Post Session: Quick Review

Local equity markets, after taking a breather in previous session of trade, resumed its up-trend to log record closing high levels on Thursday thanks to bargain buying activities by funds and retail investors, which lifted Sensex and Nifty above the crucial 25,000 and 7,450 levels respectively, with gains of over 3/4th of a percent. After witnessing consolidation in previous session and lull in the early deals, markets gained momentum in the second half of the session despite cautious start of European counterparts. Nevertheless, broader indices yet again stole the limelight, with both smallcap and midcap indices outperforming larger counterparts and ending with gains of over a percent. Expensive valuations of large-cap companies drove buying interest towards broader counterparts. Sentiments also got a boost from Meteorological Department (IMD)’s forecast of conditions turning favorable for the monsoon onset in about twenty four hours. Additionally, hopes that good foreign capital inflows into equities also underpinned market-participants to go long on equities.

On the global front, Asian pacific shares settled on a positive note ahead of US job figures. Non-farm payrolls are expected to show that the US economy added 218,000 jobs in May, down from the 288,000 created in April. On the flip side, European shares were reeling under pressure on Thursday ahead of a European Central Bank meeting that is expected to yield fresh measures to spur euro-zone growth. Further, there is speculation that it could introduce a number of unconventional measures, such as lowering the deposit rate to negative levels and begin asset purchases similar to that carried out by the Fed.

Closer home, much of the support was rendered by stocks belonging from Metal, Power and Oil and Gas counters which were the pillars of market’s strength, while those from Banking counter were the lone loser on the BSE sectoral indices. In non-sectoral gauge activity, shares in fertilizer companies, Chambal Fertilisers and Chemicals and National Fertilizers surged on hopes that new government will soon clear its 2013/14 outstanding subsidy payments for the sector. Additionally, cement stocks, Andhra Cement, India Cements, Heidelberg Cements and Dalmia Bharat rallied on price hikes ranging from 3-30% across most regions. Besides, PSU OMCs gained as US crude oil futures fell for a second consecutive session inventories of gasoline and distillate fuels increased in the United States, the world's biggest oil consumer. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 2163: 863, while 100 scrips remained unchanged. (Provisional)

The BSE Sensex surged 213.68 points or 0.86% to settle at 25019.51. The index touched a high and a low of 25044.06 and 24644.88 respectively. Among the 30-share Sensex, 22 stocks gained, while 8 stocks declined. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.01% and Small cap index was up by 1.42%. (Provisional)

On the BSE Sectoral front, Metal up by 3.33%, Power up by 1.96%, Oil and Gas up by 1.96%, PSU up by 1.55% and FMCG up by 1.49% were the gainers while, Bankex down by 0.39% was the lone loser in the space. (Provisional)

The top gainers on the Sensex were SSLT up 6.60%, Hindalco up by 5.98%, HUL up by 4.90%, Tata Power up by 4.35% and Tata Steel up by 3.96%. On the flip side, the key losers were M&M down by 1.40%, HDFC Bank down by 1.35%, Cipla down by 0.85%, ICICI Bank down by 0.72% and Dr Reddys Lab down by 0.65%. (Provisional)

Meanwhile, in order to remove practical difficulties, ambiguities and anomalies arising out of the partial and hurried implementation of the new Companies Act of 2013, the Confederation of Indian Industry (CII) urged the new government to review the new Companies Act and the norms issued under it. CII President Ajay Shriram has said that the rush to notify the new company law has introduced disruptive features, making it harder for corporates to ensure compliance.

CII President said that many new concepts have introduced in the legislation for the first time which could be implemented over the period of time. Meanwhile, final set of company act norms, which was released in the last week of March, required implementation from April 1. By adding further, he said that India already ranks very low in terms of ease of doing business and the new company law will further add to the cost and complications of doing business. An unclear and cumbersome Companies Act would further impede business sentiment in the country, which is looking to improve its image after a series of setbacks like retrospective changes to tax laws, poor economic conditions.

Further, Ajay Shriram has asserted that owing to the absence of any unambiguous clarifications on norms from government front, companies are resorting to different interpretations of the provisions. Furthermore, there is no uniform interpretation of even items of ordinary business such as appointment of Independent Directors.

India VIX, a gauge for markets short term expectation declined 0.75% at 15.44 from its previous close of 15.56 on Wednesday. (Provisional)

The CNX Nifty gained 75.40 points or 1.02% to settle at 7,477.65. The index touched high and low of 7,484.70 and 7,360.50 respectively. Out of 50 stocks in Nifty, 38 stocks ended in the green and 12 in red. (Provisional)

The major gainers of the Nifty were BPCL up 7.17%, SSLT up by 6.65%, Hindalco up by 6.10%, HUL up by 5.21% and Cairn up by 4.74%. On the flip side, the key losers were M&M down by 1.42%, HDFC Bank down by 1.22%, Indusind Bank down by 1.05%, Cipla down by 0.92% and Bank of Baroda down by 0.86%. (Provisional)

Most of European markets were trading mostly in the red; UK’s FTSE 100 down by 0.25% and Germany’s DAX down by 0.08%, however France’s CAC 40 was up by 0.08%.

The Asian markets concluded Thursday’s trade mostly in green, with investors keeping an eye on European Central Bank policy decision. Volatility in Chinese stocks has fallen to the lowest level on record as investor interest in equities declines and trading volumes slump amid a slowdown in the nation’s economic growth. Stronger foreign and domestic demand probably helped to stabilize China’s economy in May, boosting growth in exports, factory production and retail sales. Indonesia’s rupiah declined the most since April on concern a deteriorating trade balance will spur capital outflows from the nation’s financial markets. Taiwanese CPI fell to a seasonally adjusted annual rate of 1.61%, from 1.65% in the preceding quarter while Philippines CPI rose to a seasonally adjusted annual rate of 0.5%, from 0.4% in the preceding quarter.