In a volatile session, the benchmark BSE Sensex today rebounded by 373.62 points to 27,251.10 led by gains in banking and auto stocks after drop in inflation and industrial output data fuelled rate cut hopes.

The upside was also supported by gains related to inclusion of some stocks in MSCI India index.

MSCI Inc announced that eight companies including Bharti Infratel, Eicher Motors, Lupin and Bharat Forge will be added to the list.

Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
Latest CPI trajectory provides scope to cut rate by the next RBI meet in June 2nd. May be the point to ponder is to have 25bps or 50bps cut. This is likely to provide a support to the range bound correction led by FIIs due to global factors like increase in Europe bond yield, outperformance by other EMs and currency volatility.

At present, companies such as Infosys, HDFC, TCS, RIL, Sun Pharma and ITC are part of MSCI India index.

Sentiment was boosted after retail inflation cooled to a four-month low in April and industrial output growth slipped to a five-month low in March, increasing changes of an interest rate cut by the Reserve Bank at its next meeting.

In volatile movements, the 30-share Sensex opened firm and regained the crucial 27,000-mark to touch the day’s high of 27,299.80 led by gains in rate-sensitive stocks.

Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
After a positive opening the markets were seen slipping into the negative territory but managed to rebound tracking the European markets. The European markets rebounded on the back of earnings reports and on the news of GDP data of France and Italy which increased more than expected.
Today Nifty opened at 8181, made an intraday high and low of 8254 and 8089 and finally closed at 8235 up around 108 points. The market breadth turned to positive from negative as there were seen 1648 stocks advancing against 1048 stocks declining. The Nifty volatility index, India VIX stood at 20.6850 up around 0.68%.
Yesterday two data came out, the country’s consumer price inflation eased to a four month low of 4.87% in April whereas the IIP fell to a 5 month low at 2.2% in March against 5.2% in the previous month.
Barring the realty sector, which ended down around 0.71% all other sectors ended in green. The major sectorial gainers for the day were Banking and Auto, which closed up around 2.76% and 1.73% respectively.
In the stocks’ front, the major gainers were Axis Bank and ICICI Bank which closed up around 4.98% and 3.49% respectively whereas the selling was seen in Lupin and Hindalco closed down around 3.51% and 3.50% respectively.
The FIIs were sellers in the cash market segment on 12 May 2015, Tuesday, sold shares worth Rs 1329.43 crore. The DIIs on the other hand were buyers on 12 May, bought shares worth Rs 1331.93 crore in the capital markets segment.
The US index futures were also up.
Castrol, Jubilant food, NCC, Heg, Amtek Auto, GSFC, JK tyre, Manappuram, Oriental Bank, Manappuram, Graphite, Amtek India, Zydus Wellness, PC Jeweller, Apar Industries, Arvind and OFSS are the companies which may announce their earnings tomorrow.

On emergence of profit-booking it slipped into negative zone to touch day’s low of 26,750.01.

Meanwhile, HSBC today changed its stance on the country to “underweight”, saying corporate earnings may remain muted, monsoon could be weak and odds are against rate cuts.

Discounting HSBC downgrade, Sensex staged a strong comeback towards the middle of session and settled the day 373.62 points or 1.39 per cent higher at 27,251.10.

Market View by Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
The markets of late have not been falling as much as it has been volatile. If MAT and weak earnings expectations have been prominent themes during such periods of volatility, a few global events have given momentum to such swings. But all along, a decline in cash market volumes may have aggravated the volatility which was in full display on Wednesday, with Nifty reversing trend by 150 points atleast three times during the day. With all these in the background it is uncertain how Indian markets could play US rate hike expectations after US retail sales data release,as its response to US jobs data was indifferent.

The 50-share NSE Nifty also ended above the 8,200-level by surging 108.50 points or 1.34 per cent to 8,235.45 after shuttling between 8,254.95 and 8,089.80 intra-day.

The rise in the BSE barometer was supported by gains in Axis Bank that climbed 4.95 per cent, followed by ICICI Bank at 2.88 per cent and SBI 2.52 per cent.

Sector-wise, BSE bankex gained the most by rising 2.64 per cent, followed by Capital Goods 1.81 per cent, auto 1.72 per cent and power 1.29 per cent.

Of 30-Sensex shares, 22 stocks ended in the positive zone.

The broader markets also rose as the mid-cap and small-cap indices rose 1.59 and 0.92 per cent, respectively.

In Asian region, other markets ended mixed while European stocks were higher in their early trade as the sell-off in global bonds abated and growth picked up in the euro area, supported the sentiment here.

Stocks rise, German yields dip before bond sale

Reuters – European and Asian shares advanced on Wednesday as expectations of further monetary stimulus in China offset another mixed bag of data from some of the world’s major economies.

The best growth reading out of France in two years added to signs, following better figures from Spain, that some of Europe’s weaker southern economies are picking up, though the German number missed forecasts.

Much attention will focus on auctions of German and Italian government debt. A radical repricing of Bunds last month was the starting point for a rout that has spread across the world’s major bond markets and raised broader financial concerns.

Bond traders and analysts say the sales on Wednesday would have to draw hefty demand to begin to stabilise the situation.

“Today is the big test for EGBs,” said Peter Chatwell, a strategist at Mizuho.

Europe’s main stock markets were all higher, with Paris leading with a more than 1 percent gain. Germany’s DAX index gained 0.9 percent.

German 10-year bond yields, which have jumped around half a percentage point from record lows hit in mid-April, fell 2 basis points to 0.66 percent. The euro gained a third of a percent on the dollar to $1.1250.

“I think people have started to do some bottom fishing already,” Tradition broker Mike Reuter said. “I think between now and Friday you’ll see the (stock) market up unless there is some major piece of news.”

Earlier, Asian shares advanced as investors focused on hopes of further stimulus from Beijing to prevent a sharper slowdown in the world’s second-largest economy.

MSCI’s broadest index of Asia-Pacific shares outside Japan was off session highs but still up 0.3 percent.

“Expect the pace of easing to be increased, or at least maintained, by the authorities through the year, in order for the GDP target of 7 percent to be attained,” said Chester Liaw, economist at Forecast Pte in Singapore.

The People’s Bank of China cut its benchmark one-year lending and deposit rates by 25 basis points on Sunday, the third cut in six months. Economists expect more cuts to follow.

Japan’s Nikkei stock index erased early losses and ended up 0.7 percent, shrugging off a weak cue from Wall Street.

Crude oil added to its overnight gains as the weaker dollar lifted commodities denominated in the currency, and after OPEC raised slightly its forecast for world oil demand growth.

Brent was up 0.6 percent at $67.27 a barrel after rallying 3 percent on Tuesday, while U.S. crude rose another 1 percent to $61.35.

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