Post Session: Quick Review

Boisterous benchmarks showcased an enthusiastic performance on Monday, by rallying around two percentage points, as a recent string of positive corporate results raised tentative hopes about an improving domestic economy. Sentiments remained up-beat since start as key bourses opened with a huge gap on up-side and there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong stocks. Frontline indices not only ended the session above their highest levels in almost a week but also recaptured their crucial 7,850 (Nifty) and 25,600 (Sensex) bastions as investors took to hefty across the board buying.

Sentiments remained up-beat mainly as the weaker-than-expected US jobs report fanned expectations that the Federal Reserve would have to hike interest rates at a very slow pace. Meanwhile, oil prices jumped on Monday as a huge wildfire in Canada’s oil sand region knocked out over a million barrels in daily production capacity, contributing to a significant tightening of markets over the past weeks. Besides, appreciation in Indian rupee too aided sentiments. The rupee was trading strong by 11 paise at 66.43 at the time of equity markets closing on increased dollar selling by banks and exporters and due to capital inflows into the domestic equity market.

Buying got extended after European stocks extended initial gains after the latest data showed German manufacturing orders rebounded sharply in March 2016. Total orders for Germany’s important manufacturing sector -- adjusted for seasonal swings and calendar effects -- jumped 1.9% in March from the month before. However, Asian markets ended mostly in red led by over three percent fall in Shanghai Composite after the latest data showed that China’s exports and imports fell more than expected in April, underlining weak demand at home and abroad.

Closer home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. On the sectoral front, Oil explorers rallied with Oil and Natural Gas Corp and Reliance Industries gaining around one and a half percent following strong gains in crude oil prices. Shares of sugar companies remained in focus on expectation of strong earnings for quarter ended March 31, 2016 (Q4FY16). Shares of auto companies too remained on buyers’ radar after domestic passenger car sales increased 1.87% to 1,62,566 units in April as against 1,59,588 units in the year-ago period.

The NSE’s 50-share broadly followed index -- Nifty -- rose by over one hundred and thirty points to end above the psychological 7,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- surged by over four hundred and sixty points to finish above the psychological 25,600 mark. Broader markets too traded with traction and ended the session with a gain of over a percent.

The market breadth remained in favor of advances, as there were 1,665 shares on the gaining side against 973 shares on the losing side while 169 shares remain unchanged. (Provisional)

The BSE Sensex ended at 25688.89, up by 460.39 points or 1.82% after trading in a range of 25302.86 and 25709.68. There were 26 stocks advancing against 3 stocks declining on the index. (Provisional)

The broader indices were trading in green; the BSE Mid cap index was up by 1.19%, while Small cap index up by 1.22%. (Provisional)

The gaining sectoral indices on the BSE were Bankex up by 2.37%, Finance up by 2.35%, Capital Goods up by 1.93%, Realty up by 1.87% and Telecom up by 1.80%, while there were no losers on the sectoral front. (Provisional)

The top gainers on the Sensex were Bajaj Auto up by 3.87%, Axis Bank up by 3.58%, HDFC up by 3.29%, ICICI Bank up by 3.09% and Larsen & Toubro up by 2.76%. On the flip side, Dr. Reddys Lab down by 1.12%, Hindustan Unilever down by 0.20%, Cipla down by 0.08%, GAIL India down by 0.01% and Sun Pharma down by 0.01% were the top losers. (Provisional)

Meanwhile, with a view to boost its business and taxpayer friendly image, the Finance Ministry has said that the revenue department has taken a number of initiatives for job creation and boosting growth and employment by giving relief to small tax payers, businesses and professionals.

These include reducing the corporate tax rate to 25 per cent for new manufacturing companies, extending tax benefits for housing sector to promote construction industry, reducing the tax rate on royalty and fees for technical services to 10 per cent from 25 per cent and tax incentives for start-ups. The department has also announced various tax incentives for Start-up India, including 100 per cent tax exemption for three years.

The Finance Ministry has said that the limit of deduction under Section 80C of Income Tax Act 1961 has been enhanced from Rs 1 lakh to Rs 2 lakh per annum, subject to the additional Rs 50,000 being contributed to National Pension Scheme (NPS).  Moreover, the scope of presumptive taxation regime for small businesses has been extended by increasing the turnover up to Rs.2 crore, while this benefit is now available for professionals with turnover up to Rs 50,00,000.

The CNX Nifty ended at 7866.05, up by 132.60 points or 1.71% after trading in a range of 7753.55 and 7873.65. There were 43 stocks advancing against 8 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bosch up by 4.41%, Zee Entertainment up by 4.37%, Yes Bank up by 3.96%, Bajaj Auto up by 3.78% and Axis Bank up by 3.39%. On the flip side, Hindustan Unilever down by 0.93%, Dr. Reddys Lab down by 0.92%, Idea Cellular down by 0.66%, BPCL down by 0.23% and Hindalco down by 0.22% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 surged 50.44 points or 0.82% to 6,176.14, France’s CAC increased 58.03 points or 1.35% to 4,359.27 and Germany’s DAX was up by 186.57 points or 1.89% to 10,056.52.

Asian equity markets ended mixed on Monday as disappointing trade data out of China tempered investor optimism stemming from higher oil prices and reduced expectations of Federal Reserve interest rate increases this year. The US economy added just 160,000 jobs in April, the fewest number of jobs in seven months, compared to economist estimates for a jump of about 200,000 jobs, casting doubts on whether the Federal Reserve will raise interest rates before the 8 November presidential election. China stocks fell sharply again, reaching eight-month lows, as investors saw hopes for a strong economic recovery fade and worried about fresh regulatory curbs on speculation. Official data published on Sunday showed further signs of weakness in China with both exports and imports falling more than expected in April. Exports dropped an annual 1.8 percent in dollar terms, reversing an increase of 11.5 percent in the previous month, while imports dropped 10.9 percent, slowing further from the 7.5 percent decline in March. However, Japanese shares snapped a six-day losing streak as the yen's rally paused after reassuring comments on the currency from Finance Minister Taro Aso. Hong Kong shares stayed firm, aided in part by the strong energy sector as crude oil prices soared on supply woes stemming from wildfires in Canada.