A recovery in European stocks and gains in US index futures aided the upmove on the domestic bourses. The barometer index, the S&P BSE Sensex rose 113.61 points or 0.43% at 26,516.57, as per the provisional closing data. The Nifty 50 index rose 32.35 points or 0.4% at 8,127.05, as per the provisional closing data. Italian banks led gains in European stocks after reports that the Italian government is looking at adding 40 billion ($44 billion) to protect Italy's financial system in the wake of the UK's vote to leave the European Union last week.
The Sensex jumped 180.37 points or 0.68% at the day's high of 26,583.33 in afternoon trade, its highest level since 23 June 2016. The index lost 24.50 points or 0.09% at the day's low of 26,378.46 at the onset of trading session. The Nifty rose 51.65 points or 0.64% at the day's high of 8,146.35 in afternoon trade, its highest level since 23 June 2016. The index fell 7.85 points or 0.09% at the day's low of 8,086.85 at the onset of trading session.
In overseas stock markets, 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 2.52%. 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 198.50 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.
Closer home, market breadth indicating the overall health of the market was strong. On BSE, 1,582 shares rose and 1,014 shares declined. A total of 190 shares were unchanged. The BSE Mid-Cap index provisionally rose 0.48%. The BSE Small-Cap index provisionally rose 0.79%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2624 crore, lower than turnover of Rs 3279.90 crore registered during the previous trading session.
Telecom stocks edged higher on renewed buying. Reliance Communications (up 0.94%) and Bharti Airtel (up 1.75%) rose.
Idea Cellular rose 3.84% at Rs 104.20 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 3.18% at Rs 337.95 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.
Metal and mining stocks edged higher as copper prices rose in global commodities markets. Jindal Steel & Power (up 3.92%), Hindustan Copper (up 4.62%), Hindustan Zinc (up 2.2%), JSW Steel (up 2.61%), Steel Authority of India (up 0.35%), NMDC (up 1.54%), Vedanta (up 0.57%) and Tata Steel (up 0.18%) edged higher. Hindalco Industries (down 1.25%) and National Aluminium Company (down 0.84%) edged lower.
High Grade Copper for September 2016 delivery was currently up 1.93% at $2.1665 per pound on the COMEX.
Index heavyweight and cigarette major ITC edged higher for the second straight trading session. The stock was up 2.27% at Rs 367.20. The stock hit a high of Rs 369.50 and a low of Rs 358 in intraday trade.
Dr Reddy's Laboratories was up 0.48% at Rs 3,256.05. The company during market hours today, 28 June 2016, announced the closure of the buyback of equity shares. The company has bought back 50.77 lakh shares at an average price of Rs 3,090.92 per share spending Rs 1569.41 crore.
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