Post Session: Quick Review

After witnessing consolidation in previous trading session, local equity markets sprang back to life on Friday and ended with gains of around half of a percent which lifted both Sensex and Nifty above psychologically crucial 27950 and 8450 levels respectively. Sentiments were buoyed on continued hopes of rate cut by the Reserve Bank at its policy review early next month amid expectations that State Bank of India and ITC may post encouraging financial results. Besides, a positive global set up also added to the positive milieu. Bulls also turned boisterous after finance minister highlighted the achievements of the government on completion of first year in the office. Finance Minister claimed that there was more enthusiasm in India after Modi assumed office on May 26, 2014 and that the stability returned to the economy in last one year. Meanwhile, the session also was positive for broader indices, which though underperformed larger counterparts by fat margins, but went home with gains in the range of 0.05-0.15%. For the week, both Sensex and Nifty rallied over 2%. On the broader front, while CNX midcap index ended higher by 0.90%, BSE Smallcap index went home with gains of around 1.50%.

On the global front, mainland Chinese stocks hit fresh seven-year highs on Friday and notched up their biggest weekly gain in two months as the market continued to rally on hopes of more stimulus from the government after a private survey showed more weakness in the vast manufacturing sector. Meanwhile, European shares steadied around the previous session's three-week highs on Friday, with investors focusing on speeches from leading central bankers due later in the day for hints about the market's near-term direction. European Central Bank President Mario Draghi and Bank of England Governor Mark Carney, along with other central bankers, will be addressing an ECB Forum in Portugal later in the day.

Closer home, most of the sectoral indices on BSE concluded into positive territory, stocks from Information Technology, Healthcare and Capital Goods counters were the top gainers of the session. On the flip side, much of the drubbing was witnessed by stocks from Consumer Durables, Banking and Realty counters  who were the top losers of the session. Banking stocks which soared after the Reserve Bank of India extended the timeframe to spread over the shortfall arising out of sale of bad assets to 31 March 2016 concluded lower on profit-booking. The index also took a hit for the worst after SBI shares slipped over 2% even after the bank reported better than expected 23.1% growth in Q4 net profit at Rs 3742 crore from Rs 3040.7 crore in corresponding quarter last quarter and improvement in its asset quality. However, stocks of upstream oil companies soared in trade after India’s oil ministry set interim rules for these companies, which exempted them from giving any discount on crude and refined fuel sales if the global crude oil prices average up-to $60 a barrel. The overall market breadth on BSE was in the favour of decliners which thumped advances in the ratio of 1511:1205, while 118 shares remained unchanged.

The BSE Sensex concluded at 27957.50, up by 148.15 points or 0.53% after trading in a range of 27828.61 and 28071.16. There were 18 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.12%, while Small cap index was up by 0.06%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 0.91%, Healthcare up by 0.86%, Capital Goods up by 0.78%, Oil & Gas up by 0.60% and TECK up by 0.60% while, Consumer Durables down by 0.68%, Bankex down by 0.42%, Realty down by 0.25%, Metal down by 0.18% and INFRA down by 0.04% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were HDFC up by 2.71%, TCS up by 2.65%, Sun Pharma up by 1.75%, ONGC up by 1.53% and Larsen & Toubro up by 1.04%. On the flip side, SBI down by 2.57%, Hindalco down by 1.55%, Wipro down by 0.93%, Axis Bank down by 0.67% and Tata Power down by 0.66% were the top losers. (Provisional)

Meanwhile, Reserve Bank of India (RBI) has announced two measures that would enable higher remittances and also ease the process of raising funds through external commercial borrowings (ECB). The central bank has trebled the limit on trade-linked remittances to Rs15 lakh from the earlier Rs 5 lakh and said banks can regularise payments exceeding the limit if they are satisfied with the bonafide of the transaction.

RBI has also allowed overseas banks to enter into swaps with other overseas banks besides domestic banks to facilitate disbursals of rupee loans by overseas lenders. Though, the central bank has said that the continuation of the swap shall be subject to the existence of the underlying ECB at all times. On the due date, settlement may be done through the Vostro account of the overseas bank maintained with its counterpart in India.

The RBI further said a KYC certification on the end client should also be taken by the bank in India as a one-time document from the overseas bank. RBI Deputy Governor H R Khan said that the central bank is working with the government to simplify and liberalise procedures related to foreign exchange regulations to facilitate ease of doing business in the country.

India VIX, a gauge for markets short term expectation of volatility declined 2.67% at 16.95 from its previous close of 17.41 on Thursday. (Provisional)

The CNX Nifty settled at 8458.95, up by 37.95 points or 0.45% after trading in a range of 8420.60 and 8489.55. There were 29 stocks advancing against 21 stocks declining on the index. (Provisional)

The top gainers on Nifty were HDFC up by 2.56%, TCS up by 2.44%, Sun Pharma up by 2.29%, Tech Mahindra up by 1.75% and Lupin up by 1.53%. On the flip side, Ultratech Cement down by 2.91%, SBI down by 2.69%, Idea Cellular down by 2.56%, Hindalco down by 1.58% and Vedanta down by 1.34% were the top losers. (Provisional)

European Markets were trading mostly in red; Germany's DAX lost 0.47% and France's CAC was down by 0.44%, while UK's FTSE was up by 0.41%.

The Asian markets closed mostly in green on Friday, with Hong Kong and mainland shares surging on hopes that the latest disappointing Chinese economic data will spur the country’s leaders to announce further stimulus measures. The Bank of Japan board voted as expected to keep monetary policy steady, with Takahide Kiuchi repeating his call for a lower bond buying target in a singular note of dissent. Kiuchi wants the BoJ to cut the level of purchases from 80 trillion yen annually set in October last year to about 45 trillion yen. The board however did say that private consumption domestically has been resilient and exports are picking up, though downside risks remain from weak growth in Europe. The overall economic assessment was revised stronger slightly. The BoJ also stated that the economy is expected to continue recovering moderately, slightly different from last month’s outlook that it will continue its moderate recovery trend.

Singapore’s industrial output in April is forecast to have fallen from a year earlier, after a recent survey of purchasing managers showed that the city-state’s factory activity hit a two-year low.  Singapore’s Consumer Price Index in April probably fell from a year earlier for the sixth straight month, likely dragged down by lower housing costs. The all-items Consumer Price Index (CPI) was seen easing 0.1% from a year earlier. Japan’s All Industries Activity Index fell to a seasonally adjusted -1.3%, from 0.2% in the preceding month whose figure was revised up from 0.1%