The benchmark BSE Sensex today staged a strong comeback to close 321.73 points higher on across-the-board buying in blue-chip stocks by funds and retail investors on rate cut hopes and value-buying.

Further, beginning of June series in the derivatives segment, supported the upside in stock prices.

The 30-stock index opened on a positive note at 27,553.03 but quickly slipped into the red on profit-booking. Later, it bounced back at a rapid pace to hit the day’s high of 27,888.32 on beginning of June series in the derivatives segment.

Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
The new expiry (June) has given a good start with expectation on rate cut on 2nd June. Based to RBI target of 6% CPI by January’16, the current data (4.9%) does provide a room to lower interest rate. A rate cut and a positive outlook by RBI will provide additional strength to the momentum.

The gauge settled 321.73 points or 1.17 per cent higher at 27,828.44, its strongest rally since May 18.

On similar lines, NSE Nifty recaptured the 8,400-mark by rising 114.65 points or 1.38 per cent to 8,433.65 after hovering between 8,443.90 and 8,305.70, intra-day.

Revival of value-buying by investors as recent fall was excessive, too influenced sentiments, they said.

Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
Being the first day of June F&O series, the markets rallied despite weak European market cues. The European markets fell for a second day as the Greece has not reach a debt agreement with creditors.  Domestic retail investors started building fresh long positions in the new series on anticipation of a possible rate cut in the  next RBI policy meet, which helped the market to recover.  Nifty closed at 8433 up around 114 points.  But the market breadth changed to positive as there were seen 1438 stocks advancing against 1240 stocks declining. The Nifty volatility index, India VIX stood at 16.6575 down around 2.77%.
The mid cap and small cap index closed up around 1.21% and 1.30% respectively.
All the sectors ended in green and the major gainers for the day were Auto and Capital goods, ended up around 1.84% and 1.65% respectively.
In the stocks’ front, the major gainers were M&M and Grasim which closed up around 4.64% and 3.87% respectively whereas the selling was seen in Hindalco and PNB closed down around 1.98% and 1.82% respectively.
The FIIs were sellers in the cash market segment on 28 May 2015, Thursday, sold shares worth Rs 792.54 crore. The DIIs on the other hand were buyers on 28 May, bought shares worth Rs 683.29 crore in the capital markets segment.
The US index futures were also down.
On Monday for Indian markets HSBC Manufacturing PMI will be the major trigger.

Bharti Airtel at 5.98 per cent was the best Sensex gainer, followed by M&M 4.89 per cent, GAIL 2.30 per cent, Maruti Suzuki 2.26 per cent and Coal India 2.14.

Sentiments bolstered on renewed hopes that the Reserve Bank of India may cut rates in its policy review and beginning of new series in the derivatives segment, triggering buying by participants, brokers said.

Market View by Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
Indian Rupee depreciated even as equities rose, a relationship that is usually seen the other way round, suggesting that both asset classes are individually positioning themsleves ahead of the several event risks lined up for next month. Meanwhile, the proportion of delivered volume across BSE and NSE crossed 50 for the first time since April 30th, which, in a way suggests that trading interest, which usually gives depth for markets, is waiting on the sidelines. Recent declines may have given a platform for today’s swing higher, which eclipsed the weaker expectations of GDP data which was due for release later in the day. However lingering concerns over the veracity of the new method of new calculating GDP may also have been a reason for market discounting a weak expectation for data release.
In Nifty, the swing higher from 8290/60 has given a platform for piercing 8440 region, hinting at continued rise towards 8670-8760. However, this region looks porous and could allow slippage back again, which should be guarded against.

Of 30-Sensex shares, 26 ended higher, while 4 ended lower.

Among BSE sectoral indices, auto index gained the most by rising 2.08 per cent, followed by infra (1.84 per cent), healthcare (1.63 per cent), bankex (1.45 per cent), oil&gas (1.32 per cent) and capital goods (1.23 per cent).

Buying activity also re-emerged in the broader markets with the BSE mid-cap index rising 1.48 per cent and small cap gaining 1.22 per cent.

Market View by Gaurav Jain, Director, Hem Securities
Indices finally inched higher after last 5-day consolidation trading session. Hopes of rate cut by RBI, broad-based renewed buying interest, mixed bag of corporate earnings in the week also weighed on the sentiment. Macro-economic data like GDP Growth for Q4, RBI policy, global cues and remaining large corporate earnings will become the clues for the direction of the market in the coming week.

Meanwhile, foreign portfolio investors sold shares worth Rs 792.54 crore, while Doemstic Institutional Investors bought shares worth Rs 683.29 crore yesterday, as per provisional data.

Asian stocks up but wary of China, dollar retreats from highs

Reuters – Asian stocks were modestly higher early on Friday with investors on edge ahead of opening trade in China’s markets which plunged the previous day, while the dollar took a breather from a sharp run up this week.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent after shedding more than 1 percent on Thursday. South Korean share gained 0.2 percent and Australian stocks rose 1 percent. Japan’s Nikkei was flat.

Markets were anxiously waiting to see how Chinese shares open later in the session after Thursday’s dive. Indexes dropped over 6 percent as investors dumped stocks after more brokers tightened margin trading requirements and the central bank drained money to reduce flush liquidity in the financial system.

“Although numerous triggers have been proposed for Thursday’s nearly 7 percent fall in the Shanghai Composite, none of these seem likely to have had a large enough impact on fundamentals to explain such a sizable move,” economists at Capital Economics wrote.

“Instead, it was probably driven by a wild swing in sentiment. With valuations divorced from economic fundamentals, the heightened volatility we have seen is likely to continue.”

Mixed signals from the ongoing Greek debt talks were another signal to investors to remain cautious.

Cash-strapped Athens said it aims to reach an agreement with lenders by Sunday, but its creditors did not share its optimism. Euro zone official said Greece won’t receive any money if it does not agree on an outline of a reforms deal.

European shares dropped overnight, with Germany’s DAX , France’s CAC and Greek stocks falling, while periphery euro zone bond yields rose. The negative sentiment spilled over into North America, with the Dow and S&P edging lower.

The euro took a slightly more positive view of the Greek debt talks, and was up 0.1 percent at $1.0959 after pulling away from a one-month low of $1.0819.

The dollar retreated against the yen, fetching 123.79 yen after scaling 124.46 overnight, its highest since 2002. The greenback was knocked off the peak as Japanese government officials used stronger language to describe recent moves, with Finance Minister Taro Aso saying the yen’s recent drop had been “rough.”

The dollar index stood little changed at 96.936, pulling back from a one-month high of 97.775 struck on Wednesday.

In commodities crude oil extended gains after rebounding overnight thanks to data showing a fourth weekly drawdown in U.S. crude stocks.

U.S. crude was up 43 cents at $58.11 a barrel and Brent gained 36 cents to $62.94 a barrel.

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