Boisterous benchmarks display spirited performance; Nifty reclaims 7900 mark

A session after displaying a disappointing performance, Indian benchmark indices bounced back on Thursday, as participants opted to buy beaten down but fundamentally strong stocks. Sentiments got a boost with UN report that India is expected to achieve a 7.5 per cent GDP growth in 2017 and the economic prospects of the South Asian region will be contingent on the growth trajectory of India and Iran. According to report, investment demand in India is supported by the monetary easing cycle, rising FDI, and government efforts towards infrastructure investments and public-private partnerships. Furthermore, prospects of a good monsoon improved as the crucial weather system is likely to hit the Kerala coast on the normal date of June 1, while the risk of a lingering El Nino, which disrupts rainfall in the region, has been eliminated by favourable changes in ocean temperatures. This is good news for farmers and policy makers, as vast areas of the country suffered a drought for two years, which has hit farm output and dried up crucial reservoirs, because El Nino continued to haunt South Asian weather since last year. However, Investors remained cautious ahead of Industrial Production (IIP) for March and Consumer Price Index (CPI) data for April due to be released later in the day.

On the global front, Asian markets ended mostly in red on Thursday, hit by sharp falls on Wall Street the previous day, while German government bond yields hit one-month lows as investors sought shelter in low-risk debt.  Further, Chinese shares recovered from an early sell-off on government plans to invest around 4.7 trillion yuan ($724 billion) in transport infrastructure projects over the next three years. Meanwhile, European stocks rose with US equity-index futures, buoyed by an increase in oil prices after the International Energy Agency softened its forecast for a global supply surplus.

Back home, after getting a gap up start, the local benchmark indices showed some strength in early trades, but the sentiments turned pessimistic in late morning trades and indices start drifting lower, however the markets regained its momentum in the late afternoon trade and surged over half a percent by the end of session. Finally the NSE’s 50-share broadly followed index Nifty, got buttressed by over a half percent to settle above the crucial 7,900 support level, while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated over two hundred points and closed above the psychological 25,800 mark. The broader markets too participated in the rally and closed with gains of around a percent. On the BSE sectoral space, the Consumer Durables counter remained the top gainer in the space with one and half percent surge followed by the Information Technology pocket which gained over a percent. Similarly, banking counter also rallied after the Rajya Sabha passed the Insolvency and Bankruptcy code Bill, enabling a single law to deal with distressed companies, their promoters, creditors, employees and other stake holders for the first time in India. Some buying was also witnessed in telecom stocks such as Bharti Airtel, Idea Cellular and Reliance Communications, reacting to the Supreme Court’s judgment of striking down compensation policy for call drops levied by the Telecom Regulatory Authority of India (TRAI). The market breadth remained positive as there were 1571 shares on the gaining side against 1001 shares on the losing side while 181 shares remained unchanged.

Finally, the BSE Sensex surged 193.20 points or 0.75% to 25790.22, while the CNX Nifty rose 51.55 points or 0.66% to 7,900.40.

The BSE Sensex touched a high and a low 25827.03 and 25620.27, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 0.69%, while Small cap index gained 0.93%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.41%, IT up by 1.12%, Realty up by 1.12%, TECK up by 1.04% and Bankex up by 0.95%, while Capital Goods down by 0.04% was the only losing index on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 3.65%, ICICI Bank up by 3.46%, Asian Paints up by 2.13%, TCS up by 1.96% and Tata Motors up by 1.87%. On the flip side, Axis Bank down by 1.19%, Hindustan Unilever down by 1.11%, Mahindra & Mahindra down by 1.07%, Maruti Suzuki down by 0.69% and HDFC down by 0.69% were the top losers.

Meanwhile, Commerce and Industry Minister Nirmala Sitharaman has said that India is willing to proceed with negotiations under India- European Union (EU) Broad based Bilateral Trade and Investment Agreement (BTIA) and is awaiting confirmation from the EU side to resume the negotiations for the proposed free trade agreement (FTA). The free trade pact is aimed at reducing or significantly eliminating tariffs on goods, facilitating trade in services and boosting investments between the two sides.

The negotiations for the proposed BTIA have witnessed many hurdles with both sides having major differences on crucial issues. The talk was started in June 2007 and so far 16 rounds of negotiations have been held. Due to some outstanding issue, EU withdrew from the negotiations in 2013. The negotiations were expected in August, but they were deferred by India, expressing disappointment and concern over the EU banning sale of around 700 pharma products, clinically tested by GVK Biosciences.

India wants data security status, relaxations in movement of professionals, real market access in terms of sanitary and phytosanitary (norms related with plants and animals); and technical barriers to trade measures adopted in EU. While, EU wants tax reduction in wines and spirits and dairy products and a strong intellectual property regime; besides demanding significant duty cuts in automobiles.

The CNX Nifty touched a high and low 7,916.05 and 7,849.65 respectively. 

The top gainers on Nifty were Bosch up by 4.76%, ICICI Bank up by 3.97%, Dr. Reddys Lab up by 3.71%, Hindalco up by 2.35% and Asian Paints up by 2.34%. On the flip side, Aurobindo Pharma down by 2.15%, Eicher Motors down by 1.30%, M&M down by 1.22%, Hindustan Unilever down by 1.07% and Mahindra & Mahindra down by 0.84% were the top losers.

European markets were trading mostly in green; France’s CAC increased 19.54 points or 0.45% to 4,336.21 and Germany’s DAX was up by 40.25 points or 0.4% to 10,015.57, while UK’s FTSE 100 was down by 4.64 points or 0.08% to 6,157.85.

Asian equity markets ended mixed on Thursday after a dismal session on Wall Street overnight. Chinese shares recovered from an early sell-off to end on a flat note after an article posted on the transport ministry's website revealed the government plans to invest around 4.7 trillion yuan ($724 billion) in transport infrastructure projects over the next three years. Japanese shares eked out modest gains, as the yen weakened slightly and official data showed Japan posted a current account surplus of 2.980 trillion yen in March, the largest monthly surplus in nine years on the back of an improved trade balance and strong returns from overseas investments. The surplus doubled in fiscal 2015 from the previous year.