Market Wrap Podcast, July 5: Here's all that happened in the markets today

Market bulls were back on Dalal Street on Monday, after a volatile week, as an across-the-board buying kept benchmarks parked near day's high levels. Bucking the muted trend in the global markets, the Indian market rose over half a per cent higher amid strong gains in realty, banking, metals, and fertiliser stocks. 

Among the frontline indices, the S&P BSE Sensex hit an intra-day high of 52,919 before settling at 52,880 levels, up 395 points or 0.75 per cent. On the NSE, the Nifty50 index gained 115 points, or 0.71 per cent, to close at 15,834 levels. 

Hindalco, ONGC, SBI, Tata Steel, Coal India, Eicher Motors, L&T, Bajaj twins, Axis Bank, Divis Labs, HDFC Bank, ICICI Bank, M&M, RIL, and Infosys gained upwards of 1 per cent each while Tech M, HDFC Life, BPCL, Dr Reddy's Labs, HCL Tech, and Britannia Industries ended as the top laggards.

That apart, in the broader markets, the BSE SmallCap index scaled fresh record peak of 25,809 in the intra-day trade but eased mildly to close at 25,790 levels, up 0.87 per cent. Individually, about 32 stocks including Route Mobile, TTK Prestige, Tata Elxsi, Tata Coffee, Tata Communications, PNC Infratech, CCL Products, Action Construction Equipment, Dollar Industries and JK Paper hit their respective record highs today. 

Of these, six stocks -- Shree Renuka Sugar, Brightcom Group, Rattanindia Power, Ramky Infrastructure, Globus Spirits and Khadim India -- have seen their market price more-than-double in the past one month.

In the MidCap space, the index ended 0.35 per cent higher at 22,585 levels.

Among individual stocks, shares of India Pesticides Ltd made a strong debut on the bourses as they got listed at Rs 360, commanding a 22 per cent premium over the issue price of Rs 296 on the BSE. Post listing, the stock extended its gains and moved higher to Rs 368, a 24 per cent jump against its issue price. The shares, however, witnessed mild profit booking at higher levels and closed at Rs 342 apiece on the BSE.

Shares of CSB Bank, meanwhile, hit a record high of Rs 372.95, up 7 per cent on the BSE in intra-day trade on Monday after the lender said its total deposits increased 14.17 per cent year-on-year (YoY) to Rs 18,653 crore as of June 30, 2021 from Rs 16,338 crore in the same period last year. On a quarter-on-quarter (QoQ) basis, the total deposits declined 2.5 per cent from Rs 19,140 crore as of March 31, 2021 (Q4FY21). 

Global markets

World stocks clung close to record highs on Monday as worries about the Delta variant of Covid-19 offset positive sentiment from surging euro zone business activity and a welcome US jobs report.

The STOXX index of 600 leading European companies was flat, reversing earlier losses after data showed euro zone businesses expanded activity at the fastest rate in 15 years in June.

Activity for British services firms also soared in June, albeit at a slightly slower rate.

French shares, however, sank 0.4 per cent as the government warned against a possible fourth wave of the pandemic due to the highly transmissible Delta variant. 

Covid-19 angst also weighed on Japan shares, with the Nikkei falling 0.6 per cent, to a two-week low, following a surge in infections in Tokyo. MSCI’s broadest index of Asia-Pacific shares outside Japan, was flat. China’s blue chip stock index recovered from earlier losses to close 0.1 per cent higher.

Top news of the day:

>> Valuation of Indian stock market at 22.5 times fiscal 2021-22 (FY22) earnings is too demanding, said analysts at Nomura in their 2021 Asia economic, currencies & equities mid-year outlook call on Monday. Within the region, they expect north Asian markets, particularly China and Japan, to do well in the remaining part of calendar year 2021 (H2-CY21). 

Besides Nomura, other research and broking houses, such as HSBC, Jefferies and Motilal Oswal Securities, have also cautioned against the rich valuation of Indian equities.

>> In the primary market, the Securities and Exchange Board of India (Sebi) has formally approved food delivery company Zomato's application for an initial public offering (IPO), paving the way for one of the most keenly awaited share sales in recent history, media reports suggest. Zomato, backed by China’s Ant Group, filed for the IPO in April and is said to be looking to raise up to $1.2 billion.

>> Lastly, the data on the economic front seems to be suggesting a faltering growth in Asian countries. Domestically, activity in India's dominant services sector contracted sharply in June as tighter restrictions to contain a resurgence of coronavirus cases hammered demand and forced firms to shed jobs at a rapid clip. IHS Markit's Services Purchasing Managers' Index plunged to 41.2 last month from an already depressed 46.4 in May. That was its lowest reading since July 2020 and well below the 50-level separating growth from contraction.

Globally, growth in China’s services sector slowed sharply in June to a 14-month low, weighed down by a resurgence of Covid-19 cases in southern China. The Caixin/Markit services Purchasing Managers’ Index (PMI) fell to 50.3 in June, the lowest since April 2020 and down significantly from 55.1 in May.

In Japan, the services sector activity shrank for the 17th straight month in June. The final Japan Services Purchasing Managers' Index (PMI) was at a seasonally adjusted 48.0, up from the prior month's final level of 46.5.