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The markets ended at the day's highs, with the Sensex climbing back above the psychologically important 28,000 mark and Nifty reclaiming the 8,500 mark, aided by the largely positive cues from the Asian front.
The hopes of a rate cut by the Reserve Bank of India (RBI) at its next monetary policy review meet due next month and a possible decline in oil prices in the aftermath of the historic nuclear deal between Iran and global powers seem to have further bolstered the sentiment on Dalal Street.
In a reversal of the trend seen in the past, the benchmark indices outperformed the broader markets. The Sensex ended at 28,198, up 265 points or 0.9% and Nifty closed at 8,523, higher by 69 points.
"Iran nuclear deal has certainly lifted the spirits of global markets, except for China which continues to see aftershocks from the recent stock market crash. The tepid reaction to the 7% GDP figure is also suggestive that its stock market may be less responsive economic signals for the short term, while it expects measures from the government," said Anand James, co-head of technical research desk at Geojit BNP Paribas in a post market note.
"Meanwhile, Fed rate prospects are likely to assume more significance as improved prospects for financial crisis resolution in the Euro area as well as improved global growth as an outcome of Iran nuclear deal, also improve growth prospects of US. However, signals from US economic data remains less suggestive to that end, and Fed Chair’s testimony could be closely followed ahead of RBI’s rate announcement scheduled next month," he adds.
On the other hand, the midcap index surrendered its intra-day gains to end at 11,051 and the smallcap index settled at 11,593, up 0.6%. The market breadth was strong. Out of 2,963 stocks traded on the BSE, there are 1,539 advancing stocks as against 1,280 declines.
Investors would be keenly watching at the US Fed Chief Janet Yellen's two-day testimony before the US Congress and voting on reform measures by the Greek parliament, both scheduled later in the day.
RUPEE
The rupee has strengthened by 4 paise to 63.35 against the US dollar in early trade today at the Interbank Foreign Exchange on selling of the dollar by exporters. A fall in dollar against major world currencies globally helped strengthen the domestic currency, dealers said.
OIL
Oil prices rose in Asia on easing concerns about the impact of Iranian supplies on the global market following the country's historic nuclear deal. US benchmark West Texas Intermediate for August delivery rose 26 cents to USD 53.29 and Brent crude for August climbed 10 cents to USD 58.61 a barrel. Oil prices had sunk on Tuesday after the deal between Iran and major world powers led to fears that supply from Iran would add to the glut in global oil markets.
GLOBAL MARKETS
The Nikkei index edged up 0.38% to 20,463 and Seoul gained 0.6% to end at 2,072. The Straits Times, Seoul and Se Composite indices also eked modest gains. However, the Shanghai sank 3%, as the stock market recovery that began in China last week after a slew of government steps to halt a crash ran abruptly out of steam on Wednesday; and the Hang Seng lost 0.3%. The European markets were however subdued ahead of crucial Greek parliament vote that will decide whether Greece will agree to the fresh terms and conditions set by its creditors for a bailout.
SECTORS & STOCKS
All the sectoral indices settled in the green, with the IT and auto indices ending with gains of more than 1%. IT shares had a strong session on hopes of order inflows from Europe post the Greek bailout deal. Wipro, TCS and Infosys gained 1-2% each.
Auto stocks also saw buying interest. Maruti Suzuki surged nearly 3% to a life-time high of Rs 4158, extending its nearly 3% gains in the past two trading sessions on the BSE, on expectations of strong financial results for the quarter ended June 30, 2015 (Q1). Tata Motors also bounced back in this session due to value buying; the stock had touched fresh 52-week lows in the previous session on concerns about a slowdown in China.
Tata Steel and SBI were the only Sensex-30 stocks to end in the red, albeit only marginally.
RESULT IMPACT
DCB Bank dipped 5.8% to Rs 133, extending its previous day’s 3.8% fall on the BSE, as asset quality of the bank worsened in April-June 2015 (Q1FY16) quarter. The bank’s gross non-performing assets (NPA) rose to 1.96% in June quarter from 1.76% in March quarter and 1.78% in the year-ago period.
Zee Entertainment edged higher by 0.3% at Rs 376, albeit nearly 2% below its intra-day highs on the BSE, after the company said that operating profit margins for the June quarter stood at 23.2%. It was 29.29% in the previous year's corresponding quarter.
Zensar Technologies has moved higher by 8.2% to Rs 744 after reporting a strong 36% year-on-year (yoy) jump in its consolidated net profit at Rs 76 crore for the quarter ended June 30, 2015 (Q1), on the back of higher other income.
Cera Sanitaryware surged 14% to Rs 2,146 on the BSE after the company reported a standalone net profit of Rs 15.67 crore for the quarter ended June 30, 2015 (Q1), in line with an analyst estimates. The company had profit of Rs 13.63 crore in the same quarter, year ago.
