Logging second straight weekly gain, the benchmark BSE Sensex today rose by 117.94 points to end at 27,324, led by gains in banking shares such as State Bank of India on hopes of a rate cut.

Market was also helped by further recovery in the rupee against dollar and firm trend in global markets, traders said.

Sentiments turned better after Finance Minister yesterday said the economy was in a recovery mode with inflation and fiscal deficit under control, they added.

Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
The recent phase of range-bound correction is led by FIIs influenced by factors like increase in European bond yield, outperformance of other EMs and currency volatility. On the positive side, latest CPI trajectory provides scope for rate cut by the next RBI meet. This is likely to provide a support to this range bound correction. Also, in the near-term, there is a risk as market factors the extent of further earnings downgrade considering FY16 earnings growth expectation continue to be more than 20%.

Both the leading indices, NSE and BSE, ended in positive zone for the second straight week.

Meanwhile, inflation cooling to a four-month low in April and industrial output growth at a five-month low in March is stocking hopes of an interest rate cut by the Reserve Bank.

In choppy movements, the 30-share Sensex opened firm at 27,233.90 and made further headway to touch the day’s high of 27,379.57 led by gains in rate-sensitive stocks.

Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
The markets remained in a volatile trading session tracking the global cues and lack of major triggers from the domestic front. Quite trading in the European bond market coupled with better performance from Pharma Company Roche also reduced the quantum of the volatility spill over to our market at a greater extent.  Passenger car sale attained a double digit volume growth, and it helped the market to a greater extent to stabilize at around 8250 levels. The market may remain sideways at least a day or two before breaching the NSE 200 day moving average at 8293. Nifty today closed at 8262 up around 38 points.  The market breadth remained positive as there were seen 1451 stocks advancing against 1238 stocks declining. The Nifty volatility index, India VIX stood at 19.8150 down around 4.27%. The mid cap and small cap index closed up around 0.35% and 0.62% respectively.
Consumer Durables and FMCG were the gainers in the sectorial front, which closed up around 0.81% and 0.67% respectively. The losers on the other end were Realty and Metal which ended down around 1.33% and 1.05% respectively. In the stocks’ front, the major gainers were Lupin and SBIN which closed up around 3.83% and 2.15% respectively whereas the selling was seen in Bank Baroda and PNB closed down around 2.55% and 2.42% respectively.
The FIIs were sellers in the cash market segment on 14 May 2015, Thursday, sold shares worth Rs 73.76 crore. The DIIs on the other hand were buyers on 14 May, bought shares worth Rs 302.57 crore in the capital markets segment.
The European markets were trading in green and the US future indices were also up.
On Monday companies like Asian Paint, Wheels India, Jaysree tea, Glaxo, Shivam Auto, Somany ceramics, Honda power, Axis Cades, HSIL and JBM Auto may announce their earnings.

However, on emergence of profit-booking, it briefly slipped into the negative zone to touch day’s low of 27,159.76, but staged a strong comeback to close 117.94 points or 0.43 per cent higher at 27,324.

The index had shed 45.04 points in yesterday’s trade.

The 50-share NSE Nifty also ended 38.15 points or 0.46 per cent higher at 8,262.35 after moving between 8,279.20 and 8,212.20 intra-day.

The rise in the BSE barometer was supported by gains in state-run SBI that climbed 2.39 per cent, followed by HDFC 1.80 per cent and Axis Bank 0.80 per cent.

Market View by Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
Sentiments & Technicals
The template for a rate cut has probably been set by latest economic release showing consumer inflation below 5%, and a five month low industrial production growth. However today’s lacklustre performance in equity indices suggest that traders are not overjoyed as they estimate that the rate cut prospects may be tempered by monsoon expectations, which could be the next major event risk in the short term. Further oil has swung back to $60, supporting concerns that the on going depreciation in rupee against US dollar could gain momentum, in the event of a rate cut.
Meanwhile, 8360 barrier in Nifty continues to appear stiff, which could mean that despite oscillators’ position being accommodative towards an upswing, the potential for a break past this barrier looks limited. Sustained inability to clear 8360 would also suggest that the 7800 could attract prices lower.

Bharti Airtel, M&M, Infosys, ONGC, Maruti Suzuki, L&T, Bajaj auto and Tata Motors were among other gainers.

Sector-wise, BSE consumer durables index gained the most with a rise of 0.81 per cent, followed by teck 0.69 per cent, FMCG 0.67 per cent, IT 0.65 per cent, healthcare 0.65 per cent, auto 0.59 per cent, capital goods 0.53 per cent, banking 0.44 per cent and PSU 0.15 per cent.

Of 30-Sensex shares, 16 stocks ended in the positive zone.

Vivek Gupta, CMT – Director Research, CapitalVia Global Research
Nifty Future throughout the week traded in broad range as high volatility was witnessed during the intraday trades, overshadowing the positive inflation data of CPI and WPI. The market breadth indicating the overall health of the market was positive. Small-Cap stocks were in demand.
In overseas markets, European stocks edged higher after overnight rally on Wall Street and further signs that stability was returning to bond markets after a recent rout. Asian stocks were mixed. US stocks also edged higher with the S&P 500 index ringing up a new closing high. Movement of index in near term will depend on further reforms initiatives to be taken by the government and upcoming fourth quarter results of large cap companies like SBI, ITC, Asian Paints, Colgate, Bajaj Auto, Tata Steel, Bharat Forge etc. to be announced next week.
Nifty May Future gave closing at 8260 with weekly marginal gains of 49.45 points. Technically, Nifty Future is trading in a broad range of 8000 – 8370 levels taking support of its important psychological level of 8000. Short term trend remains sideways until index moves and closes above resistance level of 8370. Deeper corrections can be seen till 8000 – 7800 levels if index break below its immediate support level of 8150.

The broader markets also rose as the small-cap and mid-cap indices rose 0.62 and 0.35 per cent, respectively.

In Asian region, other markets ended higher, while European stocks rose in their early trade, supported sentiment here.

DLF shares close 2% down on CCI order

Shares of DLF settled nearly 2 per cent down today as the Competition Commission found the realty giant guilty of indulging in “unfair and abusive” business practices in sale of apartments in a Gurgaon housing project.

The stock ended the day 1.65 per cent lower at Rs 124.85 on the BSE. During the day, it fell by 2 per cent to Rs 124.30.

At the NSE, it was down 1.53 per cent to end at Rs 125.

In terms of volume, 7.82 lakh shares of the company changed hands at the BSE and over 58 lakh shares were traded at the NSE during the day.

DLF has said it is “very surprising” that no penalty has been imposed on various other realtors operating in the same market with the same product line.

In a fresh order yesterday against DLF, the Competition Commission of India (CCI) ruled that the realty giant was guilty of indulging in “unfair and abusive” business practices in sale of apartments in a Gurgaon housing project.

CCI asked DLF Gurgaon Home Developers Private Limited and its group companies to “cease and desist” from such unfair trade practices, but did not impose any fresh monetary penalty as Rs 630 crore fine has already been slapped on DLF for similar violation during the same period in a separate case.

This is the latest in a series of orders passed by CCI against DLF, although it has also let off the company in some cases, saying it did not find any violation of the competition laws.

Reacting to the CCI order, DLF said in a statement — a copy of which was also filed with the stock exchanges this morning — that it has received the CCI order and would take the necessary steps as advised by the legal counsels.

Asian shares rise, poised for weekly gains

Reuters – Asian shares rose on Friday, on track for a solid weekly gain, as investors awaited more U.S. data later in the session for clues on the timing of the U.S. Federal Reserve’s interest rate hike.

Financial spreadbetters predicted a steady but lacklustre start to European trade, with Britain’s FTSE 100 seen opening between 1 point higher and 4 points lower, or flat in percentage terms.

Germany’s DAX was expected to open up between 5-10 points, or 0.1 percent, while France’s CAC 40 was seen opening flat.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.7 percent, poised to gain about 1.3 percent for the week. Japan’s Nikkei stock index added 0.8 percent, marking a 1.8 percent weekly rise.

China stocks slumped after Xiao Gang, chairman of the China Securities Regulatory Commission, said that the watchdog’s recent move to accelerate approvals for initial public offerings won’t have a big impact on the market – which some interpreted as a signal IPO activity could be stepped up further.

The CSI300 index fell 1.2 percent while the Shanghai Composite Index lost 1.1 percent, but both were on track for robust weekly gains.

On Wall Street, all three major indexes gained more than 1 percent, and the S&P 500 closed at a record after U.S. economic data painted an improving employment picture, but subdued producer price inflation quashed bets that the U.S. central bank would raise interest rates sooner rather than later this year.

“If we get a ‘wait and see’ approach in June, which seems likely at the moment, then the earliest the Fed can act in revising its forecasts upwards would be September, and it would be unusual to do that, and act on rates at the same meeting, which means the earliest we could get a move on rates now is either October, or December,” Michael Hewson, chief market analyst at CMC Markets, said in a note.

Friday’s slated U.S. releases include industrial production for April and the University of Michigan’s preliminary May reading on consumer sentiment.

The dollar was treading water, trying to stay afloat after sinking to a nearly four-month low on Thursday against a basket of rival currencies.

The dollar index edged down 0.1 percent to 93.547. It fell as low as 93.133 on Thursday, its lowest since late January, pressured by a resurgent euro, which scaled a nearly three-month peak of $1.1445. The common currency last stood at $1.1382, down about 0.2 percent from late U.S. levels.

The dollar was buying 119.53 Japanese yen, about 0.3 percent higher on the day.

Spot gold traded near a three-month high and was on track for its biggest weekly gain in four months on receding expectations of a U.S. hike, and as the greenback’s weakness made it more appealing to investors holding other currencies.

It was down about 0.2 percent on the day at $1,217.90 an ounce but was on track for a weekly rise of more than 2 percent.

“Gold’s break over the technical 200-day moving average of $1,218 triggered further buying from momentum investors,” said HSBC analyst James Steel.

Crude oil futures edged down but were set to end the week slightly higher, buoyed by the weaker dollar, forecasts of lower U.S. crude output, and a pick-up in global demand.

U.S. crude shed about 0.1 percent on the day to $59.80 a barrel but was on track to rise for a ninth week, which would be the benchmark’s longest winning streak since 1983.

Front-month Brent was down about 0.1 percent at $66.73.

 

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