Post Session: Quick Review

Local equity markets rose to their second consecutive record-breaking highs on Friday as blue-chips witnessed frenzied buying activities by market-participants, which initiated fresh bets on last trading session of the week, largely underpinned by heavy FII buying and positive global cues. Additionally, sentiment were bolstered by reports suggesting monsoon reaching the coast of Kerala on Friday, marking the start of the wet season which is crucial for their summer crops. Logging record closing high levels for yet another session, both Sensex and Nifty settled above the psychologically crucial 25,350 and 7,550 levels respectively, with gains of over 1.50%. Besides, broader indices also performing in line with frontline indices settled with gains of similar magnitude.

On the global front, Asian markets, shrugging off a positive start, ended mostly lower on Friday as investors remained on the sidelines and shifted attention quickly towards to the US payrolls report due later on Friday where the outcome is considered even more uncertain than usual. The jobless rate is seen climbing one-tenth of a percentage point to 6.4 percent from April's more than five-year low, with street expecting the addition of 218,000 jobs last month, down from April's 288,000 addition. On the flip side, periphery blue chips led European shares towards their eighth straight week of gains on Friday, continuing to see uplift after the European Central Bank eased policy further.

Closer home, in the extremely sanguine session of trade, where in benchmarks did not once look back after making a positive start, much of the momentum was witnessed during late hours of trade. In broad-based buying session of trade, all the sectoral indices on BSE ended in green, with exceptions being stocks from Information Technology, Metal and Technology counters. On the flip side, stocks from Realty, Oil and Gas and PSU counters were the pockets of strength. Oil and gas stocks were on fire today on reports that the government could soon be taking a decision on the gas price hike issue in the next few weeks. Besides, Sugar stocks edged higher on reports of government mulling a proposal for providing additional interest-free loans of Rs 4,400 crore, over the granted Rs 6,600 crore to cash-starved sugar mills to clear dues to cane farmers.  The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 2132: 966, while 96 scrips remained unchanged. (Provisional)

The BSE Sensex surged 376.95 points or 1.51% to settle at 25396.46. The index touched a high and a low of 25419.14 and 25129.76 respectively. Among the 30-share Sensex, 25 stocks gained, while 5 stocks declined. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.59% and Small cap index was up by 1.56%. (Provisional)

On the BSE Sectoral front, Realty up by 5.02%, Oil and Gas up by 4.82%, PSU up by 3.08%, Infrastructure up by 2.06% and Bankex up by 1.65% were the gainers while, IT down by 0.63% and TECk down by 0.29% were the only losers in the space. (Provisional)

The top gainers on the Sensex were ONGC up 10.04%, GAIL up by 7.49%, Hero MotoCorp up by 3.96%, RIL up by 3.07% and HDFC up by 3.06%. On the flip side, the key losers were SSLT down by 2.69%, Infosys down by 1.41%, TCS down by 1.07%, Hindalco down by 0.77% and Coal India down by 0.28%. (Provisional)

Meanwhile, the government is mulling a proposal for providing additional interest-free loans of Rs 4,400 crore, over the granted Rs 6,600 crore to cash-starved sugar mills to clear dues to cane farmers. Further, the food ministry is also looking at raising the import duty for sugar from 15% to 40%, to curb cheap imports and contemplating a proposal for increasing ethanol blending in petrol to 10% as an effort to improve the liquidity of mills. It might also consider fixing the export incentive on raw sugar for two years against the current practice of revising it every two months.

The bailout package for sugar industry was discussed in the meeting attended by Transport Minister Nitin Gadkari, Women and Child Development Minister Maneka Gandhi, Agriculture Minister Radha Mohan Singh and others.

In the inter-ministerial panel meeting, government broadly agreed to work on a mechanism to enable state governments to bear the burden of fixing a higher state advised price (SAP) over the price determined by the Centre. The previous United Progressive Alliance (UPA) government had decided to give an export incentive of Rs 3,300 per tonne on raw sugar to bail out millers suffering losses due to the falling retail price and rising cane purchase cost. The incentive was part of a package determined by the previous government, which summed up to Rs 6,600 crore.

Currently, sugarcane arrears stand at about Rs 11,000 crore across the country, with the maximum of Rs 7,200 crore in Uttar Pradesh, according industry body, Indian Sugar Mills Asssociation (ISMA), which also highlighted that banks have disbursed about Rs 3,500 crore loans of the total Rs 6,600 crore approved by the government.India VIX, a gauge for markets short term expectation surged 3.46% at 15.98 from its previous close of 15.44 on Thursday. (Provisional)

The CNX Nifty gained 106.30 points or 1.42% to settle at 7,580.40. The index touched high and low of 7,592.70 and 7,497.65 respectively. Out of 50 stocks in Nifty, 40 stocks ended in the green and 10 in red. (Provisional)

The major gainers of the Nifty were ONGC up 10.56%, GAIL up by 7.66%, DLF up by 6.40%, Hero MotoCorp up by 4.17% and Kotak Mahindra Bank up by 3.86%. On the flip side, the key losers were SSLT down by 2.64%, NMDC down by 1.39%, Infosys down by 1.35%, TCS down by 0.91% and Hindalco down by 0.91%. (Provisional)

Most of European markets were trading in the green; UK’s FTSE 100 up by 0.27%, Germany’s DAX up by 0.21% and France’s CAC 40 was up by 0.12%.

Asian equity indices ended the session mostly in the red on Friday as investors remained on sidelines ahead of monthly U.S. jobs report scheduled to be released later in the day. Meanwhile, Chinese Shanghai ended lower by over half a percent despite IMF saying that country’s policy makers still have tools to keep economic growth at a medium to high level. Moreover, traders pulled money out of the market, awaiting direction from major economic data like trade, inflation, urban investment, industrial output and retail sales in the coming week. However, losses in the region remained capped after the European Central Bank (ECB) announced its decision to cut its benchmark interest rate by 10 basis points to 0.15 percent and also lowered its deposit rate to negative 0.1 percent.