Markets have a tepid closing; broader markets outshine

Markets finished the session on a tepid note due to absence of strong directional cues and mixed trend in global equity markets.

The S&P BSE Sensex ended up 11 points to settle at 27,021 and the Nifty50 settled 7 points higher at 8,273. Yesterday, Sensex closed above 27,000 for the first time since October 28, 2015.

Mustafa Nadeem, CEO, Epic Research says, "Nifty has made a bullish mat & hold pattern which suggest further bullish momentum will be sustained in incoming trading sessions. The bullish mat & hold pattern consist of 3- 5 candlesticks with reversal in short term trend while continuation of previous prevailing trend. Bears are continuously being squeezed out at every dips as we see higher levels going forward. Bulls have further opened the higher level to 8,350 – 8,400 in near term with OI data indicating the same as we see strong support formation at 8,150."

In the broader market, both the BSE Midcap and Smallcap indices performed better than the front-liners with gains of around 0.5% and 0.9% each.

Foreign investors were net buyers in equities to the tune of Rs 500 crore on Tuesday.

Barely a day after the India Meteorological Department (IMD) predicted that southwest monsoon would hit the Kerala coast on June 9, the met department said that rains have already reached the Kerala coast today.

Meanwhile, the World Bank has lowered its forecast for the global growth in 2016 to 2.4%, saying that the world economy is facing stronger headwinds.

The Reserve Bank of India (RBI) will have more room to cut interest rates if the central bank gains confidence in reaching its 5% target for consumer inflation by March 2017, said Governor Raghuram Rajan on Wednesday.

In overseas markets, European market edged lower in early trade retreating after two straight days of gains, as a drop in Austrian bank Erste knocked back financial stocks.

Asian stocks were mixed as weak Chinese export data offset a brightening energy sector outlook and an expected delay in interest rate hikes by the US Federal Reserve. Data showed that China's exports fell more than expected in May as global demand remained stubbornly weak, but imports beat forecasts, adding to hopes that the economy may be stabilising.

Back home, BSE Capital Goods and Power indices gained over 1.5%. However, IT and select metal shares reeled under selling pressure.

L&T and BHEL surged by 2% each. Larsen & Toubro (L&T) has moved higher to Rs 1,506, its highest level since October 27, 2015, on the National Stock Exchange (NSE), after the company announced that it has signed a contract to build a stadium for Qatar's 2022 World Cup.

Telecom stocks firmed up after the inter-ministerial panel Telecom Commission on Tuesday backed lowering of spectrum usage charge (SUC) to three per cent of their annual revenue for spectrum acquired in future auction. Shares of Bharti Airtel, Idea Cellular and RCom gained 1%-2%.

From the financial space, ICICI Bank, HDFC, Axis Bank and SBI were up 1%-2%. However, HDFC Bank was down 0.8%. The private sector lender has reduced its marginal cost of funds-based lending rate (MCLR) - the benchmark to price loans - by five basis points for one-month bucket to 8.95 per cent and 9.25 per cent for the two-year bucket.

Tata Motors ended up 0.3% after its overseas arm Jaguar Land Rover (JLR) on Tuesday reported an 18% rise in global sales at 44,946 units in May.

Shares of logistic companies gained on hopes of clearance of the crucial Goods and Services Tax (GST) Bill in the upper house of the Parliament. Patel Integrated Logistics, Gati, Snowman Logistics, VRL Logistics, Sical Logistics and Allcargo Logistics ended up 5%-9%.

Shares of companies engaged in defence related sector such as Walchandnagar Industries, Astra Microwave Products, Reliance Defence and Engineering, Nelco and Bharat Electronics rallied by up to 12%. Walchandnagar Industries surged 12% on back of over 10-fold jump in trading volumes.

According to media reports, the United States (US), on June 7, recognised India as a “major defence partner” which means that for defence related trade and technology transfer the country would now be treated at par with America’s closest allies.

Among others, JSW Energy moved higher by 15% on reports that the company may get the 750 MW Karnataka state electricity board power purchase contract.

Asian Granito rose 8% after the company said that it has received an order for its recently launched vitrified tiles Jumbo and Imperio.

GMR Infrastructure gained 3% after the company said that a consortium led by the company has won the 221 KM Eastern Dedicated Freight Corridor project.

Themis Medicare was locked in 20% upper circuit at Rs 577 on the BSE amid heavy volumes ahead of the extra ordinary general meeting (EGM) on Friday, June 10, to obtain shareholders nod for fund raising plan through the issue of equity shares on a preferential basis to non-promoters.