Post Session: Quick Review

Local equity markets recovering from their last session’s slump resumed the gaining streak on Wednesday and ended the upbeat session with gains of over 1.25%, which lifted both Sensex and Nifty above psychologically crucial 27,250 and 8,200 levels respectively. Rate cut hopes over softer CPI and lower IIP data mainly bolstered the sentiment at Dalal Street. Retail inflation, as measured by the consumer price index (CPI), easing to four month low slowed to 4.87% year-on-year in April, lower compared to 5.17% in March, while slowing from nine months high level, the index for industrial output (IIP) for the month of March came in at 2.1%, lower compared to 5% in February. Nevertheless, positive global set-up also aided the optimistic milieu.  Meanwhile, the session also turned to be extremely buoyant for broader indices, which ended with gains of over 0.90-1.60%.

Notably, gains of markets came despite HSBC slashing Indian shares rating to underweight from overweight, saying that markets were over owned at a time when earnings were expected to show and the scope of interest rate cuts were diminishing.

On the global front, Asian stocks rose broadly on Wednesday, even as Chinese and Hong shares retreated slightly in response to weak Chinese data that served to highlight the fragile nature of the economy. Global bond markets steadied and oil extended overnight gains on signs the U.S. supply glut is easing, helping investors shrug off another sell-off on Wall Street. Meanwhile, European shares steadied early on Wednesday, helped by some calm returning to bond markets and by strong results from France’s Vivendi and Britain’s SABMiller.

Closer home, almost all the sectoral indices on BSE concluded into positive territory, barring Realty counter. Stocks from banking, Capital Goods and Auto counters were the prominent gainers of the session. In stock-specific activity, stocks of fertilizer companies surged by over 10 % after the Union Cabinet approved a new urea policy that aims to make the country self-sufficient in production in the next four years and ensure timely supply of the soil nutrient to farmers. Meanwhile, PSU banks stocks remained upbeat even after Moody's Investors Service highlighted that improvement in the credit profiles of Indian public-sector banks (PSBs) could be achieved only in the medium term, given their high levels of impaired loans and weak capital positions. The overall market breadth on BSE was in the favour of advances which thumped decliners in the ratio of 1648:1048; while 120 shares remained unchanged.

The BSE Sensex concluded at 27251.10, up by 373.62 points or 1.39% after trading in a range of 26750.01 and 27299.80. There were 23 stocks on gainers side against 7 decliners on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.59%, while Small cap index up by 0.92%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 2.76%, Capital Goods up by 1.97%, Auto up by 1.73%, Power up by 1.43% and Oil & Gas up by 1.42% while, Realty down by 0.71% was the lone losing index on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 4.81%, ICICI Bank up by 3.32%, GAIL India up by 2.82%, SBI up by 2.58% and Tata Power up by 2.52%. On the flip side, Hindalco down by 3.27%, Bharti Airtel down by 2.55%, NTPC down by 1.80%, Hindustan Unilever down by 0.20% and Vedanta down by 0.16% were the top losers. (Provisional)

Meanwhile, the first month of the new fiscal is pointing to a smart recovery in the domestic economy, as the Indirect tax collections rose at a fast clip in April compared to same period last year. There was 46.2% rise in indirect tax collections, with central excise contributing the most. In all, the government raised Rs 47,747 crore through indirect taxes in April, 7.4% of the Rs 6.47 lakh crore budgeted for 2015-16.

As per the data released by the Finance Ministry, Customs collections were up 23.6% to Rs 14,286 crore, while Service tax collection was up 21.2% to Rs 15,088 crore, mainly due to increased tax rates proposed in the budget. Service tax rate was raised to 14% from 12.36% in the budget, while the government allowed the tax concessions to automobiles and select white goods sectors to lapse at the end of 2014, effecting rise in excise duty.

The development has come as a pleasant surprise for the government as strong revenue growth from the beginning will help government start spending early, which is considered crucial to reviving investments. Usually collection in the first month of the fiscal gets neutralized owing to refunds of higher tax payments by taxpayers in the month of March and the growth remains muted in the first few months of the year.

India VIX, a gauge for markets short term expectation of volatility declined 0.68% at 20.68 from its previous close of 20.54 on Tuesday. (Provisional)

The CNX Nifty settled at 8235.45, up by 108.50 points or 1.34% after trading in a range of 8089.80 and 8254.95. There were 40 stocks advancing against 10 stocks declining on the index. (Provisional)

The top gainers on Nifty were Axis Bank up by 4.91%, ICICI Bank up by 3.07%, GAIL India up by 3.04%, Ambuja Cement up by 2.75% and IDFC up by 2.73%. On the flip side, Lupin down by 3.36%, Hindalco down by 2.98%, Bharti Airtel down by 2.30%, NTPC down by 2.29% and Zee Entertainment down by 1.07% were the top losers. (Provisional)

European Markets were trading in the green; Germany's DAX gained 0.63%, France's CAC rose 1.12% and UK's FTSE was up by 0.59%.

The Asian markets closed mostly in green, while Hong Kong and Shanghai retreated after more disappointing Chinese data pointing to a further slowdown in the economy. Bank of Japan Governor Haruhiko Kuroda acknowledged that last year’s sales tax hike imposed bigger damage on the economy and prices than initially expected. He added that the economy is sustaining positive momentum spurred by the central bank’s massive stimulus programme adopted in 2013. Kuroda enlightened that excessive yen strength has been reverWatchers Current Index sed since the introduction of the bank’s massive stimulus programme in 2013. The BOJ’s quantitative and qualitative easing was to lower real interest rates by pushing down nominal interest rates and heightening inflation expectations.

Japan’s Economy rose to a seasonally adjusted 53.6, from 52.2 in the preceding month while Japan’s Current Account rose to a seasonally adjusted 2.07T, from 0.61T in the preceding month whose figure was revised up from 0.60T. Japan’s Bank Lending remained unchanged at a seasonally adjusted annual rate of 2.6%, from the preceding quarter. Chinese Industrial Production rose to 5.9%, from 5.6% in the preceding month while Chinese Retail Sales fell to an annual rate of 10.0%, from 10.2% in the preceding month. Chinese Fixed Asset Investment fell to a seasonally adjusted 12.0%, from 13.5% in the preceding month.