Boisterous benchmarks stage a remarkable rally; Nifty ends above 7850 level

Indian benchmark equity indices staged a blockbuster performance on the first day of the week by vehemently rallying close to two percentage points in the session and re-conquering their psychological levels. Sentiments got boosted after a weaker-than-expected US jobs report on Friday left some economists anticipating only one interest rate hike from the Federal Reserve this year. Besides, rise in oil prices and appreciation in the Indian rupee against dollar too supported the markets sentiment. Indian 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. Some support also came with a recent string of positive corporate results that raised tentative hopes about an improving domestic economy.

On the global front, Asian markets ended mostly in red on Monday as investors turned jittery after China’s trade contracted in April and US job growth came in weaker than expected.  China's trade shrank in April in a sign of weak global and domestic demand despite government stimulus efforts, with exports contracting by 1.8 percent in April from a year earlier and imports down 10.9 percent. However, Japan’s Nikkei bucked the trend and rose over 0.6 per cent as the yen’s recent surge appeared to halt for now. Meanwhile, European markets were trading in positive territory in early trade as an increase in oil prices and upbeat Germany economic data offset concerns over a drop in Chinese exports and imports. Factory orders in Germany rose by a strong 1.9 percent in March compared to the previous month.

Back home, the local indices started the session on a sanguine note, with both the benchmarks crossing their respective psychological levels of 25500 (Sensex) and 7800 (Nifty) in very early trade. The bourses further capitalized on the momentum and spurted in noon trades on the back of broad based bottom fishing in undervalued stocks. The northbound journey only concluded with the close of the session helping the key gauges in recovering the ground lost in the week gone by. Eventually the NSE’s 50-share broadly followed index Nifty, got buttressed by close to two percent to settle above the crucial 7,800 support level, while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated over four hundred and fifty points and closed above the psychological 25,600 mark. Moreover, the broader markets too participated in the rally and closed with gains of over a percent. On the BSE sectoral space, hefty across the board buying was seen, as not even a single sectoral index went home in the negative territory. Investors piled up hefty positions in the beaten down Banking counter, which rocketed by round three percent while the Capital Goods index too showed smart recovery and jumped by about two percent. While high beta sectors like - Realty, Auto and Teck too soared in the session.

The market breadth remained optimistic as there were 1665 shares on the gaining side against 973 shares on the losing side, while 169 shares remained unchanged.

Finally, the BSE Sensex surged 460.36 points or 1.82% to 25688.86, while the CNX Nifty rose 132.60 points or 1.71% to 7,866.05.

The BSE Sensex touched a high and a low 25709.68 and 25302.86, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 1.25%, while Small cap index gained 1.20%

The top gaining sectoral indices on the BSE were Bankex up by 2.45%, Capital Goods up by 1.86%, Realty up by 1.74%, Auto up by 1.60% and TECK up by 1.48%, while there were no losing indices on BSE sectoral front.

The top gainers on the Sensex were Bajaj Auto up by 3.78%, Axis Bank up by 3.41%, ICICI Bank up by 3.28%, HDFC up by 3.12% and Larsen & Toubro up by 2.72%. On the flip side, Dr. Reddys Lab down by 0.91%, Hindustan Unilever down by 0.80%, Tata Steel down by 0.12% and Cipla down by 0.03% were the top losers.

Meanwhile, the government expects that the high incidence of zero balance accounts in the Pradhan Mantri Jan Dhan Yojana (PMJDY) will come down substantially, with the help of the government welfare schemes switching to the direct benefit transfer (DBT) regime soon. The issue of zero balance accounts has dogged the government’s ambitious financial inclusion scheme that was launched in August 2014, with critics pointing out that bank accounts are not sufficient if there is no activity associated with them.

With the help of the schemes such as DBT PAHAL or cash transfer for cooking gas kicking off , in the past one year, zero-balance accounts have substantially reduced from a level of 45 per cent in September 2015. Of the 21.68 crore bank accounts opened under the PMJDY scheme, a quarter or 26.39 per cent have zero balance.  Insurance cover under the Pradhan Mantri Jan Suraksha Yojana is also linked to these accounts and will improve the transaction status.

In the year 2015-16, the government had transferred Rs 61, 824.30 crore through DBT in 59 schemes to beneficiary accounts. Under this, transfer towards Mahatma Gandhi National Rural Employment Guarantee Scheme was Rs 25,861.77 crore, and Rs 21, 421 crore for DBT PAHAL. The government has now decided to include all Central sector schemes as well as third party transactions such as payments to workers under various schemes through the DBT.

The CNX Nifty touched a high and low 7,873.65 and 7,753.55 respectively. 

The top gainers on Nifty were Bosch up by 4.56%, Zee Entertainment up by 4.43%, Bajaj Auto up by 4.18%, Yes Bank up by 3.83% and Axis Bank up by 3.48%. On the flip side, Dr. Reddys Lab down by 0.92%, Hindustan Unilever down by 0.63%, HCL Tech down by 0.47%, Idea Cellular down by 0.44% and Cipla down by 0.17% were the top losers.

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.