A bout of volatility was witnessed as the two key benchmark indices trimmed gains in mid-afternoon trade. At 14:15 IST, the barometer index, the S&P BSE Sensex, was up 113.35 points or 0.43% at 26,516.31. The gains for the Sensex were higher in percentage terms than those for the Nifty 50 index. The Nifty was currently up 29.85 points or 0.37% at 8,124.55. A recovery in European stocks and gains in US index futures aided the upmove on the domestic bourses. Italian banks led gains in European stocks after reports that the Italian government is looking at adding 40 billion ($44 billion) as the country's officials are seeking ways to protect Italy's financial system in the wake of the UK's vote to leave the European Union last week.
European stocks had witnessed heavy losses in the preceding two trading sessions after the UK's vote to exit the European Union in a historic referendum on 23 June 2016. Stocks recovered in the UK tracking a recovery in British pound against the dollar. The FTSE 100 index was currently up 2.24%. The pound had witnessed a massive slide in the preceding two trading sessions in the wake of the UK's vote to leave the European Union.
Meanwhile, global credit rating agency Standard & Poor's Global Ratings yesterday, 27 June 2016, lowered its long-term foreign and local currency sovereign credit ratings on the United Kingdom to 'AA' from 'AAA' after Britain last week voted to leave the European Union in a historic referendum known as Brexit. S&P said that Brexit will weaken the predictability, stability, and effectiveness of policymaking in the UK and affect its economy, GDP growth, and fiscal and external balances. S&P said that the downgrade also reflects the risks of a marked deterioration of external financing conditions in light of the UK's extremely elevated level of gross external financing requirements. The vote for "remain" in Scotland and Northern Ireland also creates wider constitutional issues for the country as a whole. The outlook on the long-term rating is negative. The negative outlook reflects the risk to economic prospects, fiscal and external performance, and the role of sterling as a reserve currency, as well as risks to the constitutional and economic integrity of the UK if there is another referendum on Scottish independence, S&P said in a statement.
Trading in US index futures indicated a recovery for US stocks from a recent selloff triggered by the UK's decision to leave the European Union. Trading in US index futures indicated that the Dow Jones Industrial Average could jump 203 points at the opening bell today, 28 June 2016. US stocks registered heavy losses for the second trading session in a row yesterday, 27 June 2016, as investors continued to dump assets perceived as risky in the wake of the UK's vote last week to leave the European Union. Activity in the US services sector remained subdued in June, according to preliminary data released yesterday, 27 June 2016. In a report, market research group Markit said that its flash services purchasing managers' index (PMI) remained unchanged at 51.3 in June.
Most Asian stocks edged higher in an indication that markets were stabilizing in the wake of the UK's vote last week to leave the European Union.
Closer home, the market breadth indicating the overall health of the market was strong. On BSE, 1,599 shares rose and 849 shares declined. A total of 171 shares were unchanged. The BSE Mid-Cap index was currently up 0.39%, underperforming the Sensex. The BSE Small-Cap index was currently up 0.78%, outperforming the Sensex.
Telecom stocks edged higher on renewed buying. Reliance Communications (up 1.68%) and Bharti Airtel (up 1.77%) rose.
Idea Cellular rose 3.59% after the company said in an analysts meet presentation submitted to the stock exchanges that the company is gaining both revenue and traffic share in both mobile voice and data segments. The company further said that it is in the midst of building a wide and deep mobile broadband infrastructure. The company further said that there is a large potential for data penetration in India. The company also said that there is large headroom for new mobile subscriber additions in India.
Shares of telecom towers company Bharti Infratel rose 3.72% at Rs 339.75 after the company said that the proposed buyback of 4.70 crore shares at Rs 425 per share under tender offer route would commence on 12 July 2016 and close on 25 July 2016. The announcement was made before market hours today, 28 June 2016.
Capital goods stocks gained on renewed buying. Praj Industries (up 2.46%), Thermax (up 2.14%), Suzlon Energy (up 1.18%), L&T (up 0.9%), Alstom T&D India (up 1.21%), Crompton Greaves (up 0.7%), Bharat Heavy Electricals (up 0.17%) and BEML (up 0.53%) edged higher. Havells India (down 0.7%), ABB India (down 0.33%) and Bharat Electronics (down 0.65%) edged lower.
Siemens rose 2.77% at Rs 1,289 after the company announced that it won an order worth about Rs 570 crore to supply Static Synchronous Compensator (STATCOM) solutions to Power Grid Corporation of India (PGCIL). The announcement was made after market hours yesterday, 27 June 2016.
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