A pick up in monsoon rains during the weekend helped Indian stocks extend their winning streak. The barometer index, the S&P BSE Sensex, rose 133.85 points or 0.49% to settle at 27,278.76. The Nifty 50 index rose 42.35 points or 0.51% to settle at 8,370.70. The Sensex and the Nifty edged higher for the six straight trading session. The Nifty hit its highest closing level in more than ten months. The Sensex hit its highest closing level in more than eight months. With the lone exception of the BSE FMCG index, all the other sectoral indices on BSE registered gains. Gains in Asian stocks also aided the upmove on the domestic bourses. The Sensex and the Nifty hovered in positive zone throughout the trading session after opening with upward gap.
The market sentiment was positive after pick up of 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.
Aviation stocks rose after the government announced draft regional connectivity scheme to promote regional air connectivity. Bajaj Auto fell after the company reported decline in sales in June 2016. Tata Motors rose after the company reported increase in sales in June 2016. Tata Steel rose after the company on provisional basis reported increase in saleable steel production in Q1 June 2016. Bosch edged lower after the company's board of directors approved buyback of equity shares at a price close to the ruling market price. Adani Ports and Special Economic Zone rose after the company's announcement that it is considering the acquisition of TM Harbour Services.
State Bank of India (SBI) edged higher after the state-run bank announced that it has sold 5% stake in National Stock Exchange of India (NSE) for Rs 911.25 crore. Reliance Industries edged higher after the company and SBI signed shareholders' agreement for setting up payments bank. L&T extended gains registered during the previous trading session triggered by media reports that the company has secured an order worth Rs 4500 crore from the defence ministry for the supply of 100 new mobile artillery guns.
In overseas stock markets, Chinese stocks led gains in Asian equities as expectations increased that global central banks would introduce easing measures to encourage economic growth in the aftermath of 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. Investors are betting that the US Federal Reserve will delay interest rate increases in the wake of the Brexit. A delay in interest rate increases from the Fed would slow capital flight from emerging markets. 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.
The Sensex rose 133.85 points or 0.49% to settle at 27,278.76, its highest closing level since 26 October 2015. The index jumped 240.75 points or 0.88% at the day's high of 27,385.66. The index rose 106.15 points or 0.39% at the day's low of 27,251.06.
The Nifty rose 42.35 points or 0.51% to settle at 8,370.70, its highest closing level since 20 August 2015. The index rose 70.10 points or 0.84% at the day's high of 8,398.45. The index rose 36.35 points or 0.43% at the day's low of 8,364.70.
The BSE Mid-Cap index rose 0.58%. The BSE Small-Cap index rose 1.01%. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,719 shares rose and 1,020 shares declined. A total of 146 shares were unchanged.
The total turnover on BSE amounted to Rs 3009.91 crore, lower than turnover of Rs 3336.56 crore registered during the previous trading session.
With the lone exception of the BSE FMCG index, all the other sectoral indices on BSE registered gains. The S&P BSE Energy index (up 1.67%), the BSE Telecom index (up 1.16%), the BSE Bankex index (up 0.6%), the BSE Capital Goods index (up 1.26%), the BSE Metal index (up 1.67%), the BSE Oil & Gas index (up 1.56%) and the BSE Realty index (up 2.2%) outperformed the Sensex. The BSE FMCG index (down 1.32%) and the BSE Consumer Durables index (up 0.45%) underperformed the Sensex.
Stocks of PSU banks surged. Syndicate Bank (up 5.86%), Corporation Bank (up 4.85%), Punjab National Bank (up 7.13%), Bank of India (up 4.89%), Indian Bank (up 7.06%), IDBI Bank (up 6.06%), Union Bank of India (up 2.35%), Canara Bank (up 3.32%) and Bank of Baroda (up 2.08%) edged higher.
State Bank of India (SBI) rose 1.46% at Rs 222.85 after the state-run bank announced that it has sold 5% stake in National Stock Exchange of India (NSE) for Rs 911.25 crore. SBI sold 5% stake in National Stock Exchange of India (NSE) to Mauritius-based foreign institutional investor Veracity Investments at Rs 4,050 per share. Post this transaction, SBI holds 5.19% stake in NSE while its subsidiary SBI Capital Markets holds another 4.33% in the NSE.
Meanwhile, SBI and Reliance Industries (RIL) signed shareholders' agreement on 30 June 2016 for setting up payments bank. RIL will hold a majority 70% stake and SBI as joint venture partner will hold 30% equity stake in the proposed payments bank. All requisite regulatory and statutory approvals will now be sought for operationalizing the payments bank.
Shares of index heavyweight RIL gained 1.34% at Rs 986.65.
Stocks of private sector banks declined. Kotak Mahindra Bank (down 1.27%), IndusInd Bank (down 1.54%) and Yes Bank (down 0.94%) edged lower. ICICI Bank (up 2.97%) and Axis Bank (up 0.2%) edged higher.
Index heavyweight HDFC Bank was down 0.2% at Rs 1,171.50. The stock hit a high of Rs 1,178.75 and a low of Rs 1,169.25 in intraday trade.
Index heavyweight and housing finance major HDFC rose 0.63% at Rs 1,252.45. The stock hit a high of Rs 1,265.20 and a low of Rs 1,247.50 in intraday trade.
Stocks of public sector companies edged higher for the second day in a row. Power Finance Corporation (up 2.93%), Rural Electrification Corporation (up 1.48%), Steel Authority of India (up 1.41%), GAIL India (up 0.34%), Bharat Heavy Electricals (up 4.66%), Bharat Electronics (up 0.61%) and BEML (2.62%) edged higher.
Aviation stocks rose after the government announced draft regional connectivity scheme to promote regional air connectivity. InterGlobe Aviation (up 3.65%), Jet Airways India (up 4.26%) and SpiceJet (up 3.49%), edged higher. To operationalise the Regional Air Connectivity Scheme (RCS), aircraft and helicopter operators would be required to assess the demand on various routes and submit their proposal for providing connectivity on such routes. They would be required to earmark certain number of seats on every flight for the RCS. The fare for such seats would be capped based on flight distance and time. An index has also been prepared for airfare caps for the RCS seats for fixed wing aircrafts and helicopters depending upon the distance.
Airport Authority of India (AAI) will be the implementing agency for the scheme. The RCS route will have to include un-served airports i.e. airports where there is no scheduled commercial flight or under-served airports i.e. airports which have 7 or less scheduled commercial flights per week. The RCS routes would cover a length between 200 to 800 kilometre. This criteria will not apply to hilly areas, islands, North-east region and for helicopter operations.
The procedure for selecting airline operators would be based on reverse bidding mechanism. The selected airlines would be expected to commit 50% of the seats on RCS flights to be sold at the specified airfare cap. They would also be required to maintain a frequency of minimum, three flights per week and maximum seven flights per week. A Regional Connectivity Fund would be created to subsidise the operation of the RCS.
The central government will support the RCS scheme by levying an excise duty of only 2% on aviation turbine fuel (ATF) purchased at RCS airports for a period of three years. The service tax will be levied at only 10% of the taxable value of tickets for RCS seats for a period of one year. The operating airline will be free to enter into code sharing arrangement with domestic and international airlines.
The concerned state governments will charge value added tax (Vat) of 1% or less on ATF at RCS airports for a period of 10 years. It will also provide security and fire services free of cost, besides providing electricity, water and other utility services at concessional rates.
The draft RCS will be placed in public domain for three weeks to enable stakeholders to give their suggestions. After this the details of the scheme would be finalized.
Maruti Suzuki India declined 0.09% at Rs 4,161.95 after the company said that its production fell 4.53% to 90,262 units in June 2016 over June 2015. The announcement was made during market hours today, 4 July 2016. The company at the time of announcement of sales figures for June on 1 July 2016 had said that that there was a disruption in production during June, due to the unfortunate incident of fire at Subros, a key vendor of the company. The company expects to recover the production loss during the course of the year.
Bajaj Auto fell 0.68% at Rs 2,650.85 after the company reported 4% decline in total sales to 3.16 lakh units in June 2016 over June 2015. Bajaj Auto's total motorcycles sales fell 5% to 2.73 lakh units in June 2016 over June 2015. Domestic motorcycles sales rose 9% to 1.68 lakh units in June 2016 over June 2015. Motorcycles exports fell 21% to 1.04 lakh units in June 2016 over June 2015.
Sales of commercial vehicles in the domestic market rose 22% to 25,092 units in June 2016 over June 2015. Exports of commercial vehicles fell 20% to 18,579 lakh units in June 2016 over June 2015.
Total sales of motorcycles and commercial vehicles in the domestic market rose 11% to 1.93 lakh units in June 2016 over June 2015. Combined exports of motorcycles and commercial vehicles fell 21% to 1.23 lakh units in June 2016 over June 2015. The company announced the monthly sales volume data during trading hours today, 4 July 2016.
Tata Motors rose 2.4% at Rs 468.90 after the company said that its total passenger and commercial vehicle sales rose 8% to 44,276 vehicles in June 2016 over June 2015. Tata Motors' domestic sales of Tata commercial and passenger vehicles rose 8% to 38,673 units in June 2016 over June 2015. Passenger vehicles sales in the domestic market grew 22% to 12,509 units in June 2016 over June 2015. Sales of passenger cars rose by 37% to 11,705 units in June 2016 over June 2015. The growth in passenger cars was driven by strong demand for the recently launched Tiago hatchback.
Sales of Tata Motors Light Commercial Vehicles (LCVs) rose 14% to 16,017 units in June 2016 over June 2015. Medium & Heavy Commercial Vehicles (M&HCV) sales fell 11% to 10,147 units in June 2016 over June 2015. The overall commercial vehicles sales in the domestic market rose 2% to 26,164 units in June 2016 over June 2015.
The company's total sales from exports rose 11% to 5,603 units in June 2016 over June 2015. The announcement was made after market hours on Friday, 1 July 2016.
Hero MotoCorp was down 0.05% at Rs 3,175. The company's motorcycle sales rose 1.32% to 5.49 lakh units in June 2016 over June 2015. Hero MotoCorp said it reported sales growth of 6.07% to 17.45 lakh units in Q1 June 2016 over Q1 June 2015 in spite of subdued rural demand. The company said it will soon introduce Splendor iSmart 110 motorcycle in the market - the first motorcycle to have been completely developed by the in-house research and development (R&D) team at Hero MotoCorp. The company further added that with the implementation of the 7th Pay Commission and the forecast of above average monsoon, it is optimistic about a pick-up in sales momentum.
Index heavyweight and cigarette major ITC fell 2.97% at Rs 244.85. The stock hit a high of Rs 256.90 and a low of Rs 244 in intraday trade.
Index heavyweight and software major Infosys rose 1.04% at Rs 1,184.25. The stock hit a high of Rs 1,194.80 and a low of Rs 1,176 in intraday trade.
Tata Steel was up 1.18% at Rs 331.20 after the company on provisional basis reported a 5.7% rise in saleable steel production at 2.356 million tonnes in Q1 June 2016 over Q1 June 2015. Hot metal production rose 16.4% to 3.012 million tonnes in Q1 June 2016 over Q1 June 2015. Crude steel production was up 7.7% to 2.525 million tonnes in Q1 June 2016 over Q1 June 2015. The announcement was made during market hours today, 4 July 2016.
L&T rose 1.59% at Rs 1,565.20, with the stock extending previous trading session's gains triggered by media reports that the company has secured an order worth Rs 4500 crore from the defence ministry for the supply of 100 new mobile artillery guns. The stock had risen 2.97% to settle at Rs 1,540.65 on Friday, 1 July 2016.
Coal India rose 2.37% at Rs 317.45 after the company and its subsidiaries on a provisional basis achieved 99% of targeted production at 42.72 million tonnes in June 2016. With respect to coal offtake, 95% of target was achieved for the month. The total offtake stood at 44.96 million tonnes in June 2016. The company announced the monthly coal production and offtake performance market hours on Friday, 1 July 2016.
Bosch lost 1.64% at Rs 22,231.85 after the company's board of directors approved buyback of equity shares at a price close to the ruling market price. The company's board has approved buyback of 8.78 lakh fully paid up equity shares, or 2.79% equity, at Rs 23,000 per share. The buyback price represents just 1.76% premium over the stock's closing price of Rs 22,603.30 on BSE on Friday, 1 July 2016. The buyback offer aggregates to Rs 2019.76 crore. Bosch's German parent Robert Bosch GmbH has decided to participate in the buyback offer. The foreign parent currently holds 71.18% stake (as per the shareholding pattern as on 31 March 2016).
The buyback is subject to approval of the shareholders through a postal ballot process.
Adani Ports and Special Economic Zone rose 4.23% at Rs 213.20 after the company's announcement that it is considering the acquisition of TM Harbour Services. TM Harbour Services is engaged solely in providing tug services to The Dhamra Port Company (DPCL), a wholly-owned subsidiary of Adani Ports and Special Economic Zone (APSEZ). Consequent to a successful acquisition by APSEZ, TM Harbour Services will help provide effective and efficient marine services to DPCL. The acquisition is subject to due diligence, final negotiations between the parties and obtaining of requisite regulatory approvals.
The Sensex and the Nifty edged higher for the six straight trading session. The Sensex has risen 881.05 points or 3.33% in six trading sessions from its close of 26,397.71 on 24 June 2016. The Sensex has risen 279.04 points or 1.03% during the first two trading sessions this month (till 4 July 2016). The Sensex has risen 1,161.22 points or 4.44% in calendar year 2016 so far (till 4 July 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 4,784.15 points or 21.26%. The Sensex is off 1,299.57 points or 4.54% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 2,745.98 points or 9.14% from a record high of 30,024.74 hit on 4 March 2015.
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