Key benchmark indices held firm in mid-afternoon trade. At 14:15 IST, the Sensex was up 476.67 points or 1.76% at 27,603.57. The gains for the Nifty index were lower than those for the Sensex in percentage terms. The Nifty was currently up 136.80 points or 1.64% at 8,460. Gains in global stocks aided the upmove on the domestic bourses.
World stocks edged higher as stronger-than-expected US jobs report suggested that the US economic recovery was back on track. The Fed funds futures market data showed that investors are not pricing in a rate increase from the US Federal Reserve in calendar year 2016 despite the strong jobs report for June 2016. The Fed has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015. A delay in interest rate increases from the Fed would slow capital flight from emerging markets.
The broad market depicted strength. There were almost two gainers against every loser on BSE. 1,739 shares gained and 891 shares declined. A total of 155 shares were unchanged. The BSE Mid-Cap index was currently up 1.55%. The BSE Small-Cap index was currently up 0.93%. Both these indices underperformed the Sensex.
In overseas stock markets, Asian and European stocks edged higher as investors contemplated more monetary stimulus from Japan and continued to cheer the positive jobs data from the US. The Fed funds futures market data showed that investors are not pricing in a rate increase from the US Federal Reserve in calendar year 2016 despite the strong jobs report for June 2016. The Fed has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015. A delay in interest rate increases from the Fed would slow capital flight from emerging markets. Japanese stocks surged as investors saw poll results for Japan's upper house as signaling new rounds of economic and political reforms by the coalition government led by Prime Minister Shinzo Abe. The Nikkei 225 Average closed 3.98% higher. In the upper house elections held yesterday, 10 July 2016, Abe's ruling coalition led by his Liberal Democratic Party won a landslide victory, making it far easier for Abe to push through his economic agenda dubbed Abenomics.
US stocks edged higher during the previous trading session on Friday, 8 July 2016, as strong June employment report bolstered investor sentiment on the strength of the economy. US employers in June added a seasonally adjusted 287,000 jobs, the strongest month of hiring since last October, according to the Labor Department report. That was a sharp rebound from May, when hiring sagged to 11,000, the weakest reading since the economy stopped shedding jobs in 2010. The unemployment rate rose to 4.9% from 4.7%, suggesting that more people entered the labor force, given the better-than-expected headline number.
FMCG stocks rose on renewed buying. Britannia Industries (up 1.61%), Colgate-Palmolive (India) (up 0.19%), Dabur India (up 1.25%), Godrej Consumer Products (up 0.88%), Hindustan Unilever (up 0.84%), Marico (up 2.05%), Nestle India (up 0.27%), Tata Global Beverages (up 0.72%), Procter & Gamble Hygiene and Health Care (up 0.03%) and Jyothy Laboratories (up 0.71%) rose. GlaxoSmithkline Consumer Healthcare (down 1.04%) and Bajaj Corp (down 0.1%) fell.
Pharma stocks also moved higher. Cipla (up 0.69%), Dr Reddy's Laboratories (up 1.05%), Glenmark Pharmaceuticals (up 0.99%), Lupin (up 1.33%), Alkem Laboratories (up 2.3%), GlaxoSmithKline Pharmaceuticals (up 0.99%), Aurobindo Pharma (up 1.26%) and Wockhardt (up 2.36%) gained.
Sun Pharmaceutical Industries rose 1.8% after the company announced the launch of Gemcitabine InfuSMART Ready-To-Administer in oncology therapy in Europe. InfuSMART is a technology in which oncology products are developed in a Ready-To-Administer (RTA) bag. With the roll-out of Gemcitabine InfuSMART, Sun Pharma becomes world's first pharmaceutical company to manufacture and launch a licensed RTA oncology product. This innovatively differentiated product will have a shelf life of two years. Over the next few months, Sun Pharmaceutical Industries will launch Gemcitabine lnfuSMART across Netherlands, UK, Spain, Germany, Italy and France.
Sun Pharma said it will introduce additional InfuSMART oncology products in the future.
Cadila Healthcare rose 3.77% after the company said it received final approval from the US drug regulator for an oral anti-diabetic drug. The company made the announcement during trading hours today, 11 July 2016. The company has received the final approval from the US Food and Drug Administration (USFDA) to market Nateglinide Tablets USP in strengths of 60 milligram (mg) and 120 mg. The drug is an oral anti-diabetic agent used in the management of Type 2 diabetes mellitus. It will be produced at the group's formulations manufacturing facility at the pharma special economic zone (SEZ) in Ahmedabad.
Dishman Pharmaceuticals and Chemicals rose 4.25% after the company announced on Saturday, 9 July 2016, that renewal of US Food and Drug Administration (USFDA) inspection of the company's Bavla facility in Ahmedabad, Gujarat was successfully completed on 8 July 2016.
LIC Housing Finance rose 2.52% to Rs 524.25 after 26.81 lakh shares, or 0.53% equity, changed hands in a block deal at Rs 520.90 per share at 09:23 IST on BSE. The stock hit a high of Rs 529 so far during the day, which is also a record high for the counter. The stock hit a low of Rs 518 so far during the day.
Meanwhile, as per the monthly data released by the Association of Mutual Funds in India (AMFI), equity mutual fund schemes including tax saving equity schemes known as Equity Linked Saving Schemes (ELSS) received net inflow of Rs 320 crore in June 2016. The inflow would have been much higher if one excludes large redemption of arbitrage funds. Media reports suggest that there was redemption of Rs 3500 crore from arbitrage funds in June 2016. AMFI does not give separate data on arbitrage funds. It clubs arbitrage funds under the equity fund category. Meanwhile, balanced funds received net inflow of Rs 2402 crore in June 2016. Balanced funds typically have 65-70% of their portfolio invested in equities and 30-35% in debt.
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