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I had mentioned in Friday’s closing report that Nifty,
Sensex were likely to move sideways. On Monday, the major indices of the Indian
stock markets were range-bound and ended flat. Trading volumes were on the
lower side indicating that investors preferred to wait for the trend to emerge.
The trends of the major indices in the course of Monday’s trading are given in
the table below:
Taking cues from their Asian peers, key Indian equity
indices were trying to recover from the hangover of last week's Brexit vote.
Selling pressure was witnessed in information technology stocks. The BSE market
breadth was tilted in favour of the bulls -- with 1,813 advances and 795
declines. Initially on Monday, the key indices opened on a flat note --
marginally in the red -- as investors' sentiments remained weak on account of
the volatility caused in the global markets due to Britain's vote to exit the
EU. This had also resulted in a sharp drop in the rupee's value and dried up
foreign fund inflows. However, the Indian markets gained some momentum shortly
after to trade in the green as the Asian markets, especially the Nikkei, showed
a considerable recovery by shrugging off the global selloff stimulated by the
Brexit. The rupee, after a major fall of 71 paise on Friday, managed to wipe
out its losses and helped the equity markets to support its weakened
sentiments. The investors were seen to be cautious, ahead of the US trade data
to be released later on Monday, and GDP and consumer confidence data to be
released a day later. The Indian markets are also expected to remain cautious
ahead of some major industrial data to be released later during the week.
The National Stock Exchange of India Ltd (NSE) on Monday
said it plans to list on bourses as its board has expressed a desire to file
the Draft Red Herring Prospectus (DRHP) latest by January 2017 for domestic
listing and by April 2017 for overseas listing, "after addressing
restructuring needs of the exchange and the regulatory requirements for
listing," the exchange said in a statement. The exchange said that the
board has re-constituted the current listing committee as an empowered
sub-committee of the board to accelerate the listing procedures. The committee
will take decisions within a stipulated time line. All these decisions were
taken during the last meeting of board of directors on June 23," it said.
Coming back to news on world markets, the International
Monetary Fund (IMF) has urged Britain and the European Union (EU) to reduce the
risks in the wake of Britain's decision to exit the bloc. "At this point,
policy-makers, both in the UK and in Europe, are holding that level of
uncertainty in their hands and how they come out in the next few days is really
going to drive the direction in which risk will go," IMF Managing Director
Christine Lagarde told a forum on Sunday at the Aspen Ideas Festival in
Colorado. Following a decision to exit the EU, Britain would need to negotiate
the terms of its withdrawal and a new relationship with the EU. Lagarde said
the IMF "will continue to encourage the parties involved to actually
proceed with this transition in the most efficient, predictable way in order to
reduce the level of uncertainty", which will determine the level of future
risks. The IMF has continued to monitor the development closely and stood ready
to support its member countries as needed, Lagarde added. In a statement
released on Friday in the wake of Britain's referendum, the IMF chief urged
Britain and the EU authorities to work collaboratively to "ensure a smooth
transition to a new economic relationship between the UK and the EU",
including by clarifying the procedures and broad objectives that will guide the
process. The IMF had warned before the referendum that the British economy
could shrink to 0.8% in 2017 if it leaves the EU.
The British pound has fallen sharply in trading in Asia
on Monday, adding to Friday's record one-day decline. The pound was trading at
$1.3365, down almost 3 per cent from Friday's close. Against the euro it was
trading at 1.2147, down 1.4%, BBC reported. On Friday the pound had its biggest
one-day fall against the dollar, at one stage sinking as low as $1.3236.
Chancellor of the Exchequer, George Osborne will issue a statement before the
start of trading in Britain in a bid to calm the markets. Osborne has not
spoken publicly since the 'Leave' campaign won Thursday's referendum paving the
way for Britain's exit from the European Union (EU). Authorities in Asia have
been taking action to stabilise financial markets.
Clarity on Britain's plans to exit the European Union
(Brexit), along with the progress of monsoon rains and derivatives expiry are
expected to steer the Indian equity markets this week. Other major risks like a
weak rupee, low foreign fund inflows and global uncertainty brought about by
Brexit are expected to linger. Besides, investors are expected to keep an eye
out on the Indian companies and sectors that have a high exposure to Europe and
the UK such as the automobile, pharma and IT industries. Positive outcomes such
as lower global crude oil prices and expectations on future stimulus measures
by international central banks can perk up sentiments. Further, stock specific
action can be expected in sectors like of consumer durables, consumer
non-durables and automobile industries which are most impacted by a good
monsoon.
In Monday’s trading some gains were seen in shares of
public sector banks, Bank of India and Bank of Baroda.
The top gainers and top losers in the
major indices of the Indian stock markets are given in the table below:
The top gainers and top losers in the major indices of
the Indian stock markets are given in the table below:
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