Markets scale fresh record highs; Nifty surpasses 7,550 mark

Extending their previous session rally, boisterous benchmarks showcased an enthusiastic performance on Friday with bull taking full control of the session as investors continued hunt for fundamentally strong stocks. Earlier, markets after a gap-up opening traded in very tight-band for most part of the day but massive buying in last leg of trade mainly underpinned markets to clock record closing high. Sentiments remained up-beat on report that foreign institutional investors (FIIs) bought shares worth a net Rs 1368.97 crore on June 5, 2014, as per provisional data from the stock exchanges. Meanwhile, monsoon rains reached India’s southern coast of Kerala today, offering relief to farmers eagerly waiting for the start of the wet season that is crucial for their summer crops.

Appreciation in Indian rupee too aided sentiments. The rupee was trading at 59.19 at the time of equity markets closing as compared to its previous close of 59.33. Some confidence also came after Finance Minister Arun Jaitley, in a pre-Budget consultation with agriculturists, assured them that despite resource constraints, the Government would try its best to boost the sector.

Northward journey got extended after European markets made a positive opening with CAC, DAX and FTSE were trading higher in early deals. Sentiments remained up-beat 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. However, Asian counters ended mostly in the red as investors remained on sidelines ahead of monthly U.S. jobs data and slew of Chinese economic data like trade, inflation, urban investment, industrial output and retail sales in the coming week.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Frontline indices ended the session near their day’s high levels with Sensex settling just shy of its crucial 25,400 levels, while Nifty ended above its psychological 7,550 mark, as investors took to hefty across the board buying.

Meanwhile, stocks related to sugar space remained on buyers’ radar after the government said that it was examining the possibility of giving additional interest-free loans of Rs 4,400 crore to cash-starved sugar mills to clear dues to cane farmers. Moreover, export oriented stocks too traded jubilantly with Federation of Indian Export Organisations (FIEO) saying that India’s exports are expected to touch $360 billion in the current fiscal from $312.35 billion in 2013-14. Additionally, the PSU oil marketing companies too edged higher during the trade, as an expert committee has recommended the reinstatement of LPG subsidy transfer scheme after streamlining some processes as it helps prevent pilferages.

The NSE’s 50-share broadly followed index Nifty rose by over hundred points to end above the psychological 7,550 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over three hundred and seventy points to finish near the psychological 25,400 mark. Broader markets too were traded with traction throughout the trade and ended the session with a gain of over one and a half percentage points. The market breadth remained in favor of advances, as there were 2,144 shares on the gaining side against 959 shares on the losing side while 91 shares remain unchanged.

Finally, the BSE Sensex soared by 376.95 points or 1.51%, to 25396.46, while the CNX Nifty surged by 109.30 points or 1.46%, to 7,583.40.

The BSE Sensex touched a high and a low of 25419.14 and 25129.76, respectively. The BSE Mid cap index was up by 1.59%, while the Small cap index rose by 1.56%.

The top gainers on the Sensex were ONGC up by 10.57%, Gail India up by 7.52%, Hero MotoCorp up by 3.68%, RIL up by 2.97% and HDFC up by 2.96%. While SSLT down by 2.53%, Infosys down by 1.26%, TCS down by 1.02%, Hindalco Inds down by 0.32% and Bharti Airtel down by 0.04% were the top losers in the index.

On the BSE Sectoral front, Realty up by 5.02%, Oil & Gas up by 4.82%, PSU up by 3.08%, India Infrastructure Index up by 2.06% and Bankex up by 1.65% were the top gainers, while IT down by 0.63%, Metal down by 0.34% and Teck down by 0.29% were the only loser in the space.

Meanwhile, the Reserve Bank of India (RBI) has allowed overseas investors including FPIs and NRIs to invest up to 26 percent in insurance and allied activities through the automatic route. Foreign Portfolio Investors (FPIs) include all foreign institutional investors (FIIs), their sub-accounts and qualified foreign investors (QFI). However, overseas companies bringing in foreign investment, will have to obtain necessary licence from the Insurance Regulatory and Development Authority (IRDA) for undertaking prescribed activities.

Earlier, foreign investments under the automatic route were allowed only in insurance companies. Under the new norms FPIs and NRIs can invest up to 26 percent in insurance and allied activities such as broking, third party administrators and surveyors.

Over the past few years, the government has been liberalizing the foreign investment policy to attract maximum FDI into the country, which is crucial for economic development. The government has relaxed FDI norms in around 12 sectors, which include telecom, tea, pension and petroleum and natural gas among others. Despite government's various efforts to increase FDI, foreign investment during April-February FY14 has declined, which reflects the need to take more measures to improve the business environment in the country.

 The CNX Nifty touched a high and low of 7,592.70 and 7,497.65 respectively.

The top gainers of the Nifty were ONGC up by 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 other hand, SSLT down by 2.64%, NMDC down by 1.39%, Infosys down by 1.35%, TCS down by 0.91% and Hindalco Industries down by 0.91% were the top losers.

The European markets were trading in green, France's CAC 40 was up by 0.38% Germany's DAX was up by 0.30% and United Kingdom's FTSE 100 was up by 0.32%.

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.