The benchmark BSE Sensex rose for the second straight day today by surging 363 points to close at over three-week high of 27,687.30 mainly led by gains in consumer durables, oil&gas and healthcare stocks.
Forecast of timely monsoon coupled with the government containing fiscal deficit at 4.00 per cent of the GDP for 2014-15 boosted the market sentiment, traders said.
Value-buying in recently beaten down blue-chip stocks too helped the market.
Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
Amidst low FII participation in the month, markets have moved ahead on expectation for a rate cut on June2nd. Global factors have to normalize since currency and FII inflow will be impacted. However, India’s valuation is not expensive to bring question of long-term trajectory. This can be explained by the active participation of DIIs, amidst news on MAT concern exists. But it is a fair question to know how much will the earnings growth for FY16 move, given the downgrade in FY15. In the week, market would move based on rate cut expectations and Q4 results of heavyweights.
The Sensex began on a strong footing at 27,416.97 and continued to rise to hit a high of 27,725.97 before settling 363.30 points or 1.33 per cent higher at 27,687.30.
This is the best closing since April 23 when Sensex had closed at 27,735.02.
The gauge has now gained 481.24 points in two sessions.
Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
The markets remained in positive zone, and buying was seen in the heavy weight stocks on the expectations that there will be timely monsoon and of possible interest rate cut early next month during the RBI policy meet. Also Nifty crossing above its 200 DMA provided strong support to the markets.
Nifty today closed at 8373 up around 111 points. The market breadth remained positive as there were seen 1664 stocks advancing against 1055 stocks declining. The Nifty volatility index, India VIX stood at 17.9025 down around 9.65%.
The mid cap and small cap index closed up around 0.98% and 0.97% respectively.
Barring the Realty sector which closed down around 0.20%, all other sectors closed in green. The major gainers for the day were Consumer Durables and Oil & gas sector, ended up around 2.16% and 2.09% respectively.
In the stocks’ front, the major gainers were ZEEL and Dr Reddy which closed up around 3.75% and 3.68% respectively whereas the selling was seen in Asian Paints and Tech Mahindra closed down around 3.25% and 0.68% respectively.
The FIIs were sellers in the cash market segment on 15 May 2015, Thursday, sold shares worth Rs 38.31 crore. The DIIs on the other hand were buyers on 15 May, bought shares worth Rs 563.60 crore in the capital markets segment.
After a weekly decline the European markets rebounded and the US index futures were trading mixed.
Tomorrow AIA Eng, Asahi Song, D-link, Dolphin offshore, Kalindee, Pidilite and Tata power may announce their earnings.
The broad-based NSE Nifty regained the 8,300-level by surging 111.30 points or 1.35 per cent to close at 8,373.65. It shuttled between 8384.60 and 8,271.95 intra-day.
Equity brokers said sentiments got bolstered after a forecast of a timely monsoon and expectations of a rate cut by the Reserve bank at its policy meet early next month following cooling inflation and slowing industrial growth.
Stocks of oil marketing companies such as HPCL, BPCL and IOC gained up to 3.93 per cent on the back of a hike in petrol and diesel prices last week.
Market View by Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
Sentiments & Technicals
The template for an RBI rate cut having been set by Friday’s economic release showing consumer inflation below 5%, and a five month low industrial production growth, markets have received more cheer from US data which has shown that Industrial production declined for the fifth straight month, pushing away the chances of a near term US rate hike.
Meanwhile, oil back at $60, supports concerns that the on going depreciation in rupee against US dollar could gain momentum, in the event of a rate cut. Indian rupee, though has strengthened, in the backdrop of US dollar falling for the fifth straight week.
Technically, the 8360 barrier in Nifty having given away, the potential for a vertical rise towards 8900 has risen, with short covering rallies expected to gain momentum, once above 8414. Alternatively, inability to float above 8360 could negate the upside potential.
Of 30-share Sensex pack, 27 stocks gained while three ended with losses.
Dr Reddy’s shares emerged as the top gainer by climbing 3.48 per cent to Rs 3,613.25, followed by GAIL 3.45 per cent.
Meanwhile, foreign portfolio investors (FPIs) sold shares worth Rs 38.31 crore Friday, as per provisional data.
Positive cues from global markets with Asian bourses ending mixed and a higher opening of the European markets also influenced trading sentiments here.
However, shares of Hero MotoCorp, NTPC and Coal India ended in the red.
Sectorally, consumer durables index gained the most by rising 2.16 per cent, followed by oil&gas (2.09 pc), healthcare (1.54 pc), infra (1.43 pc), FMCG (1.37 pc) and bankex (1.21 pc).
In tandem with overall trends, the BSE smallcap index rose 0.97 per cent, while midcap edged up by 0.98 per cent.
European stocks rise, led by energy shares; dollar rebounds
Reuters- European shares rose on Monday, with energy stocks in focus after a rise in oil prices, while the dollar lifted off four-month lows it had reached on concern over the U.S. economy.
The pan-European FTSEurofirst 300 stocks index opened down but quickly recovered and was last up 0.6 percent, led higher by commodity stocks.
Brent crude rose $1 to near $68 a barrel as violence in Irag and Yemen outweighed concerns about oversupply.
Asian shares had earlier fallen as investors fretted that weak U.S. data on Friday suggested growth was slowing in the world’s largest economy, though the U.S. S&P 500 index ended last week at a record closing high.
MSCI’s index of Asia-Pacific shares, excluding Japan, fell 0.7 percent, though Tokyo’s Nikkei closed 0.8 percent higher.
Britain’s FTSE 100 index, which includes several heavyweight mining stocks, was up 0.5 percent. However, BHP Billiton fell 4.7 percent after a cautious debut for its South 32 spin-off.
“The valuation of mining companies relative to the overall market is well below the average of the last 15 years, and we think that the picture has started to improve, said Christian Stocker, equity strategist at UniCredit in Munich.
Elsewhere, Volkswagen led Europe’s auto makers higher following an upgrade from a major bank.
The dollar rose 0.7percent. It had dropped to a four-month low against a basket of currencies on Friday, after the United States reported industrial production fell for a fifth straight month in April and consumer confidence declined more than expected.
U.S. inflation data, due on Friday, could be an important influence on the timing of the first Federal Reserve interest rate increase since 2006.
The euro, which touched its highest since early February on Friday, was down half a percent at $1.1395.
“Short-term I think we go to $1.1350 today and, if the U.S. inflation numbers are better than expected at the end of the week, we could push on to as low as $1.1250,” said Adam Myers, Head of European FX strategy at Credit Agricole in London.
The yen was down 0.4 percent at 119.71 per dollar. The New Zealand dollar fell 0.8 percent against the U.S. dollar after the government announced a new capital gains tax on property investments.
TREASURIES
U.S. Treasury yields, which fell after Friday’s data, rose on Monday. Ten-year yields were up 2.9 basis points at 2.17 percent.
In Europe, German 10-year yields were steady at 0.65 percent.
Yields on low-risk global bonds have risen sharply in recent weeks, led by German Bunds, as investors price out the prospect of deflation in the euro zone.
Greek two-year yields rose 140 bps to 22.52 percent as talks between the debt-stricken country and its international creditors remained deadlocked.
“With the Greek drama remaining noisy … and the upcoming data flow looking supportive … we expect a more constructive tone to prevail (for Bunds),” said Commerzbank strategist Rainer Guntermann.
Gold hit its highest since February in reaction to the U.S. data before pulling back to $1,227.86.
