Market firms up; breadth strong

Key benchmark indices firmed up in morning trade. At 10:16 IST, the barometer index, the S&P BSE Sensex, was up 44.92 points or 0.17% at 26,857.70. The gains for the Sensex were higher in percentage terms than those for the Nifty 50 index. The Nifty was up 10.90 points or 0.13% at 8,230.80. Positive cues from Asian market strengthened investors' sentiment.

The Sensex rose 74.51 points, or 0.28% at the day's high of 26,887.29 in morning trade. The index fell 39.84 points, or 0.15% at the day's low of 26,772.94 in early trade. The Nifty rose 18.45 points, or 0.22% at the day's high of 8,238.35 in morning trade. The index fell 11.75 points, or 0.14% at the day's low of 8,208.15 in early trade.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,165 shares rose and 686 shares fell. A total of 122 shares were unchanged. The BSE Mid-Cap index was currently up 0.24%. The BSE Small-Cap index was currently up 0.33%. Both these indices outperformed the Sensex.

In the overseas market, most Asia markets were trading higher today, 22 June 2016. US stocks closed slightly higher yesterday, 21 June 2016, after trading within a narrow range after Federal Reserve Chairwoman Janet Yellen cautioned that the UK leaving the European Union (EU) posed a risk while new polls showed support for the "stay camp" growing. In her testimony to the Senate Banking Committee, Yellen said a victory for the "leave camp" in this week's UK referendum on membership in the EU would pose a significant risk to the US economy and global financial market stability, and reiterated the cautious approach to raising interest rates that the Federal Open Market Committee signaled last week when it stood pat on US interest rates.

The key event in the UK and Europe this week is the Brexit referendum tomorrow, 23 June 2016, where British voters will decide whether the country should remain a member of the EU or leave it.

Most FMCG shares edged higher. Marico (up 1%), Jyothy Laboratories (up 0.89%), Dabur India (up 0.87%), Britannia Industries (up 0.73%), Tata Global Beverages (up 0.60%), Colgate Palmolive (India) (up 0.29%), Godrej Consumer Products (up 0.21%), GlaxoSmithKline Consumer Healthcare (up 0.13%), Nestle India (up 0.10%) and Bajaj Corp (up 0.06%), edged higher. Procter & Gamble Hygiene & Health Care was down 0.13%.

Hindustan Unilever (HUL) was down 0.89% to Rs 864.30 on turning ex-dividend today, 22 June 2016, for final dividend of Rs 9.50 per share for the year ended 31 March 2016.

IT shares rose. Persistent Systems (up 1.43%), Hexaware Technologies (up 0.96%), MindTree (up 0.81%), Oracle Financial Services Software (up 0.49%), MphasiS (up 0.34%), HCL Technologies (up 0.27%), TCS (up 0.25%) and Infosys (up 0.13%), edged higher. Wipro was down 0.04%.

Tech Mahindra rose 0.51% after the company announced after market hours yesterday, 21 June 2016, that the investment committee of board of directors of the company on 21 June 2016 approved the proposal to acquire Bio Agency, a UK based entity. The BIO Agency specialises in digital transformation and innovation, helping organisations change the way they engage with their customers. The company is acquired at the enterprise value of 40 million pounds plus surplus cash not exceeding 5 million pounds as at the completion date. The payment of 22 million pounds and the surplus cash will be made upfront and the balance is deferred payments based on company performance. The closing of the transaction is expected to take place in the first week of July 2016.

A part of the cash consideration is in deferred payments from 2017 to 2019 based on the company performance during the period FY 2017 to FY 2019. The management of Bio will be also awarded consideration based on revenue they bring to Tech Mahindra over next 3 years.

BIO, UK specializes in digital transformation and innovation, helping organizations change the way they engage with customers. It has revenues of GBP 12.5 million for the year ended 30 April 2016. The acquisition brings forth the synergy that will open up more clients for BIO globally, especially in US and Europe, scaling their offering geographically and enabling new services and deeper digital change.

Majesco rose 1.28% after the company announced a partnership with eGain, a global provider of cloud customer engagement solutions. The announcement was made after market hours yesterday, 21 June 2016. As part of the alliance, Majesco will embed eGain's knowledge-guided digital engagement capabilities into its insurance industry solution. The companies will also team together on joint business opportunities in engaging and serving clients.

eGain's cloud-based customer engagement hub (CEH) consists of modular applications built on an open omnichannel platform. eGain's digital capability is embedded in Majesco's DigitalConnect solution and is a part of the Majesco Cloudlnsurer platform that unifies processes, technology, knowledge, interactions, and analytics and applies them across channels to enable greenfields, startups and existing insurers.

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