Post Session: Quick Review

Extending its record- breaking run, Indian equity markets amassing gains of over half a percent, settled past the psychologically crucial 25,550 (Sensex) and 7,600 (Nifty) levels respectively on broad-based buying activities by market-participants on continued hopes of wide-ranging reforms by the new Modi government. Addressing a joint sitting of Parliament, President Pranab Mukherjee listed priorities of the NDA government which included focusing on rural development, attracting foreign investments and taking India back to the path of economic growth.

These gains At Dalal Street also could be attributed to positive global set-up that underpinned market-participants to go long in local equities. In the extremely sanguine session of trade, markets traded from strength to strength and settled at day’s high. Meanwhile, broader indices continued their bull run and settled with gains in the range of 1.50%-2.15%. On the global front, basking in the glow of a record close on Wall Street, Asian markets touched their highest levels in nearly three years on Monday following upbeat jobs data in the US, firm GDP data from Japan and better-than-expected Chinese exports data. While, US jobs data on Friday showed that non-farm payrolls increased by 217,000 last month, bringing employment back to its pre-recession level, the Japanese economy expanded by more than anticipated 1.6% in the first quarter. Meanwhile, European stocks advanced, extending a six-year high, amid optimism the global economic recovery remains on track.

Closer home, all the sectoral indices on BSE settled in positive territory, except for stocks from Oil & Gas and Banking counters. On the flip side, stocks from Realty, Capital Goods and Infrastructure counters were the prominent gainers on the index. While, IT stocks rose after strong US job data for May 2014, Shares of power generation firms surged after President Pranab Mukherjee in his speech highlighted it was the aim of the government to substantially augment electricity generation capacity through judicious mix of conventional and non-conventional sources. Moreover, Capital goods and cement stocks rose after President Pranab Mukherjee unveiled that the government will chalk out an ambitious infrastructure development programme to be implemented in the next 10 years.

In non sectoral gauge activity, shares of rail stocks, namely, Titagarh Wagons, Kalindee Rail Nirman, Texmaco Rail and Engineering and Kernex Microsystems witnessed strong demand after President Pranab Mukherjee in his address to the Joint Session of Parliament today said that the government will launch a diamond quadrilateral project of high-speed trains.  Additionally, fertilizer stocks rallied in today’s trading session after reports suggested of government planning urea price hike by at least 10% in order to contain subsidy costs that are straining the budget. Besides, shares of Defense Equipment and Manufacturers, BEML, Walchandnagar Industries, Dynamatic Technologies and Pipavav Defense and offshore engineering zoomed after President underscored that government would liberalize foreign equity in defence production and will also encourage private investment in defence. The overall market breadth on BSE  is in the favour of advances which thumped declines in the ratio of 2312:769; while 72 shares remained unchanged.

The BSE Sensex settled at 25541.05, up by 144.59 points or 0.57% after trading in a range of 25496.84 and 25644.77. 22 stocks advanced against 8 stocks declining on the index.  (Provisional)

The broader indices too shut shop with massive gains; the BSE Mid cap index was up by 1.45%, while Small cap index up by 2.14%. (Provisional)

 The gaining sectoral indices on the BSE were Realty up by 5.67%, Capital Goods up by 2.28%, India Infrastructure Index up by 2.30%, Power up by 2.11% and Consumer Durables up by 1.87%. While, Oil & Gas down by 0.39%, Bankex down by 0.12% were the losing indices on BSE.  (Provisional)

The top gainers on the Sensex were Bajaj Auto up by 5.53%, Coal India up by 5.35%, L&T up by 3.51%, Tata Steel up by 2.49% and Tata Power up by 2.44%. On the flip side, ONGC down by 2.42%, Hindustan Unilever down by 1.17%, SBI down by 1.09%, Infosys down by 0.66% and Axis Bank down by 0.51% were the top losers. (Provisional)

Meanwhile, Foreign Direct Investment (FDI) in India’s services sector has declined by 54 percent to $2.22 billion during the financial year 14 as compared to $4.83 billion in the previous fiscal mainly due to the low foreign investment in hotel and tourism industries. Indian services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, represents around 60% share of the country’s GDP.

Overall foreign inflows into the country increased by 8 percent to $24.29 in the FY14 form $22.42 billion recorded in the FY13. Sectors that received highest inflows during FY14 include automobiles ($1.51 billion), telecommunications ($1.3 billion), pharmaceuticals ($1.27 billion) and construction development ($1.22 billion). Country wise, maximum FDI during the reported period was received from Singapore with $5.98 billion followed by Mauritius ($4.85 billion), UK ($3.21 billion) and Netherlands ($2.27 billion).

FDI is considered crucial for economic development of a country. India's economic growth stayed below 5 percent for the second year in a row at 4.7 percent during FY14. In order to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. The government has relaxed FDI norms in around 12 sectors which include telecom, tea, pension and petroleum and natural gas among others. Now, it has started exercise for allowing foreign investments in e-commerce, railways and defence sectors. Furthermore, India would require around $1 trillion in the 12th five year plan (2012-2017) to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

India VIX, a gauge for markets short term expectation surged 6.67% at 17.09 from its previous close of 15.98 on Friday. (Provisional)

The CNX Nifty settled at 7645.80, up by 62.40 points or 0.82% after trading in a range of 7580.25 and 7673.70. 35 stocks advanced against 15 stocks declining one’s on the index. (Provisional)

The top gainers on Nifty were Grasim up by 11.41%, Power Grid up by 7.10%, Bajaj-Auto up by 5.56%, Coal India up by 5.31% and Asian Paint up by 4.86% %. On the flip side, ONGC down by 2.54%, BPCL down by 2.17%, Hindustan Unilever down by 1.43%, SBI down by 1.23% and Infosys down by 0.77% were the top losers.  (Provisional)

Most of European markets were trading in the green; UK’s FTSE 100 up by 0.26% and Germany’s DAX up by 0.11%, however France’s CAC 40 was down by 0.04%.

The Asian markets concluded Monday’s trade mostly in green, with Japanese stocks extending last week’s gain, after data showed US payrolls exceeded their pre-recession peak for the first time in May. Japan’s economy grew at a quicker pace than estimated in the first quarter, as business spending increased more than previously reported. Gross Domestic Product (GDP) grew at an annualized 6.7% in the first three months of the year, faster than a preliminary 5.9%. The nation’s current-account surplus narrowed in April from a year earlier. Japanese Household Confidence rose to a seasonally adjusted annual rate of 39.3, from 37.0 in the preceding month. Japan’s Economy Watchers Current Index rose to a seasonally adjusted 45.1, from 41.6 in the preceding month. Business investment rose 7.6% from the previous quarter, revised up from a preliminary 4.9% increase. Consumer spending climbed 2.2% more than an initial estimate of a 2.1% gain.

China’s exports rose more than estimated in May, helping to cushion the world’s second-biggest economy from a deeper slowdown as an unexpected slump in imports highlighted risks to growth. Chinese Trade Balance rose to 35.92B, from 18.45B in the preceding month.