Banking and IT stocks led rally for key benchmark indices on the first trading session of the week today, 22 June 2015. A rally in European stocks and sharp gains for US index futures which indicated a likely firm opening of US stocks later in the global day sent key equity benchmark indices in India surging. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their highest level in nearly three weeks. Stocks rose across the globe on reports that Greece has presented a new plan to stave off default before an emergency summit on the country's debt crisis. The Sensex was provisionally up 397.76 points or 1.46% to 27713.93. Key benchmark indices traded in positive zone throughout the trading session today 22 June 2015.
The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up 1.49%, outperforming the Sensex. The BSE Small-Cap index was up 1.4%.
Realty stocks surged. Index heavyweights ITC and HDFC rose. Tata Steel advanced on reports the company's UK trade unions on Friday, 19 June 2015, suspended the strike action scheduled for 22 June 2015 after a new pension offer from Tata Steel UK, which keeps British Steel Pension Scheme (BSPS) open.
The rally for key benchmark indices today, 22 June 2015, was also triggered by speculation that pick-up in sowing of Kharif crops, above-average monsoon rains during the initial part of the June-September southwest monsoon season, data showing higher water storage in reservoirs and a restrained increase in minimum support prices for Kharif crops announced by the government last week will improve the odds for further monetary policy easing from Reserve Bank of India (RBI). The RBI cut its main benchmark lending rate viz. the repo rate by 25 basis points after a monetary policy review on 2 June 2015. The central bank at that time said that the monsoon and its impact on food costs will be key to further easing. The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 106.12 crore during previous trading session on Friday, 19 June 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 447.55 crore on Friday, 19 June 2015, as per provisional data released by the stock exchanges.
Indian stocks may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month June 2015 series to July 2015 series. The near month June 2015 derivatives contracts expire on Thursday, 25 June 2015.
In overseas stock markets, European stocks rallied as investors grew optimistic over Greek debt negotiations. Asian markets edged higher on reports that Greece has presented a new plan to stave off default before an emergency summit on the country's debt crisis. US stocks edged lower during the previous trading session on Friday, 19 June 2015, as the persistent deadlock in Greek debt talks made investors cautious heading into the weekend.
As per provisional closing, the S&P BSE Sensex was up 397.76 points or 1.46% to 27713.93. The index jumped 466.14 points at the day's high of 27,782.31 in late trade, its highest level since 2 June 2015. The index rose 100.86 points at the day's low of 27,417.03 in early trade.
The CNX Nifty was up 128.15 points or 1.56% at 8,353.10, as per provisional closing. The index hit a high of 8,369.45 in intraday trade, its highest level since 2 June 2015. The index hit a low of 8,257.40 in intraday trade.
The BSE Mid-Cap index was up 156.57 points or 1.49% at 10,643.69, outperforming the Sensex. The BSE Small-Cap index was up 152.71 points or 1.4% at 11,095.50, underperforming the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,724 shares rose and 981 shares fell. A total of 111 shares were unchanged.
The total turnover on BSE amounted to Rs 2296 crore, lower than turnover of Rs 3542.85 crore registered during the previous trading session on Friday, 19 June 2015.
Bank stocks edged higher on renewed buying. Among public sector banks, Union Bank of India (up 4.96%), United Bank of India (up 2.96%), Bank of India (up 2.51%), Bank of Baroda (up 3.2%), IDBI Bank (up 2.9%), Canara Bank (up 1.98%), Indian Overseas Bank (up 2.79%) and State Bank of India (up 2.21%) edged higher.
Punjab National Bank (PNB) was up 3.48% at Rs 138.30. The stock hit a high of Rs 139.65 and a low of Rs 131.20 in intraday trade. PNB turned ex-dividend today, 22 June 2015, for dividend of Rs 3.30 per share for the year ended 31 March 2015.
Among private sector banks, Axis Bank (up 3.8%), Yes Bank (up 3.32%), ICICI Bank (up 3.56%), Kotak Mahindra Bank (up 2.45%), HDFC Bank (up 1.49%) and IndusInd Bank (up 0.53%) edged higher.
Index heavyweight and housing finance major HDFC was up 2.23% at Rs 1,265. The stock hit a high of Rs 1,272.60 and a low of Rs 1,235 in intraday trade.
Realty stocks surged. Housing Development & Infrastructure (up 7.23%), Unitech (up 6.97%), DLF (up 7.56%), Prestige Estates (up 2.64%), D B Realty (up 2.01%), Sobha (up 1.53%) and Godrej Properties (up 0.99%) edged higher. Oberoi Realty (down 0.61%) edged lower.
Indiabulls Real Estate jumped after the company said that its board of directors approved the preferential allotment of shares of the company to the promoter group entities. The stock jumped 31.03% at Rs 55.10. Indiabulls Real Estate yesterday, 21 June 2015, said that to augment the long-term resources of the company for meeting funding requirements for its business purposes and as a reflection of confidence that the promoters have in the future of the company, the board of directors of the company at its meeting held on Saturday, 20 June 2015, inter alia, approved the preferential offer and issue of up to 3.67 crore equity shares of Rs 2 each and up to 4.36 crore warrants, convertible into equivalent number of equity shares of Rs 2 each, to the promoter group entities at an issue/conversion price of Rs 67 per share, which is a premium of 59.33% based on the closing market price of Rs 42.05 at BSE on Friday, 19 June 2015. The total equity investments by the promoters would amount to Rs 538 crore in the company post conversion of warrants, Indiabulls Real Estate said.
Index heavyweight and cigarette major ITC was up 1.57% at Rs 309.95. ITC during market hours today, 22 June 2015, said that its wholly owned subsidiary Russell Credit acquired the entire subscribed and paid-up equity share capital of Rs 20 crore of BFIL Finance (BFIL), another wholly owned subsidiary of the company. Consequently, BFIL has ceased to be a direct subsidiary of the company with effect from 18 June 2015, ITC said.
Tata Steel edged higher on reports the company's UK trade unions on Friday, 19 June 2015, suspended the strike action scheduled for 22 June 2015 after a new pension offer from Tata Steel UK, which keeps British Steel Pension Scheme (BSPS) open. The stock was up 1.71% at Rs 310. Tata Steel had announced last week that Tata Steel UK has launched a new initiative in its efforts to resolve the pension dispute with its UK trade unions. Tata Steel said that it has approached ACAS (Advisory, Conciliation and Arbitration Service) to help facilitate the next phase in talks between the parties.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update issued yesterday, 21 June 2015, that the southwest monsoon has further advanced into some more parts of Chhattisgarh, remaining parts of Odisha and West Bengal and some parts of Jharkhand. Conditions are favourable for further advance of southwest monsoon into remaining parts of north Arabian sea, Gujarat state, Chhattisgarh, Jharkhand, entire Bihar, Uttarakhand, Himachal Pradesh, Jammu & Kashmir, most parts of Madhya Pradesh and some parts of Uttar Pradesh, Punjab, Haryana, Chandigarh & Delhi and Rajasthan during next 3-4 days, the IMD said. The Southwest monsoon was vigorous over Odisha, Vidarbha, Coastal Andhra Pradesh, Telangana and South Interior of Karnataka and active over Konkan & Goa and Coastal Karnataka during the past 24 hours ending at 830 hrs, the IMD said.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 11% above the Long Period Average (LPA) until 20 June 2015. Region wise, the southwest monsoon was 22% above the LPA in Central India, 20% above the LPA in South Peninsula, 5% above the LPA in East & Northeast India and 13% below the LPA in Northwest India until 20 June 2015.
The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
Meanwhile, weekly data released by the Ministry of Agriculture after trading hours on Friday, 19 June 2015, showed that the sowing of Kharif crops is gathering pace. However, total acreage for Kharif crops remains lower than the corresponding period in the previous year. The total sown area for Kharif crops as on 19 June 2015 stood at 91.61 lakh hectares compared with 98.88 lakh hectares at this time last year.
In overseas stock markets, European stocks surged today, 22 June 2015, fueled by the prospect that a deal for debt-burdened Greece may soon be reached. Key indices in France, Germany and UK were up 1.29% to 3.24%.
Greece has reportedly presented a new plan to stave off default before an emergency summit on the country's debt crisis. The Greek government's new proposals include tax increases and spending cuts to hit budget targets. The head of the cabinet to European Commission President Jean-Claude Juncker reportedly said in a tweet yesterday, 21 June 2015, that Greece's package is a good basis for progress at the euro summit.
An emergency euro zone summit has been scheduled today, 22 June 2015, to discuss Greece's fate. Greece is up against a June 30 deadline to make a 1.6 bililon ($1.8 billion) repayment to the International Monetary Fund, with larger payments to the European Central Bank falling due next month.
Asian markets edged higher today, 22 June 2015, on reports that Greece has presented a new plan to stave off default before an emergency summit on the country's debt crisis. Key indices in Japan, Hong Kong, Taiwan, Singapore and South Korea were up 0.4% to 1.34%. In Indonesia, the Jakarta Composite was off 0.52%. The Chinese stock market was shut for a holiday.
Trading in US index futures indicated that the Dow could jump 151 points at the opening bell today, 22 June 2015. US stocks edged lower during the previous trading session on Friday, 19 June 2015, as the persistent deadlock in Greek debt talks made investors cautious heading into the weekend.
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