Tuesday, July 12, 2016

THE END SESSION ( 12 / 07 / 2016 )

Nifty hits more than eleven-month closing high


Positive cues from global markets aided the latest upmove on the domestic bourses. The barometer index, the S&P BSE Sensex, rose 181.45 points or 0.66% to settle at 27,808.14. The Nifty 50 index rose 53.15 points or 0.63% to settle at 8,521.05. The Sensex and the Nifty hovered in positive zone throughout the trading session after opening with upward gap. Key indices gained for the second day in a row today, 12 July 2016. The Sensex hit its highest closing level in almost eleven months. The Nifty hit more than eleven-month closing high.

The market sentiment was positive after data showing substantial purchases of Indian stocks by foreign funds during the previous trading session. In overseas stock markets, Asian and European stocks rose after better American jobs data and hopes for continued support from the world's central banks helped power Wall Street to a record high overnight.

The market sentiment was boosted after data showing substantial purchases of Indian stocks by foreign funds during the previous trading session. Foreign portfolio investors (FIIs) bought shares worth a net Rs 1070.10 crore from the secondary equity markets yesterday, 11 July 2016, as per data from the National Securities Depository (NSDL). The Sensex had surged 1.84% yesterday, 11 July 2016.

The Sensex rose 181.45 points or 0.66% to settle at 27,808.14, its highest closing level since 19 August 2015. The index gained 202.05 points or 0.73% at the day's high of 27,828.74. The index rose 41.12 points or 0.15% at the day's low of 27,667.81.

The Nifty gained 53.15 points or 0.63% to settle at 8,521.05, its highest closing level since 10 August 2015. The index gained 58.70 points or 0.69% at the day's high of 8,526.60. The index rose 11.30 points or 0.13% at the day's low of 8,479.20.

Among sectoral indices on BSE, the S&P BSE Realty index (up 2.02%), the S&P BSE Metal index (up 2.87%), the S&P BSE Bankex (up 1.62%), the S&P BSE Consumer Durables index (up 0.91%), the S&P BSE Energy index (up 0.71%), the S&P BSE Basic Materials index (up 1.48%), the S&P BSE Finance index (up 1.28%) outperformed the Sensex.

The S&P BSE Auto index (up 0.57%), the S&P BSE Industrials index (up 0.15%), the S&P BSE Capital Goods index (up 0.25%), the S&P BSE IT index (down 0.03%), the S&P BSE Telecom index (up 0.62%), the S&P BSE Teck index (up 0.1%), the S&P BSE Oil & Gas index (up 0.41%), the S&P BSE FMCG index (down 0.48%), the S&P BSE Power index (down 0.07%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.57%), the S&P BSE Utilities index (up 0.05%) and the S&P BSE Healthcare index (down 0.49%) underperformed the Sensex.

The market breadth indicating the overall health of the market was negative. On BSE, 1,519 shares declined and 1,243 shares rose. A total of 170 shares were unchanged. The BSE Mid-Cap index rose 0.49%. The BSE Small-Cap index gained 0.08%. Both these indices underperformed the Sensex.

The total turnover on BSE amounted to Rs 3132 crore, lower than turnover of Rs 3286.93 crore registered during the previous trading session.

In overseas stock markets, European stocks edged higher on waning Brexit fears after British Prime Minister David Cameron yesterday, 11 July 2016, announced that Theresa May would succeed him as Britain's new Prime Minister, ending speculation over who would succeed Cameron. While main European markets traded decisively higher, in the UK, the FTSE 100 index was currently hovering near the flat line. May is expected to take charge as Britain's new Prime Minster on Wednesday evening.

Earlier during the global day, Japanese stocks led gains among Asian equities as investors gained confidence in Japanese Prime Minister Shinzo Abe's ruling coalition, which increased its control in the upper house of parliament after election for the upper house held on 10 July 2016. The Nikkei 225 Average closed 2.46% higher. Anticipation was also growing that Abe would soon introduce a fresh fiscal stimulus package to help the stagnant economy. Speculation was also growing that an expected meeting between former US Federal Reserve Chairman Ben Bernanke and Abe today, 12 July 2016, would include talks about a radical measure in which a central bank directly funds government spending. The Nikkei 225 Average surged 4% yesterday, 11 July 2016, registering its biggest daily-percentage gain since 2 March 2016, as Abe's ruling-coalition victory in the upper-house election stoked speculation of more fiscal stimulus.

US stocks edged higher yesterday, 11 July 2016, with the S&P 500 index hitting record high on intraday as well as on closing basis as investors bought stocks amid a reinvigorated appetite for assets perceived as risky following a surprisingly strong jobs report for June 2016 released during trading hours in the US on Friday, 8 July 2016.

Shares of staffing firm Quess Corp settled at Rs 503 on BSE, a premium of 58.68% over the initial public offer price of Rs 317 on its debut on the stock exchanges today, 12 July 2016. The stock debuted at Rs 499, a premium of 57.41% to the initial public offer (IPO) price. The stock hit a high of Rs 508.60 and a low of Rs 480.05 in intraday trade. On BSE, 32.23 lakh shares were traded on the counter. Quess Corp provides comprehensive solutions including recruitment, temporary staffing, technology staffing, IT products and solutions, skill development, payroll, compliance management, integrated facility management and industrial asset management services.

Metal and mining stocks edged higher as copper prices rose in global commodity markets. Tata Steel (up 4.97%), Steel Authority of India (Sail) (up 5.17%), National Aluminium Company (up 12.99%), Hindustan Zinc (up 3.16%), Jindal Steel & Power (up 8.43%), NMDC (up 0.26%), Hindustan Copper (up 2.17%) edged higher.

JSW Steel rose 2.62% to Rs 1,545. The stock hit a high of Rs 1,550 in intraday trade, a record high for the counter. The stock hit low of Rs 1,508 in intraday trade.

High Grade Copper for September 2016 delivery was currently up 1.91% at $2.1885 per pound on the COMEX.

Vedanta jumped 8.55% to Rs 161.30. The stock hit a high of Rs 162.10 in intraday trade, also its 52-week high. The stock hit low of Rs 149.50 in intraday trade.

Hindalco Industries advanced after Alcoa, the largest US aluminum producer, reported quarterly earnings and revenue that beat analysts' expectations. The stock gained 5% to Rs 135.50. The stock hit a high of Rs 136.15 in intraday trade, also its 52-week high. The stock hit low of Rs 130 in intraday trade. Alcoa announced its second-quarter results after trading hours in the US yesterday, 11 July 2016.

Bank stocks edged higher on renewed buying. Among private sector banks, HDFC Bank (up 0.1%), and Yes Bank (up 0.97%) rose. Kotak Mahindra Bank shed 0.1%.
Axis Bank rose 3.03% on reports that a foreign brokerage has maintained its overweight rating on the stock. The foreign brokerage reportedly expects Axis Bank's watchlist of stressed loans to be stable going forward in the current financial year (FY 2017). The brokerage said that Axis Bank is focused on building retail loan book. The bank has built healthy retail franchise on liability side, the brokerage added.

ICICI Bank rose 4.68%. The bank said that S&P Global Ratings affirmed its 'BBB-' long-term issue ratings on the senior unsecured bonds issued by the Bahrain branch of ICICI Bank (foreign currency: BBB-/Stable/A-3). The rating agency said it removed the ratings from CreditWatch, where they were placed with negative implications on 22 February 2016. At the same time, it raised the Greater China regional scale rating on ICICI Bank's CNY600 million 4% bonds maturing 2017 to 'cnA-' from 'cnBBB+', and removed it from CreditWatch, where it was placed with developing implications on 22 February 2016. Australian-dollar- and Chinese renminbi-denominated irrevocable and unconditional standby letters of credit (SBLCs) provided by the DIFC branch of ICICI Bank support these bonds.

The rating agency has equalized the ratings on the bonds with the ratings on ICICI Bank. This reflects its opinion that the credit quality of these bonds has improved because it views the SBLC provider as an additional source of repayment and assume that the trustee will deliver the demand notice in time. The SBLCs are irrevocable, unconditional, and provide timely and sufficient coverage for the bonds' principal and interest repayment obligations. The SBLCs mitigate exposure to ICICI Bank's Bahrain branch by substituting the credit risk of the SBLC provider in its place. The announcement was made during market hours today, 12 July 2016.

IndusInd Bank rose 0.04% after the private sector bank announced the opening of IFSC banking unit (IBU) at the Gujarat International Finance Tec-City (GIFT City) to meet the requirements of offshore banking operations in India. IndusInd Bank's International Banking Unit (IBU) will provide the bank access to international financial markets and will allow IndusInd to deliver a complete range of products to its clients with foreign currency funding requirements. The bank will now be able to actively offer products such as external commercial borrowings to its customers, an area where it had limited capabilities hitherto. The announcement was made during market hours today, 12 July 2016.

IndusInd Bank's net profit rose 25.96% to Rs 661.38 crore on 22.36% growth in total income to Rs 4264.66 crore in Q1 June 2016 over Q1 June 2015. The result was announced during trading hours yesterday, 11 July 2016.

Among PSU bank stocks, State Bank of India (SBI) (up 0.82%), Canara Bank (up 0.76%), Bank of India (up 0.31%) and Union Bank of India (up 2.04%) rose. Punjab National Bank (down 0.75%) and Bank of Baroda (down 0.89%) declined.

IDFC Bank jumped 7.8% after the bank announced signing a share purchase agreement to acquire 100% of Grama Vidiyal Micro Finance, one of the largest microfinance institutions in the country. Upon completion of acquisition, Grama Vidiyal will be a wholly‐owned subsidiary of IDFC Bank. Grama Vidiyal will act as a dedicated Business Correspondent of IDFC Bank, and will help deepen reach and widen the delivery mechanism for banking services. The move enables IDFC Bank to significantly enhance its network and reach and make basic banking services available to a large customer base. Grama Vidiyal's has an AUM (Assets Under Management) of Rs 1502 crore of micro finance assets as on 31 March 2016. All loan assets on the book will be transferred to IDFC Bank. The announcement was made during market hours today, 12 July 2016.

Shares of PSU Coal mining major Coal India lost 1.14% to Rs 316.85 after the company said its board approved buyback of shares at a price of Rs 335 per share. The announcement was made after market hours yesterday, 11 July 2016. Coal India announced that its board of directors at a meeting held yesterday, 11 July 2016, approved the buyback of equity shares not exceeding 10.89 crore shares of the company, from all the shareholders holding equity shares of the company as on record date on a proportionate basis through the tender offer route. The buyback price was fixed at Rs 335 per share payable in cash for an aggregate consideration not exceeding Rs 3650 crore which is not exceeding 25% of the aggregate fully paid up share capital and free reserves of the company as per audited accounts of the company for the financial year ended 31 March 2016.

Maruti Suzuki India advanced 2.27% as Japanese yen eased against the dollar. A weak yen lifts Maruti's operating profit margin. Maruti pays royalty to its Japanese parent Suzuki Motor Corporation in yen terms for some of its earlier models. Maruti has reportedly started paying royalty to its Japanese parent in rupee terms on all new models from 1 April 2016. Maruti also has an exposure to the yen to the extent it imports raw materials from Japan.

Index heavyweight and housing finance major HDFC rose 1.5% after the company announced after market hours yesterday, 11 July 2016 that it will issue its first unrated synthetic rupee denominated Notes aggregating Rs 2000 crore with an option to retain oversubscription of upto Rs 1000 crore. The bonds will bear a fixed coupon and will have a tenor of 3 years and 1 month. The company proposes to list the Notes on the London Stock Exchange. Pricing will take place on or before 15 July 2016, subject to market conditions. The settlement shall be in the next week.

Stocks of companies involved in oil exploration & production activities rose as global crude oil prices edged higher. Cairn India (up 8.33%), Reliance Industries (RIL) (up 1.15%), ONGC (up 1.2%) and Oil India (up 0.7%) gained. Higher crude oil prices will result in higher realization from crude sales for oil exploration firms.

Shares of public sector oil marketing companies (PSU OMCs) declined as crude oil prices gained. BPCL (down 1.1%) and Indian Oil Corporation (IOCL) (down 0.23%) declined. HPCL rose 0.9%. Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.

In the global commodities markets, Brent for September settlement was currently up 92 cents at $47.17 a barrel. The contract had declined 51 cents or 1.09% to settle at $46.25 a barrel during the previous trading session.

Key indices gained for the second day in a row today, 12 July 2016. The Sensex has risen 681.24 points or 2.51% in two sessions, from a closing high of 27,126.90 on 8 July 2016. The Sensex has risen 808.42 points or 2.99% in this month so far (till 12 July 2016). The Sensex has risen 1,690.60 points or 6.47% in calendar year 2016 so far (till 12 July 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 5,313.53 points or 23.62%. The Sensex is off 770.19 points or 2.69% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 2,216.60 points or 7.38% from a record high of 30,024.74 hit on 4 March 2015.

No comments: