Post Session: Quick Review

The much awaited general election’s final results session turned out to be a day of celebration for Dalal Street, which led to local barometer gauges ending with gains of over 3/4 of percent and logging record high closing levels, despite bouts of profit-booking, which was expected at higher levels. Hefty buying which took place after counting trend suggested a landslide victory for BJP government, mainly led to fireworks at Indian equity markets. In the highly optimistic session of trade, some consolidation was witnessed prior to profit-booking and post the initial sprint, but the trade remained fairly sanguine on Friday, with both Sensex and Nifty closing near record high levels of 24,000 and 7,200 levels respectively. Meanwhile, broader indices too aggressively participated into the rally and went home with gains of over a percent. Politics clearly took centre stage at Dalal Street, with market-participants largely ignoring somber global cues and outperforming the regional counterparts.

On the global front, Asian stock markets ended mixed on Friday as investors locked in profits before the weekend, though Japanese stocks rose narrowly to clinch a sixth straight week of gains as technology firms advanced, while Chinese shares rebounded on bargain-buying after two days of losses. Meanwhile, European stocks dropped as investors awaited US reports on housing starts and consumer confidence and as they digested gloomy eurozone data showing anemic economic growth for the first quarter of the year. As per the Euro-stat data agency, Gross domestic product across the 18-nation eurozone grew by just 0.2 percent in the three months to March.

Closer home, while majority of the sectoral indices participated into the broad-based rally of the markets, stocks from IT, FMCG, Health Care counters proved out to be exceptions. On the flip side, Realty stocks followed by Bankex and PSU scrips turned out to be investors’ darling.  While, the entire banking pivotal was trading higher, state-run banks stocks soared on the plan of tapping capital markets after a new government takes office, who betting on a revival in credit demand would be giving these banks a chance to shore up battered balance sheets. In stock-specific action, shares of Adani group were on fire celebrating NDA possible win in the 16 Lok Sabha Election. While, Adani Enterprises jumped over 6.5%, Adani Power and Adani Ports and Special Economic Zone pocketed 1% gain. Adani Group stocks especially Adani Enterprises has been on a roll since the BJP announced Narendra Modi as its PM candidate for the 2014 Lok Sabha elections on September 13. The stock has been the clear winner, rallying as much as 250 per cent in a matter of just nine months.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1427:1376, while 161 scrips remained unchanged. (Provisional)

The BSE Sensex gained 216.14 points or 0.90% to settle at 24121.74. The index touched a high and a low of 25375.63 and 23873.16 respectively. Among the 30-share Sensex, 18 stocks gained, while 12 stocks declined. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.64% and Small cap index was up by 1.21%. (Provisional)

On the BSE Sectoral front, Realty up by 5.97%, Bankex up by 4.39%,  PSU up by 3.60%, Power up by 3.33% and Capital Goods up by 3.15% were the gainers while, IT down by 2.22%,  FMCG down by 1.85%,  Health Care down by 1.39%, Teck down by 1.27% and Consumer Durables down by 0.97% were the losers in the space. (Provisional)

The top gainers on the Sensex were SSLT up by 11.01%, SBI up by 5.92%, Axis Bank up by 5.68%, ICICI Bank up by 5.43% and BHEL up by 4.79% while, Tata Steel down by 4.68%, ITC down by 3.15%, Wipro down by 3.09%, Dr Reddys Lab down by 2.86% and Infosys down by 2.53% were the top losers in the index (Provisional).

Meanwhile, India’s fiscal deficit is likely to contain at 4.5% of GDP in the financial year 14, as compared to 4.89% of GDP in the FY13. The fiscal deficit figure at 4.5% of GDP is lower than the government’s revised estimates. The government in its interim Budget has estimated fiscal deficit at 4.6% of GDP at Rs 5.24 lakh crore and revenue deficits at 3.3% at Rs 3.70 lakh crore for FY14. The revenue deficit of the government too would be lower at 3.2% of GDP for FY14.

The fiscal deficit, which is the gap between expenditure and revenue, is expected to come down mainly on account of expenditure compression and higher realisation from the 2G spectrum auction. To contain fiscal deficit, Indian government has taken various measures including banning government departments for holding meetings in 5-star hotels among others to cut spending in non-critical areas. As per the Government’s fiscal consolidation roadmap, the deficit will be reduced to 4.2% in FY15 and 3.6% FY16. India’s fiscal deficit widened to a record high level at 4.89% of GDP in FY14.

High fiscal deficit has adverse impact on country’s economy as it leads to three macro economic problems such as a balance of payments crisis, high interest rates because of crowding out and high inflation owing to the currency depreciation.

India VIX, a gauge for markets short term expectation lost 33.92% at 24.29 from its previous close of 36.76 on Thursday. (Provisional)

The CNX Nifty gained 79.85 points or 1.12% to settle at 7,203.00. The index touched high and low of 7,563.50 and 7,130.65 respectively. Out of 50 stocks in Nifty, 36 stocks ended in the green and 14 in red.

The major gainers of the Nifty were SSLT up 11.05%, PNB up by 8.16%, BPCL up by 6.85%, DLF up by 6.50% and SBI up by 5.95%.  On the flip side, the key losers were Tata Steel down by 4.47%, ITC down by 3.30%, DR Reddy down by 3.09%, HCL Tech down by 2.97% and Wipro down by 2.83%. (Provisional)

European markets were trading in red; France’s CAC 40 was down by 0.12%, UK’s FTSE 100 was down by 0.12% and Germany’s DAX was down by 0.17%.

The Asian markets concluded Friday’s trade mostly in green, while Japan Nikkei closing in red owing to a stronger yen and following a sell-off on Wall Street. China will support the stable growth of foreign trade and job creation as businesses come under pressure to increase exports. Optimizing the foreign trade structure - including encouraging imports of technology and key parts, maintaining stable growth of goods trade and supporting services trade - is the central issue of a policy document issued by China’s Cabinet. Japan’s economy grew 1.5% in the January-March quarter from the previous one, posting its biggest expansion since July-September 2011, as consumer spending jumped ahead of an April 1 sales tax increase. Japan’s industrial production rose to a seasonally adjusted 0.7%, from 0.3% in the preceding month. Hong Kong GDP rose to a seasonally adjusted annual rate of 0.2%