Hopes of further rate cut by the Reserve Bank of India on August 4 coupled with narrowing deficit in rainfall to 4 per cent from 7 per cent earlier supported benchmark indices as the BSE Sensex and NSE Nifty extended their gains for the fourth consecutive trading session on Monday.
The BSE Sensex and NSE Nifty gained 0.26 per cent and 0.12 per cent to 28,187.06 and 8,543.05, respectively.
G Chokkalingam, founder, Equinomics Research and Advisory said, “Expectation of further rate cut in the upcoming monetary policy, narrowing of monsoon deficit and the government announcement on Friday to inject capital in weak public sector banks (PSBs) cheered investors on Monday.”
Among the sectoral indices on the Bombay Stock Exchange (BSE), the S&P BSE Consumer Durables index jumped the most 1.37 per cent to 11,237.90. It was followed by the S&P BSE Bankex (up 0.99 per cent to 21,711.73), S&P BSE Auto index (up 0.73 per cent to 19,247.05), S&P BSE Capital Goods index (up 0.34 per cent to 18,142.26) and S&P BSE Healthcare index (up 0.33 per cent to 17,104.16).
On the other hand, the S&P BSE Metal index and S&P BSE IT index declined 1.08 per cent and 0.53 per cent to 8,574.51 and 11,013.86, respectively.
The BSE Midcap index hit a new record high of 11,392.69 in intra-day trade on Monday. The index closed 0.51 per cent higher at 11,330.91. The BSE Smallcap index gained 0.93 per cent to 11,941.20.
In a statement released on Friday, the Finance Ministry said that PSBs as of now are “adequately capitalised”, but would need Rs 1,80,000 crore extra capital over the next four years (up to 2018-19). Of this, the government plans to provide Rs 70,000 crore through budgetary support – Rs 25,000 crore each in the ongoing and next financial year and Rs 10,000 crore each in 2017-18 and 2018-19.
“Banking stocks led the rally on the benchmark indices on hopes of a rate cut by the Reserve Bank of India in the policy tomorrow. Strong rupee and continued fall in crude prices lifted the sentiment,” Gaurav Jain, Director, Hem Securities said.
Among day’s major market moving events, the much awaited Greek markets opened on Monday after remaining closed for 5-weeks after its government imposed capital controls in the economy. The markets nosedived 23 per cent in early trades. Greece’s largest commercial bank – National Bank of Greece hit its lower circuit and was seen down by 30 per cent in the day.
A Bloomberg report had said that the sell-off is expected to continue as political turmoil has undermined the confidence of investors in the market.
European markets however seemed untouched by the freefall in Greece and were seen trading in the day with marginal gains.
Asian peer markets Nikkei 225, Hang Seng and Shanghai closed in red with marginal corrections of 0.18 per cent, 0.91 per cent and 1.11 per cent, respectively.
On the domestic front, Jet Airways and Spicejet were once again seen soaring high on the back of lower operational cost expectations as Indian Oil stated that it would cut aviation turbine fuel (ATF) prices by 8.4 per cent – 9.7 per cent. The share price of SpiceJet and Jet Airways gained 1.10 per cent and 2.05 per cent, respectively.
Shares of Sun TV soared by more than 18 per cent in the day after the company reported a better than expected growth in bottom line. The company reported a 19.1 per cent growth in net profit at Rs 197.28 crore for the first quarter ended June 2015.
JK Tyre, Hexaware, Hinduja Ventures, Kanori chemicals, Bharti Airtel, Shivam Auto, Grindwell, AFL, Jaysree Tea, TN Petro, TV Today, Sangam India, India humanpipes, Torrent Power, EI Hotel, ENIL, Astra Zeneca, EID Parry, Britannia, Orient Cement, MEP and FLFL are some of the major companies which may announce its earnings on Tuesday.