Sensex rises 147 pts ahead of Greek referendum; banks lead

Moneycontrol Bureau

The market registered steady gains on Friday before the outcome of Greek referendum that will be held on Sunday. Equity benchmarks outperformed global peers with the Sensex ending above the 28000 level and the Nifty few points away from 8500 level. However, the broader markets underperformed.

The 30-share BSE Sensex gained 146.99 points or 0.53 percent at 28092.79 and the 50-share NSE Nifty rose 40 points or 0.47 percent to 8484.90, aided by banking & financials. The BSE Midcap and Smallcap indices closed flat after rallying in previous three consecutive sessions.

For the week, the benchmark indices gained 1 percent each and the broader markets climbed more than 1.5 percent on hopes of lesser impact of referendum on the global economy and especially India.

Dipen Shah, head of private client group research at Kotak Securities said Indian economy is not linked to Greece in any major way. While there can be an impact on currency due to potential outflows, the strong forex reserves should help in reducing the impact to a great extent, he added.

According to him, going ahead, CPI numbers, quarterly results and progress of monsoons are the immediate triggers (apart from the Greek referendum outcome). Later in the month, the progress on major bills such as GST in the monsoon session of the Parliament will be the trigger to watch out for, Shah said.

Global markets were mixed in trade today. China's Shanghai Composite slumped 5.77 percent amidst news that the Chinese securities regulator is investigating suspected market manipulation.

European markets were down around 0.3 percent (at 16 hours IST) ahead of the Greek referendum vote on bailout that will decide the future of the debt-laden country, which defaulted on a 1.6 billion euro IMF loan. Capital controls on Greek banks remain in place until after the vote.

Be it a yes or no from Greeks on July 5, global markets will continue to remain volatile for the near-term, said Nick Parsons of National Australia Bank. A yes-vote does not mean Greece will get a new bailout package immediately and a no-vote does not necessarily mean Greece will exit eurozone, he feels.

On Thursday, the International Monetary Fund (IMF) warned that Greece would need comprehensive debt relief and more financial aid over the next three years of over 50 billion euros

Back home, the rupee gained further, rising 8 paise to 63.43 a dollar (the highest closing level since April 30) against 63.51 a dollar in previous session.

Lupin rose 1.6 percent on entering the Russian pharma market by acquiring 100 percent stake in Biocom. Barclays expects this deal to be of strategic importance. The brokerage is overweight on stock with a target price of Rs 2,102 apiece.

Dr Reddy's Labs gained 1 percent. Nomura has a buy rating on the stock as it believes the drug major has invested significantly in complex generics ahead of peers.

Housing finance company HDFC was the biggest gainer on Sensex, up 2.5 percent followed by HDFC Bank and HDFC Motocorp with more than 1.6 percent upside.

However, metals & mining stocks saw selling pressure. Vedanta, Coal India and Tata Steel lost 1-2 percent. Reliance Industries, ONGC and Tata Motors were marginally down.

In the broader space, MTNL shot up 20 percent after Anupam Shrivastava, CMD of the state-run telecom company BSNL has said that MTNL will be delisted before the merger. However, MTNL has said that there is no delisting proposal under consideration of the board.

However, Bharat Forge dropped 3.6 percent after Nomura said order inflows for class 8 trucks in North America declined 25 percent year-on-year to 19,625 units in June 2015. This is the fourth consecutive month of decline – order inflows fell by 9-23 percent Y-o-Y over the March-May 2015 period, it added.