Benchmarks log fresh closing highs ahead of exit poll results

After scaling all-time closing highs in previous session, Indian equity benchmarks extended their jubilation on Monday with bull taking full control over the session ahead of exit poll results. Sentiments remained up-beat since beginning, as key bourses made a decent start and there appeared not even an iota of profit booking in the session with benchmarks fervently gaining strength to strength as investors continued hunt for fundamentally strong stocks. Frontline indices not only extended their rally for third straight day but also recorded their fresh all time closing high which they had witnessed never before, settling comfortably above their crucial 7,000 (Nifty) and 23,500 (Sensex) bastions as sentiments remained sanguine at the prospect of a Narendra Modi-led, stable government after May 16. The exit polls are expected to trickle in post 6:30 pm today.

Some support also came after India’s trade deficit contracted to $10.01 billion in April as compared to $10.51 billion in the previous month and $17.67 billion reported in the corresponding month of the previous year. Further, foreign institutional investors (FIIs) remaining net buyers in Indian equities and buying shares worth a net Rs 1268.78 crore in the previous session, too aided the sentiments. Though, investors remained little cautious ahead of Consumer Price Inflation (CPI) data and Industrial Production data due later in the session, the latest one’s before the RBI’s next monetary policy on June 3. While, CPI is estimated to have quickened to 8.48 per cent in April from 8.31 per cent in March, factory output in March probably contracted for the fifth time in six months.

On the global front, European counters were trading mostly in the green in early deals, with mining shares advancing after an upgrade of the sector. However, Asian shares ended mixed as investors remained cautious due to re-emergence of tensions in Ukraine and Russia.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated in the rally. Meanwhile, public sector oil marketing companies (OMCs) viz. BPCL, HPCL and IOC all edged higher on report of hiking diesel prices within 24 hours.

The NSE’s 50-share broadly followed index Nifty surged by over one hundred and fifty points to end above its psychological 7,000 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex zoomed over five hundred and fifty points to surpass the psychological 23,550 mark. Broader markets too traded with traction and ended the session with gain of over half a percent. The market breadth remained in favour of decliners, as there were 1,408 shares on the gaining side against 1,440 shares on the losing side while 165 shares remain unchanged.

Finally, the BSE Sensex rushed by 556.77 points or 2.42%, to 23551.00, while the CNX Nifty surged by 155.45 points or 2.27% to 7,014.25.

The BSE Sensex touched a high and a low of 23572.88 and 23008.65, respectively. The BSE Mid cap index was up by 0.73%, while the Small cap index rose by 0.51%.

The top gainers on the Sensex were Coal India up by 7.04%, HDFC Bank up by 4.59%, Tata Motors up by 4.09%, Hero MotoCorp up by 4.01% and Maruti Suzuki up by 3.99%. While Sun Pharma down by 1.73%, Cipla down by 1.26%, Hindalco Inds down by 0.52%, Wipro down by 0.14% and TCS down by 0.07% were the only losers in the index.

On the BSE Sectoral front, PSU up by 3.18%, Oil & Gas up by 3.07%, Power up by 2.98%, Auto up by 2.88% and Capital Goods up by 2.78% were the top gainers, while Healthcare down by 0.81% was the only loser in the space.

Meanwhile, concerned over the prevailing economic slowdown in the country, the industry chamber Assocham has said that the new government should divest stake in the top 10 cash-rich PSUs to raise around Rs 1 lakh crore, which can be used to provide much-needed push to economic growth and tide over revenue shortfall. 

Assocham President Rana Kapoor also said that the new government formed after the general election should take advantage of robust state of domestic stock markets helped by heavy inflow of funds from the foreign institutional investors (FIIs). The disinvestment at high level in cash-rich PSUs will help the new government to improve its revenue, which faces constraint of lower tax earnings because of slowdown in economy. The top 10 PSUs in which the government can divest 10 percent or more stake are ONGC, Coal India, State Bank of India, NTPC, IOC, NMDC, Power Grid Corporation, BHEL, GAIL and Bank of Baroda.

Industry body further noted that the combined market capitalisation of the top 10 PSUs has exceeded Rs 11 lakh crore and if a stable government is formed at the Centre, the combined the m-cap of these PSUs is expected to go up by another 15-20 percent, reflecting an opportunity to new government for better realizations from minority divestment.

In the previous fiscal year, the Government was able to disinvest only around Rs 16,000 crore as against the set target of Rs 40,000 crore mainly on account of subdued economic conditions. The government had cut Rs 79,790 crore from the budgeted Plan expenditure of Rs 5,55,532 crore for financial year 2013-14 amid concerns over burgeoning fiscal deficit. India’s fiscal deficit is likely to widen at 4.6% of GDP in the previous fiscal as compared to 4.89% of GDP in FY13.

The CNX Nifty touched a high and low of 7,020.05 and 6,862.90 respectively.

The top gainers of the Nifty were Coal India up by 6.11%, Power Grid Corporation of India up by 5.29%, Grasim Industries up by 4.75%, HDFC Bank up by 4.64% and Hero MotoCorp up by 4.14%. On the other hand, United Spirits down by 2.72%, Sun Pharmaceuticals Industries down by 1.46%, Cipla down by 1.12%, Hindalco Industries down by 1.01% and Jindal Steel & Power down by 0.65% were the top losers.

Most of the European markets were trading in green, Germany's DAX was up by 0.55% and United Kingdom's FTSE 100 was up by 0.22% while, France's CAC 40 was down by 0.04%.

The Asian markets concluded Monday’s trade on a mixed note, as investors took their lead from record highs on Wall Street. Bank Indonesia survey showed that Indonesian consumers were less optimistic in April due to slowing domestic consumption in Southeast Asia’s largest economy. The consumer confidence index fell to 113.9 from the previous reading of 118.2. Indonesia’s two-year bonds gained, driving the sharpest drop in the yield in three weeks, as a narrower current-account deficit boosts bets the central bank is finished raising borrowing costs. China’s new yuan-denominated lending amounted to 774.7 billion yuan in April, less than 1.05 trillion yuan in March. On a year-on-year basis, the volume was down 17.6 billion yuan. Malaysian Industrial Production fell to a seasonally adjusted annual rate of 4.3%, from 6.7% in the preceding month. Japan’s Economy Watchers Current Index fell to a seasonally adjusted 41.6, from 57.9 in the preceding month while Japan’s Current Account fell to a seasonally adjusted -0.78T, from -0.04T in the preceding month.