Markets shed Brexit fears; Sensex soars 742.2 points

Trading started for the June derivative expiry week on subdued note amid volatility, but investor sentiments soon recouped during day’s session’s mainly of global relief rally derived on expecation of major Central Banks resorting to more stimulus to boost economy while waning the vulnerability of Brexit turmoil.

As of domestic situation, the Met forecast of good rains, all-round growth measures including implementation of 7th pay commission, more liberalisation in FDIS, along with optimism over passage key Good and Services Tax (GST) on approaching monsoon session hogged limelight during the weeks trading momentum.

 Also, firm rupee sentiment against US dollar and turnaround of FIIs from sellers to buyers led an bulls gaining upper-hand as well as across the spectrum shortcovering rally during the week.

The S&P BSE Sensex resumed lower at 26,347.81 and hovered in a range of 27,243.36 and 26,262.72 before ending the week at 27,144.91, showing a remarkable gain of 747.20 points or 2.83 per cent.

 The 50-share Nifty also surged by 239.75 points or 2.96 per cent to close the week at 8,238.35 after moving in a range of 8,356.75 and 8,039.35. Buying-spree was led by Realty, Oil&Gas, CapitalGoods, FMCG, PSUs, Power, HealthCare, Metal, Consumer Durable, Banks, Auto counters. IT and Teck sectors saw selling pressure, while the broader midcap and smallcap companies shares witnessed good buying. 

Meanwhile, foreign portfolio investors (FPIs) bought shares worth whopping Rs 1,155.28 crore during the week as per Sebi’s record including the provisional figure of July 01. In the broader market, the BSE Mid-Cap index rose by 544.15 points or 4.81 per cent to settle at 11,857.56.

 The BSE Small-Cap index rose by 606.80 points or 5.38 per cent to settle at 11,885.43. Among the S&P, BSE sector and industry indices, realty rose 8.36 per cent, followed by oil & gas 6.48 per cent, capital goods 6.22 per cent, FMCG 5.71 per cent, power 5.15 per cent, healthcare 4.88 per cent, metal 4.66 per cent, consumer durables 4.10 per cent, bankex 3.55 per cent and auto 3.16 per cent, while IT fell by 1.31 per cent and teck by 0.21 per cent.

In the 30-share Sensex pack, 25 stocks gained and only five of them declined in during the week. Engineering and construction major L&T rose 7.47 per cent to Rs 1.540.65 after the company announced the price band for the proposed initial public offering (IPO) of equity shares of its subsidiary, L&T Infotech.

 L&T announced the price band of Rs 705 to Rs 710 per equity share for IPO of its subsidiary L&T Infotech. Other major movers included, ONGC (7.06 pc), Cipla (6.59 pc), Powergrid (6.52 pc), Axis Bank (6.36 pc), M&M (6.08 pc), Lupin (5.84 pc), Gail (4.94 pc), NTPC (4.76 pc) and HUL (4.55 pc).

However, Index heavyweight and cigarette major ITC ended the week at Rs 252.35. The stock turned ex-bonus on Friday, 1 July 2016, for 1:2 bonus issue and fell by 28.59 per cent topping the losers list along with TCS by 2.68 per cent, Infy 1.88 per cent and Coal India by 0.43 per cent. The total turnover during the week on the BSE fell to Rs 12,060.21 crore from last weekend’s level of Rs 13,849.91 crore while NSE rose to Rs 96,690.99 crore from Rs 85,554.83 crore. 

The rupee snapped its last 2-week losing streak against the American currency, recovered by 64 paise to close at 67.32 per dollar on fresh selling of green currency in view of strong foreign capital inflows amidst sharp rise in equities.

 The rupee resumed lower at nearly 4-month low at 68.00 per dollar against the last weeekend’s level of 67.96 at the Interbank Foreign Exchange (Forex) and fell further to 68.08 per dollar on initial dollar demand from banks and importers on the back of higher dollar on concerns over the UK leaving the European Union. 

The rupee had last traded at 68.27 per dollar on March 1, 2016. However, it recovered afterwards to 67.31 per dollar on fag-end selling of dollars by banks and exporters on the back of sharp recovery in equities before ending at 67.32, showing a gain of 64 paise or 0.94 per cent. The rupee had dropped by 120 paise or 1.80 per cent in previous two weeks. The domestic unit hovered in a range of 68.08 and 67.31 per dollar during the week.

At overseas, the US dollar traded mostly up initially against its major rivals in the Asian trade, while the pound remained under siege, sliding back toward a 31-year low, reflecting the deeply bearish mood of investors after Britain opted to exit the European Union, triggering shockwaves across global markets. The British pound fell against the US dollar on Friday, still reeling from Bank of England chief Mark Carney’s Brexit-inspired warning that the central bank could enact further monetary easing as soon as August.

Gold had a fairly quiet week and finished slightly lower in a rangebound trade at the domestic bullion market here as buyers turned cautious after the recent rally, prompting some consolidation. Subdued demand from stockists and retailers at higher levels predominantly weighed on trade, despite buoyant global cues.

 Strong rupee value as well as some profit taking by jewellery traders and investors after its recent swift rally largely impacted trading sentiment, a bullion trader said. After a strong start to trade, gold which hit an over two-year high largely moved in a narrow range in the absence of follow-up buying at existing levels turned negative and then flat towards the close.