Views on markets today
- Markets gained for the third straight day, amid strong buying interest from foreign institutional investors, with auto and metal shares leading the gains. However, IT stocks retreated because of a weak growth forecast by Gartner.
The Sensex climbed 102 points to close at 25,516 and the Nifty advanced 23 points to end at 7,635.
- Auto and Metal indices were among the top sectoral gainers up 2-3%. Capital Goods and Realty indices edged up 1% each. Meanwhile, capital goods shares continued their uptrend after a private survey showed that India's manufacturing sector growth in June. L&T and BHEL ended up 1% each.
- IT majors witnessed profit taking after IT research firm Gartner trimmed its worldwide IT spend growth forecast to 2.1% from 3.2% earlier. TCS, Infosys and Wipro ended down 0.8-1.2%.
- Among the BSE Sectoral Indices - indices ended the day in positive while 4 ended the day in negative. Top Gainers: BSE Auto up by 3.24% and BSE Metal by 2.03%. Top Losers: BSE Teck down by 0.55% and BSE Oil & Gas by 0.54%.
Market breadth was positive at ~1.66 as investors bought large cap stocks. On provisional basis, FII's bought Rs 1.92bn worth of Indian equities and DII's sold Rs 7.74bn worth of equities.
Economic and Corporate Developments
- India's external debt rose 7.6% to $440.6 billion in 2013-14, owing to a rise in the deposits of non-resident Indians (NRIs) and foreign borrowings by banks.
A fall in the country's current account deficit and a revival in equity flows and borrowings by banks through currency swaps helped build foreign exchange reserves, the Reserve Bank of India (RBI) said in its review of India's external debt.
- Manufacturing activity rose to a four-month high in June, albeit the pick-up was too gradual, shows a widely-tracked HSBC purchasing managers' index (PMI). The index rose 51.5 points in June from 51.4 points in the previous month.
- Output in eight important infrastructure industries, termed the core sector, grew at a four-month low of 2.3% in May over a year before, compared to 4.2% in April, with half of these seeing a contraction in production, official data showed on Monday.
This might impact the Index of Industrial Production (IIP), as the core sector constitutes 38% of the index. However, some experts believe the low base of last year and favourable automobile numbers might save the month for IIP.
Buzzing Stocks
- Punj Lloyd closed 3.52% up at Rs 52.90 on BSE after the company received a letter of award for expansion and revamping of Ahmadi Depot, Kuwait from Kuwait National Petroleum Company.
Sterlite Technologies hit an upper circuit limit of 5% at Rs 68.60 on BSE after the company said it bagged nearly Rs 2500 crore of contracts from BSNL to implement end-to-end rollout of optical fiber network for defense services.
Hindustan Construction Company closed 3.75% up at Rs 48.45 on BSE after the company's subsidiary Lavasa Corporation filed draft prospectus with the market regulator for an initial public offer.
- Sasken Communication Technologies hit an upper circuit limit of 20% at Rs 265.55 on BSE after the company announced that it received arbitration award in its favor in the matter of Spreadtrum Communications Inc.
- Mahindra & Mahindra closed 4.03% up at Rs 1,194.15 on BSE after the company said its total tractor sales rose 8% to 29,884 units in June 2014 over June 2013.
Ramkrishna Forgings was locked at 5% upper circuit at Rs 184.55 on BSE after a domestic mutual fund bought 2.52% stake in the company on Monday, 30 June 2014.
Bharat Heavy Electricals closed 0.98% up at Rs 252.55 on BSE after the company said it successfully commissioned a 250 megawatts thermal unit in Rajasthan.
- L&T closed 1.40% up at Rs 1,725.35 on BSE after the company said that its construction division won a contract of Rs 2442 crore from Bharat Sanchar Nigam.
- Maruti Suzuki India closed 6.01% up at Rs 2584.85 on BSE after the company said its total vehicles sales rose 33.5% to 1.12 lakh units in June 2014 over June 2013.
- Hindalco Industries closed 6.76% up at Rs 175.20 on BSE after a foreign brokerage upgraded the stock to buy from sell rating.
- Jyoti Structures closed 1.64% up at Rs 61.80 on BSE after the company's board of directors approved issue of shares to qualified institutional buyers.
- Styrolution ABS (India) closed 1.99% up at Rs 601.25 on BSE following a global level deal involving Switzerland-based firm INEOS agreeing to buy its Germany-based partner BASF's 50% share in Styrolution.
- Nine metal shares rose by 0.47% to 6.76% on BSE as data showed China's manufacturing expanded in June at the fastest pace this year.
Hindalco Industries (up 6.76%), Hindustan Zinc (up 0.99%), Steel Authority of India (Sail) (up 3.59%), Sesa Sterlite (up 1.42%), Tata Steel (up 2.47%), Jindal Steel & Power (up 1.33%), NMDC (up 0.47%), Bhushan Steel (up 2.42%) and JSW Steel (up 2.55%), edged higher.
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