Markets factor-in Greece default; Sensex up 136 points

Mumbai, June 30 (IANS) A barometer index of the Indian equity markets, which was subdued throughout the intra-day trade as a result of Greece loan default, bounced back to make healthy gains on Tuesday.

The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) – closed 136 points or 0.50 percent up.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) also ended in the positive zone. It gained over 50 points or 0.60 percent at 8,368.50 points.

The S&P BSE 30-scrip Sensex, which opened at 27,627.39 points, closed at 27,780.83 points, up 135.68 points or 0.49 percent from its previous day’s close at 27,645.15 points.

The Sensex touched a high of 27,814.53 points and a low of 27,570.95 points in the intra-day trade.

According to analysts, investors were initially anxious during the day’s trade as Greece defaulted on its loan payment to the International Monetary Fund (IMF). However, they soon factored-in the development.

“The markets were hopeful that the Greece referendum will provide a way for the resolution of this crisis. That’s why the markets did not plunge and even managed to end higher,” Dipen Shah, head of the private client group research, Kotak Securities, elaborated to IANS.

The Greek government has called for a referendum to let the people decide on the terms and conditions of another bailout.

Anand James, co-technical head for research with Geojit BNP Paribas, pointed out to IANS that investors were waiting for prices to become more attractive and that they have also shown increased risk-taking appetite since Monday.

“Prices have become more attractive, there was also bargain hunting during the day’s trade,” James said.

“The price fall also prompted investors to weigh in the attractiveness of domestic factors like monsoon’s performance, healthy macro-economic conditions, growth rate and a stable economy vis-à-vis, Greece issue.”

Devendra Nevgi, chief executive of ZyFin Advisors, told IANS that the Indian markets have shown resilience towards the crisis, despite global correction.

“The markets have shown resilience, thanks to the participation of domestic investors. Indian bond yields have also gone up, the rupee is stable and the markets look decently placed,” Nevgi said.

The domestic institutional investors (DIIs) have infused more than Rs.115 billion in June, while the foreign investors have sold stocks worth Rs.77 billion.

The 10-year bond yield stood at 9.86 percent, while the old bond yield was pegged at 8.04 percent. Rupee was stable at Rs.63.65 per dollar.

During Tuesday’s trade, heavy selling pressure was observed in information technology (IT) and technology, entertainment and media (TECK) sectors.

However, healthy buying took place in healthcare, consumer durables, fast moving consumer goods (FMCG), metal and automobile sectors.

The S&P BSE IT index fell by 87.81 points, followed by the TECK index which was down 15.45 points.

The S&P BSE healthcare index augmented by 342.54 points, consumer durables index gained by 200.16 points, metal index edged-higher by 158.50 points, FMCG index rose by 154.32 points and automobile index was up by 104.82 points.

The major Sensex gainers in Tuesday’s trade were: Coal India, up 3.11 percent at Rs.421.05; Tata Steel, up 3.04 points at Rs.304.70; Lupin, up 2.97 percent at Rs.1,886.85; Sun Pharma, up 2.89 percent at Rs.874.20; and Hindustan Unilever, up 1.82 percent at Rs.916.45.

The major Sensex losers were: Tata Consultancy Services (TCS), down 1.59 percent at Rs.2,552.20; Wipro, down 1.41 percent at Rs.544.15; Gail, down 1.28 percent at Rs.392.05; ICICI Bank, down 1.08 percent at Rs.308; and Hindalco Inds, down 0.71 percent at Rs.112.

Among the Asian markets, Japan’s Nikkei gained by 0.63 percent, China’s Shanghai Composite Index edged-higher by 5.55 percent. Hong Kong’s Hang Seng increased by 1.09 percent.

In Europe, the London FTSE 100 index receded by 0.48 percent, the French CAC 40 declined by 0.30 percent and Germany’s DAX Index was lower by 0.20 percent at the closing bell here.

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