Markets hits life-time high levels; rallies around a percent

Witnessing hectic buying since early deals, local equity markets were trading at fresh life-time high levels after Finance Minister Arun Jaitley's commented that 'mindless populism' in policymaking needed to be checked stoke expectations of a pragmatic budget on July 10. Additionally, sentiments also got a lift after FM underscored that a high fiscal deficit and inflation were major challenges for India, which in turn triggered hopes that he could unveil fiscal consolidation measures in his first annual budget. Meanwhile, sentiments were also buttressed by positive global set-up. At day’s high, both Sensex and Nifty were trading above the crucial 25,750 and 7,700 levels respectively, with gains of close to a percent. Meanwhile, broader indices also following suite were up with gains in the range of 0.85%-1.05%.

Gains at Dalal Street were led by stocks from Infrastructure, Power and Metal counters, while stocks from Information Technology pivotal were the sole loser. Meanwhile, banking stocks were also up on renewed buying, with all private sector banks, like ICICI bank, IndusInd Bank and Yes Bank trading with gains of over a percent.  The market breadth on BSE was positive, out of 2,718 stocks traded, 1,784 stocks advanced, while 1022 stocks declined on the BSE.

The BSE Sensex is currently trading at 25770.07, up by 253.72 points or 0.99% after trading in a range of 25660.16 and 25789.42. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.89%, while Small cap index up by 1.05%.

The gaining sectoral indices on the BSE were Infrastructure Index up by 1.74%, Power up by 1.51%, Metal up by 1.38%, Consumer Durables up by 1.24% and Healthcare up by 1.17%. On the flip side, IT down by 0.04% was the lone losing index on BSE.    

The top gainers on the Sensex were SSLT up by 2.75%, Maruti Suzuki up by 2.16%, Coal India up by 1.86%, HDFC Bank up by 1.69% and M&M up by 1.66%. On the flip side, Hindalco Industries down by 0.11%, Infosys and Gail India down by 0.03%.

Meanwhile, Global rating agency Fitch has stated that India's economic growth will accelerate to 5.5 percent in the FY15. Fitch also revised the growth rate upward to 6.5% in FY16 from 6% projected earlier.

The rating agency noted that latest policy announcements by new government signal a strong intention to pursue reforms. However, Fitch added that budget 2014-15 will give more indications on the government's policy intention, while implementation of the measures will clarify the level to which growth can be boosted.

Fitch mentioned below normal monsoon as the single biggest concern for growth forecast of 5.5 percent for FY15. The rating agency mentioned that although weak monsoon is likely to hit already-high food inflation, recent government announcements on reforms in agriculture produce markets and food distribution fronts will help to cap rising retail inflation. Retail inflation recorded at 8.28% y-o-y in May as against 8.59% in April. 

Meanwhile, Fitch highlighted the need for bold reforms to boost economic growth. The agency highlighted that measure related to fiscal consolidation, farms productivity gains through reforms and the elimination of infrastructure bottleneck are likely to provide impetus to economy.

The CNX Nifty is currently trading at 7,705.00, up by 70.30 points or 0.92% after trading in a range of 7,677.30 and 7,711.50. There were 44 stocks advancing against 6 declining on the index.

The top gainers of the Nifty were SSLT up by 2.94%, MCdowell-N up by 2.68%, Maruti Suzuki up by 2.39%, Coal India up by 1.95% and HDFC Bank by 1.69%. On the flip side, HCL Tech down by 1.39%, Tech Mahindra down by 0.42%, Gail down by 0.17%, Infosys down by 0.11% and Hindalco Industries down by 0.03% were the major losers on the index.

Asian equity indices were trading in green; Nikkei 225 up by 0.29%, Taiwan Weighted up by 0.46%, Shanghai Composite up by 0.32%, Straits Times up by 0.48% and Hand Seng up by 1.20%. While, Jakarta Stock Index down by 0.02% was the only loser amongst Asian pack.

European shares got off to a positive start; with UK’s FTSE 100 adding 0.18% and Germany’s DAX adding by 0.16%. while, France’s CAC 40 index was down by 0.14%.