Gains in European stocks triggered by a pair of opinion polls predicting that British voters will vote for Britain to remain in the European Union in a landmark referendum aided the upmove on the domestic bourses. The barometer index, the S&P BSE Sensex, gained 236.57 points or 0.88% to settle at 27,002.22. The Nifty 50 index rose 66.75 points or 0.81% to settle at 8,270.45. The Sensex regained the psychologically important 27,000 mark. Banking stocks and index heavyweights ITC and Infosys led the gains for the two key benchmark indices. The Sensex and the Nifty, both, attained their highest closing level in more than two weeks.
Tata Motors and Tata Steel edged higher after a pair of opinion polls released yesterday, 22 June 2016, ahead of the Brexit referendum on European Union membership suggested the remain camp is gaining momentum. Sun Pharmaceutical Industries moved higher ahead of the company's board meeting today, 23 June 2016, for evaluating a proposal of buyback of equity shares of the company. Lupin nudged higher after the company received final approval from the United States Food and Drug Administration (FDA) to market a generic version of Amneal Pharmaceuticals' Activella Tablets.
Jain Irrigation Systems surged on reports that a foreign brokerage has upgraded its rating on the stock to overweight from equal-weight on robust earnings growth forecast. KEC International moved higher after the company's announcement that it has secured new orders worth Rs 1036 crore.
In overseas stock markets, European stocks edged higher after a pair of opinion polls released yesterday, 22 June 2016, ahead of the Brexit referendum on European Union membership suggested the remain camp is gaining momentum. In UK, the FTSE 100 was currently up 1.5%. Voting began in the landmark British referendum to determine whether the UK remains a member of the European Union (EU) dubbed "Brexit". Voting in the referendum will close at 10 p.m. London time. Referendum results from the first counting areas are expected around 12:30 a.m. London time on Friday, 24 June 2016.
Trading in US index futures indicated that the Dow Jones Industrial Average could jump 168 points at the opening bell today, 23 June 2016. US stocks finished slightly lower yesterday, 22 June 2016, as opinion polls showed the outcome of a UK referendum on whether to leave the European Union remained too close to call. If the UK votes to leave the EU, it could send British pound and euro tumbling, with ripple effects across global asset classes.
Earlier during the global day, Asian stocks ended on a mixed note. Japanese stocks edged higher as the yen weakened against the dollar after the latest opinion polls ahead of the Brexit referendum on European Union membership suggested the remain camp is gaining momentum. The Nikkei 225 Average ended 1.07% higher. A weaker local currency benefits exporters, as they can sell their goods at more competitive prices overseas.
Closer home, the Reserve Bank of India (RBI) has assured liquidity support to ensure orderly conditions in financial markets if the Brexit poll outcome causes turbulence in global financial markets. The RBI said a statement issued yesterday, 22 June 2016, that it is maintaining a close vigil on developments, and will take all necessary steps, including liquidity support, to ensure orderly conditions in financial markets.
The Sensex gained 236.57 points or 0.88% to settle at 27,002.22, its highest closing level since 8 June 2016. The index jumped 295.33 points, or 1.10% at the day's high of 27,060.98. The index fell 29.13 points, or 0.11% at the day's low of 26,736.52.
The Nifty 50 index rose 66.75 points or 0.81% to settle at 8,270.45, its highest closing level since 8 June 2016. The index rose 81.90 points, or 1% at the day's high of 8,285.60. The index fell 15.50 points, or 0.19% at the day's low of 8,188.30.
The market breadth indicating the overall health of the market was negative. On BSE, 1,491 shares fell and 1,102 shares rose. A total of 182 shares were unchanged. The BSE Mid-Cap index rose 0.27%. The BSE Small-Cap index fell 0.04%. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 2278 crore, lower than turnover of Rs 2383.96 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Bankex (up 1.61%), the S&P BSE Auto index (up 1.09%) and the S&P BSE Finance index (up 1.08%) outperformed the Sensex. The S&P BSE Industrials index (up 0.83%), the S&P BSE Healthcare index (up 0.73%), the S&P BSE Oil & Gas index (up 0.65%), the S&P BSE FMCG index (up 0.65%), the S&P BSE Consumer Durables index (up 0.52%), the S&P BSE Metal index (up 0.43%), the S&P BSE Capital Goods index (up 0.43%), the S&P BSE Energy index (up 0.39%), the S&P BSE Basic Materials index (up 0.29%), the S&P BSE IT index (up 0.27%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.17%), the S&P BSE Teck index (up 0.13%), the S&P BSE Power index (down 0.49%), the S&P BSE Utilities index (down 0.49%), the S&P BSE Telecom index (down 0.51%) and the S&P BSE Realty index (down 1.12%) underperformed the Sensex.
Index heavyweight and cigarette major ITC rose 1.47% to Rs 359.75. The stock hit a high of Rs 361.85 and a low of Rs 354.60 in intraday trade
Index heavyweight and IT major Infosys rose 0.84% to Rs 1,208.65. The stock hit a high of Rs 1,214.65 and a low of Rs 1,193.45 in intraday trade.
Bank stocks edged higher on renewed buying. Among private sector banks, HDFC Bank (up 1.65%), Yes Bank (up 3.06%), Axis Bank (up 2.04%), Kotak Mahindra Bank (up 0.66%), ICICI Bank (up 0.9%), Federal Bank (up 0.72%) edged higher. City Union Bank shed 0.45%.
IndusInd Bank was up 1.72% to Rs 1,107.80. The stock turned ex-dividend today, 23 June 2016, for dividend of Rs 4.50 per share for the year ended 31 March 2016 (FY 2016). Before turning ex-dividend, the stock offered a dividend yield of 0.41% based on the closing price of Rs 1,089.05 on BSE yesterday, 22 June 2016.
Among state-run banks, State Bank of India (up 2.16%), Canara Bank (up 0.8%), Bank of Baroda (up 2.15%), Corporation Bank (up 1.99%), Allahabad Bank (up 5.55%), Punjab National Bank (up 2.53%), Andhra Bank (up 1.19%), Syndicate Bank (up 0.84%), UCO Bank (up 0.9%), Dena Bank (up 0.14%), Union Bank of India (up 1.36%), Punjab & Sind Bank (up 2.53%) edged higher. Vijaya Bank (down 1.76%), Bank of Maharashtra (down 1.8%), IDBI Bank (down 0.43%), Central Bank of India (down 0.14%) and United Bank of India (down 0.22%) edged lower.
Reserve Bank of India Governor Raghuram Rajan said yesterday, 22 June 2016, that the cleaning up of bank balance sheets and the restoration of credit growth are vital and related elements in the growth agenda. The government and the Reserve Bank of India are helping public sector banks in this difficult but critical task, Rajan said at an interactive meet between industry and trade arranged by industry body ASSOCHAM in Bangalore. The government's effort in speeding up the debt recovery process and creating a new Bankruptcy system are two important steps towards improving the resolution process, he said. Rajan also said that improving governance of public sector banks and infusing bank capital will pay large dividends in the short run. Rajan said that banks are getting into the spirit of cleanup and are pursuing reluctant promoters to take the necessary steps to rehabilitate projects. The RBI Governor said that fundamentals of the borrower not being good and the ability of the lender to collect being weak were the two sources of current distress in the banking system.
Bank of India rose 0.94% after the bank said that it has raised Rs 1000 crore by issue of Basel-III compliant additional tier I bonds. The bonds have been rated AA(-) by Brickwork and A+ by CRISIL and bear coupon rate of 11.5% per annum.
Indian Bank rose 1.18% to Rs 136.75. The stock turned ex-dividend today, 23 June 2016, for dividend of Rs 1.50 per share for the year ended 31 March 2016. Before turning ex-dividend, the stock offered a dividend yield of 1.1% based on the closing price of Rs 135.15 on BSE yesterday, 22 June 2016.
Tata Motors rose 3.15% and Tata Steel rose 0.3% after a pair of opinion polls released yesterday, 22 June 2016, ahead of the Brexit referendum on European Union membership suggested the remain camp is gaining momentum. Both Tata Steel and Tata Motors have large operations in UK and Europe. Tata Motors derives majority of its revenue from its British luxury car unit Jaguar Land Rover (JLR). JLR is the largest automotive manufacturer in Britain. It is one of the UK's largest exporters and generates over 80% of its revenue from exports.
Tata Steel is Europe's second largest steel producer, with steelmaking in the UK and Netherlands, and manufacturing plants across Europe. Tata Steel Europe has initiated the process to sell its UK business viz. Tata Steel UK. Tata Steel Europe has invited seven short listed potential investors to submit binding bids for Tata Steel UK.
Pharma shares witnessed a mixed trend. Cipla (down 1.53%), Cadila Healthcare (down 0.88%), Alkem Laboratories (down 0.49%), Glenmark Pharmaceuticals (down 0.19%), GlaxoSmithKline Pharmaceuticals (down 1.23%) and Wockhardt (down 0.36%) fell. Dr Reddy's Laboratories (up 2.18%) and Aurobindo Pharma (up 0.76%) rose.
Drug major Sun Pharmaceutical Industries rose 1.37% at Rs 750.05 ahead of the company's board meeting today, 23 June 2016, for evaluating a proposal of buyback of equity shares of the company.
Lupin rose 1.01% to Rs 1,479.40 after the company announced after market hours yesterday, 22 June 2016, that it has received final approval from the United States Food and Drug Administration (FDA) to market a generic version of Amneal Pharmaceuticals' Activella Tablets. The drug is indicated in a woman with a uterus for treatment of moderate to severe vasomotor symptoms due to menopause and prevention of postmenopausal osteoporosis. It is also indicated in a woman with a uterus for treatment of moderate to severe symptoms of vulvar and vaginal atrophy due to menopause. Activella had annual US sales of $95.6 million, as per IMS MAT March 2016 data.
Stocks of public sector oil marketing companies (PSU OMCs) gained. BPCL (up 1.56%), HPCL (up 3.02%) and Indian Oil Corporation (up 1.46%), edged higher.
Stocks of oil exploration and production companies saw mixed trend. Cairn India (down 0.11%) and ONGC (down 0.21%) fell. Oil India (up 0.27%) and Reliance Industries (up 0.14%) rose.
Crude oil prices edged higher in the global commodities markets. Brent for August settlement was currently up 94 cents at $50.82 a barrel. The contract had fallen 74 cents or 1.46% to settle at $49.88 a barrel during the previous trading session.
Jain Irrigation Systems surged 5.38% to Rs 70.50 on reports that a foreign brokerage has upgraded its rating on the stock to overweight from equal-weight on robust earnings growth forecast. The foreign brokerage reportedly expects a 70% compound annual growth rate (CAGR) in earnings of Jain Irrigation Systems (JISL) over FY 2017-19. The brokerage reportedly stated that leverage has been a key concern for investors, but the company has now recapitalised its balance sheet with lower interest costs which is expected to boost its earnings. The foreign brokerage also cited other favorable factors for the company such as expectation of a better monsoon and an increasing central and state government thrust on micro irrigation systems (MIS) after two consecutive years of drought.
KEC International gained 3.18% after the company's announcement that it has secured new orders worth Rs 1036 crore. The company's transmission & distribution business secured orders worth Rs 666 crore. Cables business received orders worth Rs 53 crore and railway business secured a composite order worth Rs 317 crore.
The Sensex has risen 334.26 points or 1.25% in this month so far (till 23 June 2016). The Sensex has risen 884.68 points or 3.38% in calendar year 2016 so far (till 23 June 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 4,507.61 points or 20.03%. The Sensex is off 1,576.11 points or 5.51% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 3,022.52 points 10.06% from a record high of 30,024.74 hit on 4 March 2015.
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