BSE Sensex rises 161.25 pts to close at 26,586.55 on jump in factory output

By: | Updated: June 15, 2015 5:08 PM

BSE Sensex today rose 161 points to 26,586.55 on account of better-than-expected factory output data and steady inflation

BSE Sensex, rbi monetary policyInvestor sentiment got a lift from strong IIP and steady inflation (CPI) numbers released on Friday despite weak Asian cues. (Reuters)

The benchmark BSE Sensex today rose 161 points to 26,586.55 on account of better-than-expected factory output data and steady inflation, while value-buying in beaten-down stocks also added to the upside.

Besides, sentiment also turned positive on reports of steady progress in monsoon, traders said.

Industrial production grew at a two-month high of 4.1 per cent in April, primarily driven by manufacturing sector, while retail inflation edged up to 5.01 per cent in May.

Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
Better than expected CPI and fair development to monsoon till-date is providing support at the sensitive 8000 level. But still India is in risk-off mode, led by dollar liquidity which is impacting increase in global bond yield. Global market is also concerned over Greek debt talks, and how soon Federal Reserve might raise interest rates. As soon a consensus is reached over Greek issue, it will trigger the trend accordingly.

Meanwhile, a data showed wholesale inflation remained in the negative zone for the seventh consecutive month in May following easing prices of fuel and food items.

In volatile movements, the 30-share Sensex after falling to the day’s low of 26,307.84, staged a strong comeback at a rapid pace to hit high of 26,728.60. On profit-booking towards the close at improved levels, it trimmed gains and settled 161.25 points or 0.61 per cent higher at 26,586.55.

Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
Market opened with a positive note and but made an intraday low at 7944.85 but recovered on strong macro-economic data’s and optimism about the monsoon, despite speculation for Greece’s default and exit are likely. IIP data which came on Friday was above the street expectation at 4.1% in the month of April, manufacturing sector recorded a growth of 5.1% and CPI stood at 5.01% in the month of May.
The Wholesales price index based inflation came out today, where the data stood at (-) 2.36% as compared to (-) 2.65% in the previous month. But the food prices index rose 3.8% mainly of higher pulses price, whereas the fuel price index fell 10.51%.  In May month last year the data was at 6.18%. The overall food inflation was at 3.8% while the inflation in fuel and power basket was at (-) 10.51% on annual basis.
Nifty closed at 78013 up around 31 points. The market breadth changed to positive from negative as there were seen 1419 stocks advancing against 1227 stocks declining. The Nifty volatility index, India VIX stood at 17.5250 up around 0.27%.
The mid-cap index closed down around 0.14% whereas small cap index closed up around 0.36%.
The major buyers in the sectorial front were Auto and Healthcare which closed up around 1.05% and 0.84% respectively. The losers on the other end were Consumer Durables and Metal which closed down around 0.92% and 0.70% respectively.
In the stocks’ front, the major gainers were Idea and Cairn which closed up around 3.20% and 3.18% respectively whereas the selling was seen in Power grid and Bank of Baroda, which closed down around 2.85% and 2.55% respectively.
The FIIs were sellers in the cash market segment on 12 June 2015, Friday, sold shares worth Rs 670.96 crore. The DIIs on the other hand were buyers on 12 June, bought shares worth Rs 705.58 crore in the capital markets segment.
The European markets were down as the Greece and its creditors’ debt talks stalled.  The US index futures were also down.

The gauge had gained 54.32 points in the previous session.

The 50-share NSE Nifty managed to end above 8,000-level by rising 31 points or 0.39 per cent to 8,013.90 after shuttling between 8,057.70 and 7,944.85 intra-day.

The rise in Sensex was supported by gains in Sun Pharma with gain of 2.95 per cent. Bajaj Auto surged 2.13 per cent, HDFC Ltd 2.07 per cent and RIL 1.33 per cent were among other gainers.

Among 30-Sensex constituents, 17 ended higher.

Market View by Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
Volatility with a muted range characterised the opening day of the week, despite news of capital infusion to banks, and surprising IIP data. FOMC’s rate setting meeting scheduled for 17th this week, is obviously the main reason behind the traders’ caution, but a mild uptick in CPI also stoked fears that, inflation, which is under control, may be slowly coming off the base effect, and soon climb. WPI data released today also the decline in whole sale price inflation was less than expected.

Shares of Cairn India rose by 3.79 per cent to Rs 187.60 as private miner Vedanta moves to absorb the oil firm in a USD 2.3-billion deal to create India’s largest diversified natural resources company. Vedanta ended 1.49 per cent down.

The broader markets, however, saw a mixed trend with the BSE small-cap index rising 0.42 per cent, while mid-cap shedding 0.01 per cent.

Market View by Gaurav Jain, Director, Hem Securities
After continued sell-off, markets witnessed a relief rally today on the bourses supported by improved macro-economic data i.e. Industrial production and inflation numbers. Timely arrival of monsoon in the southern part and strengthening of rupee also improved the sentiment and hopes of the investors. However, there is a looming concern of Greece payment default on the street and on the world indices.

Meanwhile, foreign investors sold shares worth Rs 670.96 crore last Friday, as per provisional data.

Globally, other Asian markets ended lower and European stocks were down in their early trade.

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