Post Session: Quick Review

Resuming upswing after two consecutive sessions of decline, Indian equity markets puffing up hefty gains of close to 2%, ended little short of all time closing high levels, notably ahead of RBI’s second Bi-monthly Monetary Policy Statement for the year 2014- 15 on Tuesday. Street widely expects RBI to keep its repo rate unchanged at 8% and will closely monitor the tone of the central bank's policy review to gauge the forward guidance on rates and other economic indicators.

Meanwhile, in the extremely sanguine session of trade, local barometer gauges after getting a roaring start, did not once look back and rather kept steadily gaining ground to end near day’s high, which took Sensex and Nifty past the crucial 24,650 and 7,350 levels respectively. Meanwhile, broader indices too mirroring similar kind of enthusiasm ended higher with profits of around 2%.

Much of the bourses up-move was supported by gains of index heavyweight, Larsen & Toubro, which surged over 6% after reporting forecast-beating results on Friday. L&T reported 69% growth in net profit for the quarter ended March on the back of improved operational performance, higher sales and an exceptional income of Rs 484 crore from dilution of its stake in L&T Finance.

Overlooking Q4 GDP data, local equity markets also drew some sense of encouragement from May factory output data which pointed to improving market conditions among country’s manufacturer. On the macro-front, the HSBC India Manufacturing Purchasing Managers' Index (PMI), a measure of factory production, which is based on data from monthly survey of purchasing executives in over 500 manufacturing companies, stood higher at 51.4 in May from 51.3 in April, little higher reading above ‘50’ water shed mark that segregates growth from contraction.

Additionally, positive global cues also offered some support to the markets. On the global front, encouraging China factory data and another closing record on Wall Street lifted Asian equities on Monday. Reinforcing views that the world's second-largest economy is regaining momentum, China's factory activity expanded at the fastest pace in five months in May due to rising new orders. Meanwhile, European shares started the month positively on Monday, buoyed by strong economic data from China that helped to allay concerns about growth rates in the world's biggest metals consumer.

Closer home, all the sectoral indices on BSE settled in positive territory, except stocks from Fast Moving Consumer Goods and Healthcare counters. On the flip side, stocks from Capital Goods, Banking, Public Sector Undertaking and Banking counters were the flavor of the session. Banking stocks witnessed strong demand ahead of the Reserve Bank of India's (RBI's) bi-monthly monetary policy review on Tuesday, some PSU banks also hogged limelight after reports suggested of Finance Ministry considering the option of transferring all PSU banks equity into a holding company. Additionally, Public oil marketing companies stocks, BPCL, HPCL and IOC witnessed sharp uptick after diesel prices were hiked by 50 paise a litre, excluding state levies, the second increase in rates three weeks. Besides, Auto stocks also were on investor’s radar on reporting good monthly sales numbers. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 2001: 977, while 109 scrips remained unchanged. (Provisional)

The BSE Sensex gained 467.51 points or 1.93% to settle at 24693.35. The index touched a high and a low of 24709.09 and 24270.20 respectively. Among the 30-share Sensex, 23 stocks gained, while 7 stocks declined. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 2.16% and Small cap index was up by 2.01%. (Provisional)

On the BSE Sectoral front, Capital Goods up by 4.93%, PSU up by 3.42%, Banking up by 3.28%, Oil and Gas up by 2.85% and Infrastructure up by 2.75% were the gainers while, Healthcare down by 0.92% and  FMCG down by 0.82%, were the only losers in the space. (Provisional)

The top gainers on the Sensex were L&T up 6.40%, Bharti Airtel up by 5.52%, ONGC up by 5.17%, Tata Steel up by 4.42% and SBI up by 4.23%. On the flip side, the key losers were Dr. Reddys Lab down by 1.96%, Sun Pharmaceuticals down by 1.38%, ITC down by 1.32%, Wipro down by 0.83% and BTPC down by 0.63%. (Provisional)

Meanwhile, the new Government has outlined an ambitious Rs 25,000 crore plan to create a national waterway grid linking Brahmaputra, Mahanadi, Godavari and Ganga rivers. The eight-year project aims to ensure high water levels in rivers through the year by linking the Himalya Rivers with seasonal rivers, improving rivers role in crop irrigation and making them navigable.

Futher, the waterway grid will also help control floods as the excess water of rivers, which have strong seasonal flows, can be spread to other rivers. The proposed waterway grid will have road linkages to ports to facilitate faster movement of cargo. The transportation of goods through this network could save of about Rs 300 per tonne. The minister of roads and shipping has given an in-principle clearance to this eight-year project. Further, Inland Waterways Authority of the country has written to state governments to plan roads keeping in view waterways falling in their states.

Meanwhile, same move of inter-linking of rivers was also introduced by the NDA government under Atal Bihari Vajpayee during 2002. It had set up a task force to look into inter-linking of rivers and in the same year, the Supreme Court ordered the constitution of a committee to take the idea forward. However, the plan did not implement due to some concerns.

India VIX, a gauge for markets short term expectation gained 0.99% at 16.49 from its previous close of 16.33 on Friday. (Provisional)

The CNX Nifty gained 129.60 points or 1.79% to settle at 7,359.55. The index touched high and low of 7,368.60 and 7,239.50 respectively. Out of 50 stocks in Nifty, 37 stocks ended in the green and 13 in red. (Provisional)

The major gainers of the Nifty were L&T up 6.70%, BPCL up by 6.53%, Bharti Airtel up by 5.49%, ONGC up by 4.98% and Jindal Steel up by 4.77%. On the flip side, the key losers were HCL Tech down by 2.30%, Tech Mahindra down by 2.03%, Dr. Reddys Lab down by 1.86%, Sun Pharma down by 1.84% and ITC down by 1.51%. (Provisional)

Most of European markets were trading mostly in green; UK’s FTSE 100 was up by 0.26%, and Germany’s DAX was up by 0.24%, while France’s CAC 40 was down by 0.04%.

The Asian markets concluded Monday’s trade mostly in green, after a gauge of China’s manufacturing expanded at the fastest pace in five months and policymakers said they will cut the reserve requirement ratio for some lenders. Taiwan, China and Hong Kong markets remained shut for the trade today on account of the Dragon Boat Festival. The rupiah hit its weakest level in more than three months after Indonesia unexpectedly reported a trade deficit, leading losses among emerging Asian currencies as investors took profits on May’s gains amid broad strength in the dollar. China’s economy is projected to grow 7.3% this year, which would be the weakest pace since 1990. Expansion slowed to 7.4% in the first quarter from a year earlier, compared with 7.7% in the previous period. The official target for expansion is 7.5%. Chinese Manufacturing PMI rose to an annual rate of 50.8, from 50.4 in the preceding month.

Japanese capital spending rose to an annual rate of 7.4%, from 4.0% in the preceding quarter. Indonesian Inflation rose to a seasonally adjusted 7.32%, from 7.25% in the preceding month while Indonesian Trade Balance fell to a seasonally adjusted -1.97B, from 0.67B in the preceding month. Thai CPI rose to a seasonally adjusted annual rate of 2.62%, from 2.45% in the preceding month.