

10:20 am Bajaj Auto to up market share: After overtaking rivals Hero MotoCorp and Honda Motorcycle and Scooter India (HMSI) in the mid-end motorcycle segment in the first two months of the ongoing fiscal, Bajaj Auto is focussing to further increase market share in the category.

In order to turn up the heat on its competitors, the Pune-based firm has also reduced the price of its Pulsar 134LS model by around Rs 4,000.

In the mid-end segment (more than 110cc to less than 150cc) of the motorcycle market, as per SIAM data, sales were at 5,90,318 units in the April-May period this fiscal, up 35.57 percent from 4,35,412 units in the year-ago period.

Bajaj Auto sold 1,75,190 units during the period as against 94,761 units in the corresponding period last fiscal, up 84.87 percent.

On the other hand Hero Motocorp sold 1,58,304 units in the April-May period this fiscal in the segment as against 1,28,767 units in the year ago period.

10:15 am Oil Update: Oil prices extended gains as a weaker dollar and easing worries over Britain's possible exit from the European Union helped buy back the commodity after six straight days of declines.

London Brent crude for August delivery was up 47 cents at USD 49.64 a barrel, after settling up USD 1.98, or 4.2 percent, at USD 49.17 on Friday.

NYMEX crude for July delivery, which expires on Tuesday, was up 52 cents at USD 48.50 a barrel, after closing up USD 1.77, or 3.8 percent, on Friday.

10:10 am Udayan on Market: With Reserve Bank chief Raghuram Rajan not willing to continue after September when his first terms ends, some knee-jerk market reaction is expected, but nothing major, says CNBC-TV18's Consulting Editor Udayan Mukherjee.

''(Rajan leaving) it is not a good move; it's an anti-reform move,'' he says. However, he adds that the move isn't ''big liquidity exodus kind.''

If Brexit gets out of the way and monsoons are good, the Nifty could return to 8300-8400 levels.

The key source of worry is global economy, says Mukherjee. India story is coming back into place with improvement in earnings and other indicators. If market has to rally, if global market permits, Bank Nifty will lead, he adds.

10:05 am Nifty reclaims 8200: The index reclaimed 8200 after recouping 90 points from day's low. The Sensex gained 100 points as Infosys gained more strength.

10:00 am Market Check
The market bounced back after its early losses, tracking positive global cues. It shurgged off the RBI Governor Raghuram Rajan's exit and started focussing on Britain's referendum due on Thursday. Today's global rally is on hopes that UK is unlikely to exit European Union.

The Sensex rose 66.94 points to 26692.85 and the Nifty advanced 12.55 points to 8182.75.

Infosys, L&T, TCS and Tata Motors gained a percent each while Axis Bank, Asian Paints, ICICI Bank, Lupin and Sun Pharma fell 0.5-1 percent.

9:55 am Big bull: Rakesh Jhunjhunwala of Rare Enterprises said bull markets will climb a wall of worry. "Nothing is changed if Rajan is not there," he said commenting on Raghuram Rajan's exit this September.

When Rajan came in 2013, there was a crisis and India was among the Fragile Five nations, but not anymore, says the ace investor. Now the interest rate cuts are being transmitted by the banks to the customers, and inflation is down, he said, adding that there is bound to be a knee-jerk reaction following the news.

More importantly Brexit, monsoon and corporate performance will determine the course of the markets, he said.

9:45 am Ajay Bodke of Prabhudas Lilladher said monsoon will hold the key to how the markets play out.

"There has been a 25 percent deficiency in the expected rainfall so far."

On Raghram Rajan's exit he said as long as the Reserve Bank of India chooses someone who is independent-minded, the markets should be able to take the news in their stride.

But Bodke believes the steel sector will benefit if the minimum import prices get extended.

9:40 am Rupee impact: Brokerage house Nomura sees some risk of debt outflows in the near term because of the unexpected departure of RBI Governor Raghuram Rajan.

''Given Dr. Rajan's high credibility in bringing down inflation, his exit places a question mark over the RBI achieving its medium-term inflation targets,'' says the Nomura note to clients.

Also, Nomura feels Rajan's impending exit leaves room for doubt over whether or not the government will adhere to medium-term fiscal discipline.

9:35 am Macro outlook: Indian economy, which has enjoyed a "macro-sweet" spot in recent years, is expected to see increasing external and internal uncertainties, says a Deutsche Bank report.

According to the global financial services major, while the medium term outlook of the economy remains constructive, latest data releases are "somewhat disappointing".

In recent years, the country had witnessed declining inflation, stable rupee, and improving fiscal and external deficits, while external risks have been high during this period, with weak export demand, concerns about Fed, China, EU, UK referendum and regional geopolitics. "There clearly won't be any respite from external risks this year, but we reckon that the some domestic factors are about to turn noisy as well," the report noted.

9:30 am Market check: The market has recovered post early knee-jerk reaction. The Sensex is down 25.69 points or 0.1 percent at 26600.22 and the Nifty is down 15.55 points or 0.2 percent at 8154.65. About 545 shares have advanced, 820 shares declined, and 79 shares are unchanged.

Infosys, Dr Reddy's Labs, TCS, ONGC and Cipla are top gainers while Axis Bank, ICICI Bank, Asian Paints, SBI and Lupin are losers in the Sensex.

9:25 am Fund flow: Continuing their bullish stance on India, foreign investors have pumped in close to Rs 4,400 crore into the country's stock markets so far this month, driven by hopes of an above normal monsoon.

It comes following a staggering inflow of more than Rs 32,000 crore in the preceding three months (March-May).

Foreign Portfolio Investors (FPIs) turned net buyers of equities in March after pulling out a massive Rs 41,661 crore from the market in the previous four months (November- February).

The market has opened lower Monday amid speculation on who will replace Raghuram Rajan as the next Reserve Bank of India governor. Rajan will return to academia when his current term ends on September 4, he said in a message to central bank staff on Saturday.

The Sensex is down 159.76 points or 0.6 percent at 26466.15. The Nifty is down 54.45 points or 0.7 percent at 8115.75. About 94 shares have advanced, 221 shares declined, and 29 shares are unchanged.

GAIL, Bharti, Wipro, M&M and ITC are gainers in the Sensex while SBI, BHEL, ICICI Bank, HDFC and Adani Ports are major losers.

The Indian rupee slipped in the early trade on Monday. It has opened lower by 57 paise at 67.65 per dollar versus 67.08 Friday.

Credit Suisse says that the RBI governor Raghuram Rajan's unexpected departure is negative for the currency as it raises uncertainty over the new monetary policy framework and managing potential volatility around events like FCNR redemption in Sep-Nov 2016. It expects the Indian currency to depreciate to 67.70 in three months and 71.0 in 12 months.

The Japanese yen traded at 104.66 against the dollar, after pushing as high as 103.58, after the Bank of Japan decided to stand pat on monetary policy on Thursday.

Asian markets are positive after several weekend polls showed the remain camp regained momentum ahead of a referendum vote to decide the UK's future within the European Union (EU). The Britons will vote to decide if the UK should leave or stay within the 28-member EU trade bloc on June 28.

The benchmark Nikkei 225 was up 2.62 percent as a relatively weaker yen took some pressure off stocks. Across the Korean Strait, the Kospi gained 1.16 percent. The International Monetary Fund (IMF) warned on Friday of "negative and substantial" net economic effects should the UK choose to leave.