Jubilation continues on D-street; bourses end at fresh all time closing high

Jubilation continued on Dalal Street with both the frontline indices snapping the session above their psychological 25,550 (Sensex) and 7,650 (Nifty) levels, ending at fresh all time closing high levels on firm global cues coupled with hopes of wide-ranging reforms by the new government. Boisterous benchmarks once again showcased an enthusiastic performance with investors getting support from report that foreign institutional investors (FIIs) bought shares worth a net Rs 1283.04 crore on Friday as per provisional data from the stock exchanges.

Some support also came after President Pranab Mukherjee in a joint session of parliament said that the new government will pursue a broad economic reform agenda focused on job creation through public and private investment that also makes containing inflation its top priority. Some comfort also came from Minister of Commerce Nirmala Sitharaman’s statement that the rising Current Account Deficit (CAD) and galloping prices are the issues which will be tackled on an urgent basis by the government and Finance Minister will announce important measures to reduce the CAD and curb rising prices.

Supportive cues from US markets provided lead to local markets and sentiments remained up-beat on getting good jobs data on Friday, while the unemployment rate held steady, lower than expected. Asian markets ended mostly in the green on the back of better-than-expected Chinese exports data. Meanwhile, Japanese Nikkei edged higher after the country’s economy expanded by more than anticipated, 1.6% in the first quarter. European counters too traded mostly in the green in early deals on Monday.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. On the currency front, the Reserve Bank of India was spotted buying dollars via state-run banks starting around 58.99-59.00, continuing its heavy intervention to curb strength in the rupee. The rupee was trading at 59.08 per dollar at the time of equity markets closing as compared to Friday’s close of 59.17 per dollar. Meanwhile, shares of real estate companies edged higher after President Pranab Mukherjee in his joint address to the Parliament said that the government proposes proper housing to all citizens by 2022.

Stocks related to railway such as Texmaco Rail and Engineering, Kalindee Rail Nirman, Titagarh Wagons, Kernex Microsystems and Hind Rectifiers remained on buyers’ radar after Pranab Mukherjee said that the government will launch a diamond quadrilateral project of high-speed trains. Additionally, fertilizer stocks, RCF, Chambal fertilizers and Tata Chemicals were on investor’s radar after reports suggested of Government planning urea price hike to curb fertiliser subsidies.

The NSE’s 50-share broadly followed index Nifty surged by over seventy points to end comfortably above its psychological 7,650 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged over one hundred and eighty points to surpass the psychological 25,550 mark. The broader markets too traded jubilantly throughout the session and ended the session with a gain of around two percentage points. The market breadth remained in favour of advances, as there were 2307 shares on the gaining side against 778 shares on the losing side while 82 shares remain unchanged.

Finally, the BSE Sensex soared by 183.75 points or 0.72% at 25580.21, after trading in a range of 25496.84 and 25644.77, while CNX Nifty settled at 7654.60, up by 71.20 points or 0.94% after trading in a range of 7580.25 and 7673.70.

The BSE Mid cap index was up by 1.47%, while Small cap index up by 2.13%.   

The top gainers on the Sensex were, Bajaj Auto up by 5.48%, Coal India up by 5.22%, L&T up by 3.51%, Tata Power up by 2.53% and Tata Steel up by 2.49%. On the flip side, ONGC down by 2.26%, Hindustan Unilever down by 1.24%, SBI down by 1.18%, Axis Bank down by 0.71%, and Infosys down by 0.66% were the top losers in the index.

On the BSE Sectoral front Realty up by 5.61%, Capital Goods up by 2.33%, India Infrastructure Index up by 2.30%, Power up by 2.15% and Consumer Durables up by 1.82%, were the top gainers, while Oil & Gas down by 0.36% and Bankex down by 0.16% were the only loser in the space.

Meanwhile, taking stock of the prevailing economic condition, Finance Minister Arun Jaitley has underlined the need to improve the business climate and reduce the cost of doing business for reviving country’s investment cycle. He also took a note of recent improvement in vital macroeconomic parameters such as narrowing fiscal deficit, reduction in the current account deficit and increase in forex reserves.

In a wide-ranging interaction with financial sector regulators, including RBI’s Governor Raghuram Rajan and SEBI’s chief U. K. Sinha, which was part of an exercise undertaken by the Minister to consult various sectoral regulators ahead of the budget presentation next month, FM deliberated upon the current financial and economic indicators, and on suggestions any regulator had with regard to the forthcoming policies of the government.

Insurance Regulatory and Development Authority (IRDA)’s Chairman T. S. Vijayan, Forward Markets Commission (FMC) head Ramesh Abhishek and PFRDA’s officiating Chairman R. V. Verma, besides senior Finance Ministry officials, including Finance Secretary Arvind Mayaram, Secretary, Department of Financial Services, G. S. Sandu, were among those who were present in the meeting. Meanwhile, other players at the 11th meeting of the Financial Stability and Development Council (FSDC) were from the financial sector such as ICICI Securities CEO Anup Bagchi, Axis Direct CEO Nilesh Shah, JPMorgan Chase CEO Kalpana Morparia and Nimesh Kampani of JM Finacial.

Further, reaffirming the government’s commitment to keep finances in check, the Finance Minister stated that he was against slackening the vigil in the area of fiscal consolidation, while on report released by PJ Nayak Committee’s governance of banks, he said that the government is yet to apply its mind on these subjects.

The top gainers of the Nifty were Grasim up by 11.41%, Power Grid up by 7.1%, Bajaj-Auto up by 5.56%, Coal India and Asian Paint up by 4.86%. On the other hand, 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.

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%.

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.