A bout of volatility was witnessed as key benchmark indices regained strength after trimming intraday gains in mid-afternoon trade. At 14:16 IST, the barometer index, the S&P BSE Sensex, was up 184.71 points or 0.62% at 27,314.55. The Nifty 50 index was currently up 55.85 points or 0.67% at 8,384.20. The market sentiment was positive after pick up of monsoon rains during the weekend. Gains in Asian stocks aided the upmove on the domestic bourses.
The Sensex rose 133.10 points or 0.49% at the day's low of 27,278.01 in mid-afternoon trade. The barometer index jumped 240.75 points or 0.88% at the day's high of 27,385.66 in early afternoon trade, its highest level since 26 October 2015. The Nifty rose 39.60 points or 0.47% at the day's low of 8,367.95 in mid-afternoon trade. The index rose 70.10 points or 0.84% at the day's high of 8,398.45 in early afternoon trade, its highest level since 20 August 2015.
The market sentiment was positive after pick up in monsoon rains during the weekend. The monsoon rains have reportedly covered nearly all of India except some parts of Gujarat and Rajasthan. Rainfall has picked up in central and northern India in the last few weeks, helping to narrow the rainfall deficit in the current season to 6%, sharply down from 18% in the first week of June. The India Meteorological Department (IMD) has forecast rains to be above normal in July and August 2016. The quantum of the rainfall and its spatial and temporal distribution are critical for the country's agriculture. Around 70% of the country's farmlands are rain-fed.
In overseas stock markets, European stocks edged lower in volatile trade. Chinese stocks led gains in Asian markets as expectations increased that global central banks might ease monetary policy following Britain's vote to leave the European Union (EU) last month. In mainland China, the Shanghai Composite ended 1.91% higher. In Hong Kong, the Hang Seng index settled 1.27% higher.
US stocks edged higher during the previous trading session on Friday, 1 July 2016, after better-than-expected manufacturing data and on fading worries about the Brexit, or British exit from the EU. US market will remain shut today, 4 July 2016, on account of Independence Day holiday.
Closer home, the market breadth indicating the overall health of the market was strong. On BSE, 1,699 shares rose and 932 shares declined. A total of 147 shares were unchanged. The BSE Mid-Cap index was currently up 0.75%. The BSE Small-Cap index was currently up 1.07%. Both these indices outperformed the Sensex.
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FMCG stocks were mixed. Tata Global Beverages (down 0.63%), Marico (down 0.86%), Hindustan Unilever (HUL) (down 0.49%), and Dabur India (down 1.14%) declined. Colgate Palmolive India (up 0.22%), Nestle India (up 0.56%), Britannia Industries (up 1.37%), Jyothy Laboratories (up 1.98%), Procter & Gamble Hygiene and Health Care (up 0.56%), GlaxoSmithkline Consumer Healthcare (up 0.93%), Godrej Consumer Products (up 0.39%), and Bajaj Corp (up 1.86%) gained.
Index heavyweight and cigarette maker ITC dropped 2.44%.
The BSE FMCG index had outperformed the market over the past one month till 1 July 2016, rising 5.33% compared with 1.61% rise in the Sensex. The index had also outperformed the market in past one quarter, rising 10.8% as against Sensex's 7.42% rise.
Shares of oil exploration & production firms rose along with gains in crude oil prices. ONGC (up 4.23%), Cairn India (up 2.53%), and Oil India (up 2.87%) gained. Higher crude oil prices would result in rise in realizations from crude sales for oil exploration firms.
Reliance Industries (RIL) gained 1.22% and State Bank of India (SBI) rose 1.64%. SBI and RIL signed shareholders' agreement on 30 June 2016 for setting up payments bank. The subscription and shareholders' agreement was signed by RIL as promoter with a 70% equity contribution and SBI as joint venture partner with 30% equity contribution on 30 June 2016. All requisite regulatory and statutory approvals will now be sought for operationalizing the payments bank. The announcement was made after market hours on Friday, 1 July 2016.
In global commodities markets, Brent crude oil futures edged higher following comments from the Saudi energy minister that the market was heading towards balance, although signs of slowing demand in Asia weighed. Brent for September settlement was up 16 cents at $50.51 a barrel. The contract had rose 64 cents or 1.28% to settle at $50.35 a barrel during previous trading session.
State-run oil marketing companies (PSU OMCs) rose. HPCL (up 1.46%) and Indian Oil Corporation (IOCL) (up 1.19%) rose. BPCL rose 1.25% to Rs 1,105 after hitting record high of Rs 1,110.60 in intraday trade.
The BSE Oil & Gas index had outperformed the market over the past one month till 1 July 2016, rising 7.2% compared with 1.61% rise in the Sensex. The index had also outperformed the market in past one quarter, rising 10.41% as against Sensex's 7.42% rise.
TeamLease Services rose 3.13% after the company announced during trading hours today, 4 July 2016, that it will acquire ASAP Info Systems for an enterprise value of Rs 67 crore through its wholly-owned subsidiary, TeamLease Staffing Services. The transaction, which will be immediately accretive to TeamLease's earnings per share, will be financed with existing financial resources and is expected to close before the end of August 2016. The transaction remains subject to customary closing conditions and regulatory approvals.
Bangalore headquartered ASAP Info Systems realized revenue of approximately Rs 63 crore with earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately Rs 11 crore in the financial year ended March 2016 (FY2016). ASAP Info Systems offers IT staffing solutions to various MNCs and domestic companies with over 1,000 associates and 171 core employees as of date. ASAP is a Tier 1 staffing provider to reputed MNCs. ASAP Info Systems operates through its offices across India, Bangalore being its corporate office and has branches across Chennai, Hyderabad, Gurgaon and Pune.
TeamLease said it has long serviced IT companies for non-IT staffing positions and expects ASAP to help continue expansion in the space after merging its current offices.
FDC rose 5.5% after the company said that inspection of the company's manufacturing unit situated at Waluj, Maharashtra, by US Food and Drug Administration (USFDA) has been completed on 1 July 2016. The USFDA has made two minor observations for which appropriate steps shall be taken by the company, FDC said. The audit was carried out in relation to current good manufacturing practice (cGMP) inspection and abbreviated new drug application (ANDA) filed by the company for product Dorzolamide Ophthalmic Solution. FDC said that the company has also received the establishment inspection report (EIR) from USFDA for its manufacturing unit situated at Baddi, Himachal Pradesh with "No observations". This approval confirms the closure of inspection conducted in February 2016, the company said. The audit was carried out in relation to cGMP inspection and ANDA filed by the company for product Cefixime 400 mg tablet, it added. The announcement was made on Saturday, 2 July 2016.
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