Post Session: Quick Review

First session of the new F&O series turned out to be jubilant one for local equity markets, which after making a positive start went on gaining ground to conclude near day’s high point that was with gains of around 1.50%, lifting both Sensex and Nifty above psychologically crucial 27,800 and 8,400 levels respectively. Meanwhile, the session also was good for broader indices which went home with gains in the range of 1.15-1.50%. Relentless buying activities by funds and retail investors on growing expectation of rate cut by Reserve Bank of India in its upcoming monetary policy on June 2, 2015, which besides lifting banking shares, also bolstered sentiments across Dalal Street. Street widely expects RBI to cut policy interest rates by 25 basis points in its June 2 policy and another 50 bps in the subsequent two quarters since the retail inflation is hovering at levels, much below foreseen by the central bank itself and the industry needs a demand trigger for a revival. Notably, sentiment also remains positive ahead of the release of Q1FY15 GDP data which is scheduled to be unveiled later in the day.

On the global front, Asian shares ended mostly lower on Friday as the region showed lackluster movements ahead of a batch of US economic data due out later in the night that could provide fresh hints on the timing of a possible interest-rate hike by the Federal Reserve. Meanwhile, European stocks fell Friday, as Greece’s negotiations with its international creditors kept investors on edge. International Monetary Fund Director Christine Lagarde said in a German newspaper interview that a Greek exit from the euro is a possibility, contradicting comments from European Central Bank officials.

Closer home, most of the sectoral indices on BSE concluded in negative territory, with stocks from Auto, Capital Goods and Banking counters being the prominent gainers of the session. On the flip side, Realty counter was the only loser of the session. Notably, IT shares too gained despite Rupee’s strength against dollar. The overall market breadth on BSE was in the favour of advances which thumped decliners in the ratio of 1438:1240, while 109 shares remained unchanged.

The BSE Sensex concluded at 27828.44, up by 321.73 points or 1.17% after trading in a range of 27467.23 and 27888.32. There were 26 stocks advancing against 4 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.48%, while Small cap index gained 1.22%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 1.85%, Capital Goods up by 1.64%, Bankex up by 1.57%, INFRA up by 1.51% and FMCG up by 1.47%, while there were no losers . (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 4.31%, Bharti Airtel up by 2.67%, HDFC Bank up by 2.38%, Coal India up by 2.35% and Maruti Suzuki up by 2.30%. On the flip side, Hindalco down by 2.58%, ONGC down by 0.34% and Tata Motors down by 0.05% were the few losers. (Provisional)

Meanwhile, in an annual global competitiveness report released by a Switzerland based business school, Indian continues to occupy 44th position on account of various problems like high corporate taxes and existence of a parallel economy. Meanwhile, US continued to top the ranking in the report due to its strong business efficiency and financial sector, its innovation drive and the effectiveness of its infrastructure.

Further, International Institute for Management Development (IMD) in its annual world competitiveness ranking of 61 economies for the year 2015 highlighted that India’s 15 biggest improvements in the overall performance of the economy were real GDP growth per capita, government decisions, transparency, risk of political instability, labor productivity and adaptability of government policy among others, whereas its 15 biggest declines were direct investment flows abroad, government budget surplus/deficit, pension funding, food cost, parallel economy, unemployment legislation, Pupil-teacher ratio (primary education), pollution problems, foreign investors and real corporate taxes were among others.

Also the report termed that government’s aim of achieving high growth with zero defect, zero effect model, mobilization of resources for public investment, implementation of the Goods and Services Tax, skill development and employment generation and infrastructure development were some of the key challenges for the economy in 2015.

Notably, however India’s economic performance improved from 21 to 16 rank, and business efficiency slightly increased from 34 to 33, while its government efficiency remained at the same spot on 47 even as infrastructure declined from 57 to 58. Interestingly, India ranked 13 th in Asia pacific region, with the top ten ranks including Hong Kong at 2 nd and Singapore at third followed by Switzerland, which dropped to fourth place from third earlier. This was followed by Canada, Luxembourg, Norway, Denmark, Sweden and finally, Germany at tenth position.

India VIX, a gauge for markets short term expectation of volatility declined 2.77% at 16.65 from its previous close of 17.13 on Thursday. (Provisional)

The CNX Nifty settled at 8433.65, up by 114.65 points or 1.38% after trading in a range of 8305.70 and 8443.90. There were 44 stocks advancing against 6 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Airtel up by 5.61%, Lupin up by 5.07%, Mahindra & Mahindra up by 5.00%, BPCL up by 3.97% and Grasim Industries up by 3.67%. On the flip side, Hindalco down by 1.79%, NMDC down by 1.75%, PNB down by 1.66%, Tata Motors down by 0.56% and BHEL down by 0.42% were the top losers. (Provisional)

European Markets were trading in red; Germany's DAX lost 1.28%, France's CAC declined 1.31% and UK's FTSE was down by 0.26%.

Asian markets closed mostly in red on Friday, while Shanghai also finished its volatile session slightly down, following a painful sell-off in the previous session. Japanese Finance Minister Taro Aso stated that a weakening of Japan’s yen currency in recent days had been rough and he would monitor moves in the foreign exchange markets carefully. Japanese Economics Minister Akira Amari stated that the current pace of yen declines cannot necessarily be described as excessive. Amari enlightened that it has generally become difficult for any country to conduct currency intervention or take steps to directly weaken its currency. Japan’s industrial production rose to a seasonally adjusted 1.0%, from -0.8% in the preceding month. Japanese Housing Starts fell to a seasonally adjusted 0.4%, from 0.7% in the preceding quarter while Japanese Household Spending rose to a seasonally adjusted -1.3%, from -10.6% in the preceding month. South Korean Industrial Production fell to a seasonally adjusted annual rate of -2.7%, from 0.0% in the preceding month whose figure was revised up from -0.1%. South Korea warned that it would undertake smoothing operations when needed to tame the won’s rapid appreciation against the yen, as the yen/won cross fell to its lowest in more than seven years.