Post Session: Quick Review

Local equity markets strengthening further concluded at day’s highest point with gains of 1.25% which lifted both Sensex and Nifty above psychologically crucial 27,650 and 8,350 levels respectively on relentless buying activity by funds and retail investors supported by forecast of a timely monsoon and hopes of a rate cut by the Reserve Bank of India (RBI) amid mixed Asian cues. India Meteorological Department (IMD) forecast that the monsoon may hit the Kerala coast on May 30 even as the country stares at the possibility of below-normal rains for the second consecutive year, bolstered sentiment. Meanwhile, narrower trade deficit data also added to the positive environment.  On the macro-front, country’s imports slid by 7.53% at $33.05 billion against $35.74 billion in previous month, while exports, continuing its declining trend for sixth straight month declined by 7.93% at $22.05 billion from $ 23.95 billion in March, leaving a trade deficit of $10.99 billion in the month under review. Meanwhile, the session also was productive for broader indices, which went home with gains of around a percent.

On the global front, Asian shares slipped on Monday despite soft data raising expectation that the Federal Reserve will need to wait longer to raise interest rates. US industrial production unexpectedly fell for a fifth straight month in April, while consumer confidence dropped to a seven-month low in early May. Coming on the heels of weak retail sales and producer inflation data, the reports stoked concerns that the US economy is hardly gaining momentum after disappointing 0.2 per cent annualised growth in January-March. Meanwhile, European shares were higher in morning trade on Monday, with investors focusing on individual stocks news and weak data from China and the U.S.

Closer home, with across the board buying taking place, most of the sectoral indices on BSE concluded into positive territory, barring stocks from Realty counter. On the otherhand, massive buying was witnessed by stocks from Consumer Durables, Oil & Gas and Healthcare counters were the prominent gainers of the session. Stocks of oil marketing companies such as HPCL, BPCL and IOC were up on the back of a hike in petrol and diesel prices last week. The overall market breadth on BSE was in the favour of advances which thumped decliners in the ratio of 1664:1055; while 125 shares remained unchanged.

The BSE Sensex concluded at 27687.30, up by 363.30 points or 1.33% after trading in a range of 27370.28 and 27725.97. There were 25 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.98%, while Small cap index up by 0.97%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.16%, Oil & Gas up by 2.09%, Healthcare up by 1.54%, Infrastructure up by 1.43% and FMCG up by 1.37% while, Realty down by 0.20% was the lone losing index on BSE. (Provisional)

The top gainers on the Sensex were Dr. Reddys Lab up by 3.56%, Tata Power up by 3.15%, GAIL India up by 3.00%, HDFC up by 2.67% and Bajaj Auto up by 2.30%. On the flip side, NTPC down by 0.33%, Coal India down by 0.31%, Hero MotoCorp down by 0.21%, Tata Steel down by 0.10% and Tata Motors down by 0.06% were the top losers. (Provisional)

Meanwhile, pension fund regulator PFRDA has invited application for a bank to act as National Pension System (NPS) trustee to facilitate fund transfers across entities such as annuity service providers and subscribers, presently being managed by Axis Bank. PFRDA has said that the NPS Trustee Bank shall be required to provide banking facilities as directed by NPS Trust under the prescribed regulations and guidelines.

Presently NPS has more than 87 lakh subscribers with Asset Under Management (AUM) of over Rs 80,800 crore. The NPS Trust, responsible for taking care of the funds under the NPS, holds accounts with the NPS Trustee Bank. The Trustee Bank facilitate fund transfers across various entities of Central Recordkeeping Agencies (CRAs) system -- nodal offices, aggregators, pension funds, annuity service providers and subscribers, among others.

Currently, eight pension fund managers (PFMs) manage private-sector funds, and only three run by nationalized financial institutions are allowed to manage central and state government funds. Given the low volumes and the asset management fee of 0.01%, managing only private-sector funds becomes unviable for PFMs. Recently, the government has given mandate to the PFRDA to administer 'Atal Pension Yojana-(APY)' through Banks. The government has raised the foreign direct investment (FDI) limit in the sector to 49% last month and the entry of foreign pension funds will facilitate the government’s efforts to ensure a rapid increase in pension coverage of the private-sector workforce in India.

India VIX, a gauge for markets short term expectation of volatility declined 9.65% at 17.90 from its previous close of 19.81 on Friday. (Provisional)

The CNX Nifty settled at 8373.65, up by 111.30 points or 1.35% after trading in a range of 8271.95 and 8384.60. There were 45 stocks advancing against 4 stocks declining on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 3.81%, Dr. Reddys Lab up by 3.60%, Zee Entertainment up by 3.47%, Ultratech Cement up by 3.38% and BPCL up by 3.36%. On the flip side, Asian Paints down by 2.98%, Tech Mahindra down by 0.93%, Hero MotoCorp down by 0.36% and Coal India down by 0.22% were the top losers. (Provisional)

European Markets were trading in the green; Germany's DAX gained 0.94%, France's CAC rose 0.22% and UK's FTSE was up by 0.3%

The Asian markets closed mostly in green on Monday, tracking the gains in US shares as weaker-than-expected economic data spurred bets the Federal Reserve won’t rush to raise interest rates. Bank of Japan’s chief economist stated that the country’s economy is likely to shift to an expansionary phase this fiscal year due to improvements in domestic demand, exports and a windfall from last year’s decline in oil prices. Japan’s industrial production fell to a seasonally adjusted -0.8%, from -0.3% in the preceding month. Japan’s core machinery orders increased 2.9 percent in March from the previous month, rising for the first time in two months, in a sign of a pick-up in business investment. The rise in core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, compared with the median estimate of a 1.8 percent increase. In January-March, core orders rose 6.3 percent from the prior three months. Compared with a year earlier, core orders in March rose 2.6 percent.

As China’s economy slows and Beijing becomes more relaxed about letting its companies fail, a rising number of foreign bondholders risk being caught up in the country’s unpredictable court system.  As China’s slowdown continues, lawyers expect to see an uptick in bankruptcy filings, but warned that the outcome of these proceedings would continue to be distorted by political factors. China’s new home prices fell for the eighth consecutive month in April from a year earlier but were flat from March, adding to hopes that a property downturn which is weighing heavily on the economy is beginning to bottom out. Average new home prices in China’s 70 major cities dropped 6.1 percent last month from a year ago, the same rate of decline as in March. But nationwide prices steadied from March, further narrowing from a 0.1 percent fall in the previous month.