Banking, auto sector stocks and index heavyweights HDFC, ITC and Infosys led rally for the two key benchmark indices triggered by firm global stocks. The Sensex rose 505.11 points or 1.86% at 27,632.01, as per the provisional closing data. The gains for the Nifty 50 index were lower than those for the Sensex in percentage terms. The Nifty gained 144.70 points or 1.74% at 8,467.90, as per the provisional closing data. The Sensex and the Nifty, both, struck their highest level in almost 11 months as these two key benchmark indices extended gains in late trade.
The Sensex and the Nifty hovered in positive zone throughout the trading session after opening with upward gap. All the nineteen sectoral indices on BSE registered gains.
World stocks edged higher as stronger-than-expected US jobs report suggested that the US economic recovery was back on track. Global markets were also boosted by the election in Japan over the weekend. With continued uncertainty over the fallout of the UK's Brexit vote and low inflation in the United States, the solid US employment data for June 2016, however, isn't seen prompting hike in interest rates from the US Federal Reserve any time soon. The Fed funds futures market data showed that investors are not pricing in a rate increase from the US Federal Reserve in calendar year 2016 despite the strong jobs report for June 2016. The Fed has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015. A delay in interest rate increases from the Fed would slow capital flight from emerging markets.
Japanese stocks surged as investors saw weekend poll results for Japan's upper house as signaling new rounds of economic and political reforms by the coalition government led by Prime Minister Shinzo Abe. The Nikkei 225 Average closed 3.98% higher. In the upper house elections held yesterday, 10 July 2016, Abe's ruling coalition led by his Liberal Democratic Party won a landslide victory, making it far easier for Abe to push through his economic agenda dubbed Abenomics.
The Sensex jumped 520.58 points or 1.92% at the day's high of 27,647.48 in late trade, its highest level since 20 August 2015. The barometer index rose 231.33 points or 0.85% at the day's low of 27,358.23 in opening trade. The Nifty jumped 152.05 points or 1.83% at the day's high of 8,475.25 in late trade, its highest level since 20 August 2015. The index rose 83.85 points or 1.01% at the day's low of 8,407.05 at onset of trading session.
The market breadth indicating the overall health of the market was strong. On BSE, 1,711 shares gained and 1,051 shares fell. A total of 183 shares were unchanged. The BSE Mid-Cap index was provisionally up 1.49%. The BSE Small-Cap index was provisionally up 0.79%. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 3270 crore, higher than turnover of Rs 3131.31 crore registered during the previous trading session.
IndusInd Bank slipped in volatile trade after announcing Q1 June 2016 results. The stock fell 0.11% to Rs 1,125.50. The stock hit high of Rs 1,147.50 in intraday trade which is a record high for the counter. The stock hit low of Rs 1,115.50 in intraday trade. The bank's net profit rose 25.96% to Rs 661.38 crore on 22.36% growth in total income to Rs 4264.66 crore in Q1 June 2016 over Q1 June 2015.
IndusInd Bank's gross non-performing assets (NPA) stood at Rs 860.64 crore as on 30 June 2016 compared with Rs 776.82 crore as on 31 March 2016 and Rs 570.12 crore as on 30 June 2015. The ratio of gross NPA to gross advances stood at 0.91% as on 30 June 2016 compared with 0.87% as on 31 March 2016 and 0.79% as on 30 June 2015. The ratio of net NPA to net advances stood at 0.38% as on 30 June 2016 as against 0.36% as on 31 March 2016 and 0.31% as on 30 June 2015.
The bank's provisions and contingencies rose 86.87% to Rs 230.47 crore in Q1 June 2016 over Q1 June 2015.
Punjab National Bank jumped 9.27% after the Reserve Bank of India (RBI) after trading hours on Friday, 8 July 2016, notified that the aggregate foreign shareholding in the state-run has gone below the prescribed threshold caution limit stipulated under the extant foreign direct investment (FDI) policy. Hence, the restrictions placed on the purchase of shares of PNB are withdrawn with immediate effect.
Tata Motors surged 3.93% after the company reported a 21% rise in its global wholesales at 92,551 units in June 2016 over June 2015. The company announced the sales volume data after market hours on Friday, 8 July 2016. Global wholesales of all Tata Motors' commercial vehicles and Tata Daewoo range rose 5% to 32,720 units in June 2016 over June 2015. Global wholesales of all passenger vehicles surged 31% to 59,831 units in June 2016 over June 2015.
Sun Pharmaceutical Industries rose 1.66% after the company announced the launch of Gemcitabine InfuSMART Ready-To-Administer in oncology therapy in Europe. InfuSMART is a technology in which oncology products are developed in a Ready-To-Administer (RTA) bag. With the roll-out of Gemcitabine InfuSMART, Sun Pharma becomes world's first pharmaceutical company to manufacture and launch a licensed RTA oncology product. This innovatively differentiated product will have a shelf life of two years. Over the next few months, Sun Pharmaceutical Industries will launch Gemcitabine lnfuSMART across Netherlands, UK, Spain, Germany, Italy and France.
Sun Pharma said it will introduce additional InfuSMART oncology products in the future.
Meanwhile, as per the monthly data released by the Association of Mutual Funds in India (AMFI), equity mutual fund schemes including tax saving equity schemes known as Equity Linked Saving Schemes (ELSS) received net inflow of Rs 320 crore in June 2016. The inflow would have been much higher if one excludes large redemption of arbitrage funds. Media reports suggest that there was redemption of Rs 3500 crore from arbitrage funds in June 2016. AMFI does not give separate data on arbitrage funds. It clubs arbitrage funds under the equity fund category. Meanwhile, balanced funds received net inflow of Rs 2402 crore in June 2016. Balanced funds typically have 65-70% of their portfolio invested in equities and 30-35% in debt.
In overseas stock markets, US stocks edged higher during the previous trading session on Friday, 8 July 2016, as strong June employment report bolstered investor sentiment on the strength of the economy. US employers in June added a seasonally adjusted 287,000 jobs, the strongest month of hiring since last October, according to the Labor Department report. That was a sharp rebound from May, when hiring sagged to 11,000, the weakest reading since the economy stopped shedding jobs in 2010. The unemployment rate rose to 4.9% from 4.7%, suggesting that more people entered the labor force, given the better-than-expected headline number.
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