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Markets continue to rally for the third straight session led by a spectacular rally in shares of Reliance Industries after Mukesh Ambani decided to invest of over Rs 250,000 crore in the digital space, including rollout of wireless broadband infrastructure and manufacturing of mobile handsets.
At 12.05 PM, the Sensex was at 28,082, higher by 61 points and the Nifty was at 8,473, up 20 points. The broader markets are outperforming the larger peers. BSE Midcap and Smallcap indices are trading higher by 1% each.
Meanwhile, a slew of positive factors including rebound in the growth of India’s core sector, hopes of Greece deal and advancement of monsoons contributed to the rise on the Sensex. Also, strength among the Asian peers lifted the mood of the investors.
MARKETS & ECONOMY
The growth in eight core sectors increased to 4.4% in May versus a decline of 0.4% in the month of April. The growth was recorded after two consecutive months of decline, thus indicating a recovery in the industrial output. Some support also came after India Meteorological Department (IMD) reported better than normal monsoon figure in the month of June.
"The outlook for inflation has improved in recent weeks, thanks to the strong start to monsoon season. Rains have been 16% above normal in June, resulting in an improvement in sowing patterns for major crops (pulses and oilseeds). While authorities still warn of weak rainfall in July, a crucial month in the season, the good start has improved reservoir levels which are likely to aid agricultural production," said Pranjul Bhandari, chief India economist at HSBC.
"The fall in both PMI input prices and prices charged is a positive indication and coupled with the strong start to monsoons, should provide the RBI more comfort around its 6% CPI target of January 2016," he adds.
Analysts say that the recent rebound in markets despite global uncertainty clearly depicts participants giving more weightage to domestic cues as expected.
"It’s too early to say that the scenario would prevail if global volatility increases in days to come. Hence, we reiterate our advice to maintain positive yet cautious approach as Nifty has almost reached near to crucial hurdle of 8,500 mark and sustainability above the same will trigger fresh upside momentum, otherwise profit taking will resume," said Jayant Manglik, President, Retail Distribution, Religare Securities in a note.
STOCKS ON THE RADAR
On the sectoral front, barring BSE IT, Metal and Consumer Durables all other indices are trading firm. BSE Auto, Oil& Gas and Realty indices are leading the rally up 1% each.
A stellar performance by the auto shares is evident across the bourses post the release of June auto sale numbers. M&M, Bajaj Auto, Hero Motocorp, Maruti Suzuki are trading higher up to 2.6%.
Telecom major Bharti Airtel is set to launch full mobile number portability (MNP) from tomorrow, which will allow customers to retain their numbers across the country. The stock is trading higher by 1.4%.
Coal India fell 1% after the company and its subsidiaries on provisional basis achieved 95% of targeted production at 38.83 million tonnes in June 2015.
The technology pack is taking a beating in today’s trade as the Greece contagion which is expected to impact all of Europe will impact the IT sector the most. Meanwhile, global technology spending is set to witness a steeper drop this year, according to reports. TCS, Wipro and Infosys are trading lower between 0.1-0.6%.
FMCG majors ITC and HUL are witnessing buying in today’s session on the back of progress of monsoons. Meanwhile, slash in the global commodity prices have improved sentiments. ITC, HUL are up between 0.5-1%.
OMCs are gaining across the exchange with the three listed companies – Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOC) trading at their respective 52-week highs on expectations of higher earnings growth going ahead.
IOC has rallied nearly 6% to Rs 413, while HPCL has surged 4% to Rs 771 and BPCL has gained 2% at Rs 907 on the Bombay Stock Exchange (BSE). BPCL and HPCL are quoting at their record highs on the BSE.
Shares of Nestle India are trading higher by 2.5% after the Bombay High Court on Tuesday allowed Nestle India to export Maggi noodles. However, it did not lift the ban on its local sales.
The market breadth is strong on the BSE with 1,496 advances versus 797 declines.
