Markets consolidate ahead of Brexit vote

Business standard has Posted Markets consolidate ahead of Brexit vote Investors engaged in profit booking in the recent gainers at attractive and higher valuations Markets closed lower amid consolidation after rising for two days in a row as investors engaged in profit booking in the recent gainers at attractive and higher valuations. Meanwhile, caution continued to envelop the D-Street ahead of the UK referendum on whether to stay in the European Union due on Thursday.

However, latest Foreign Direct Investment (FDI) regime for a host of important sectors including defence, civil aviation and pharmaceuticals along with advancement of monsoon rains capped the downside.

The S&P BSE Sensex shed 54 points to close at 26,813 and the Nifty50 dropped 19 points to finish at 8,220.

Nikhil Kamath, Co-Founder & Director, Zerodha says "Markets held a tight range in trade today, oscillating in a small 30 point range. Weakness in the currency continued on the back of Rajan s exit with the Rupee depreciating to 67.6 levels. Market action remains tepid ahead of the Brexit vote which is now only two days away, an exit from the EU for the United Kingdom could garner extreme volatility in international markets.”

He adds” Technically the markets remain isolated in a small 200 point range with 8,300 as the top of the range, we remain neutral on the indices at this point and would advocate staying in cash at the current juncture."

GLOBAL MARKET

Asian shares closed mixed as investors take a breather after a rally triggered by growing expectations that British voters will choose to remain in the European Union in the referendum due on Thursday.

Japan’s Nikkei, Hong Kong’s Hang Seng gained between 0.8%-1.5% while Singapore’s Straits Times and China’s Shanghai Composite lost between 0.2%-0.4%.

European shares were trading flat after profit booking post sharp gains in the previous session capped further upside. In the previous session, European shares surged after fears of Britain exiting the European Union receded. The CAC-40, DAX and FTSE-100 were trading 0.1% higher.

STOCKS

Auto stocks rose in a weak market on hopes that above normal monsoon would drive demand for two-wheelers and tractors among others.

Auto stocks closed higher with Bajaj Auto up 1% on reports that the company plans to increase its market share by launching new motorcycle models over the next few months.

Mahindra & Mahindra was also up 1% on hopes of good tractor sales on the back of above normal monsoon. The company had sold 22,148 tractors in May 2016 compared with 18,245 units in May 2015.

Among other auto stocks, Hero MotoCorp, Maruti Suzuki and Tata Motors ended up between 0.2%-0.7%.

IT shares which gained in the previous session amid a weakening rupee were down on profit taking. Infosys and TCS lost between 0.3%-0.6% each.

The government on Monday announced a slew of reforms relating to foreign direct investment and easier terms for investors in sectors ranging from civil aviation to pharmaceuticals. In the aviation segment, Jet Airways, SpiceJet and IndiGo which shot up in the trade yesterday shed between 0.3%-1% on account of profit booking.

Hindalco gained 2% extending its past one month rally, after the company reported better-than-expected results for the quarter ended March 2016 (Q4FY16).

The initial public offer from Mahanagar Gas (MGL) for 2.46 crore shares opens today. The issue will close on Thursday, 23 June 2016. The price band for the issue has been fixed at Rs 380 to Rs 421. The IPO includes offer for sale of upto 1.23 crore shares by GAIL (India) and upto 1.23 crore shares by BG Asia Pacific Holdings PTE Ltd (BGAPH). Meanwhile, the company on Monday raised Rs 309 crore from nearly two dozen anchor investors.

Most of the telecom operators have shown improvement in network performance although Airtel, Vodafone, Reliance, Aircel and Idea need to better their call drop rate performance in Delhi-NCR, Trai said on Monday. Reliance Communications was up 1% while Bharti Airtel and Idea Cellular closed marginally lower.

Bank stocks ended mixed after the finance ministry in its quarterly revision on interest rates on small savings schemes kept the rates unchanged for Q2 September 2016. ICICI Bank was up 0.3% while SBI, Axis Bank and HDFC Bank closed lower up to 1%.