Post Session: Quick Review

Indian markets went through a very volatile day of trade on Monday. The day which looked promising in the early morning, turned somber in the noon only to bounce back in the last leg of trade driven by value buying in bluechips. Markets taking cues from the recovery in the Asian peers made a positive start but reversed all the early gains by the very first hour of trade on selling in banking, auto, telecom and financial stocks on forecast of a delay in monsoon, after the India Meteorological Department hinted at a likely delay in the onset of the Southwest monsoon over Kerala by a week. IMD now expects the rains to hit Kerala coast only on June 7, this is expected to delay monsoon in other parts of the country as well. However, IMD also said that after the initial delay in reaching Kerala, monsoon will progress normally and rainfall will be 6% over the long period average. Traders got some support from rupee recovery too, the domestic currency which weakened against the US dollar on concerns about the delay of monsoon and weak macroeconomic data, stabilized erasing all the losses by the second half.

On the global front, despite the weak trade at US markets in last session, the Asian indices logged gains, even shrugging off soft Chinese data released over the weekend. China's investment, factory output and retail sales all grew at a slower pace in April. Japanese shares that was in jubilant mood from beginning, advanced after a report that the government may delay a planned sales tax increase. Though, the Bank of Japan said that the producer prices in Japan were down 0.3 per cent on month in April. The European markets though made a cautious start and were trading mixed in early deals.

Back home, once picking up the pace in second half there was no looking back for the Indian markets. Both the benchmarks ended near the highs of the day, while Sensex regained its 25600 level, the Nifty bounced back from below 7800 level to gain over half a percent. Traders went for value buying amid positive Asian cues and bounce back in banking stocks that had dragged the markets in early deals after reporting a disappointing set of numbers for the quarter ended March 31, 2016, with the major culprit being the Bank of Baroda (BOB), which reported a loss of Rs 3,230 crore in the quarter under review compared with Rs 598 crore profit in the same period a year ago. Traders even overlooked the Wholesale Price Inflation (WPI) data, which turned positive after remaining 17 consecutive months in negative. The annual rate of inflation, based on monthly WPI, stood at 0.34% (provisional) for the month of April, 2016 (over April, 2015) as compared to -0.85% (provisional) for the previous month and -2.43% during the corresponding month of the previous year. Though, the Reserve Bank of India (RBI) has shifted its primary focus to the Consumer Price Index, but it will also look at the WPI numbers in its monetary policy review next month, especially after the CPI inflation too spiked up in last month. On the sectoral front most of the sectoral indices managed a positive close led by consumer durables, realty and metal, however there were some laggards too like oil & gas, power and capital goods. Banking too despite a smart recovery ended marginally in red.

The BSE Sensex ended at 25653.23, up by 163.66 points or 0.64% after trading in a range of 25351.62 and 25688.46. There were 17 stocks on gainers side against 13 stocks on the losers side on the index. (Provisional)

The broader indices though underperformed the benchmarks but managed to end in green; the BSE Mid cap index closed higher by 0.30%, while Small cap index gained 0.09%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 1.58%, Realty up by 1.47%, Metal up by 0.77%, IT up by 0.62%, Auto up by 0.56%, while PSU down by 1.10%, Oil & Gas down by 0.41%, Capital Goods down by 0.32%, Power down by 0.22%, Consumer Durables down by 0.12% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 3.05%, Dr. Reddys Lab up by 2.78%, Hindustan Unilever up by 1.79%, HDFC up by 1.67% and HDFC Bank up by 1.62%. On the flip side, SBI down by 4.14%, Cipla down by 1.57%, Adani Ports & SEZ down by 1.57%, ONGC down by 1.05% and BHEL down by 0.98% were the top losers. (Provisional)

Meanwhile, after a weak industrial growth numbers, industry body, the Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest survey has hinted at a slower growth in manufacturing and stated that growth of India's manufacturing sector may decelerate during June quarter due to factors like bleak export outlook, poor demand and high cost of borrowing. FICCI said that its survey had earlier indicated revival in the manufacturing activity in fourth quarter of 2015-16, which seems to be slowing down in first quarter of this fiscal now.

The industry body in its quarterly survey has further stated that the percentage of respondents expecting higher growth in the April-June quarter has gone down to 53% compared with 60% for January-March. As per the survey, the hiring outlook too seems bleak in manufacturing in coming months as over 80% respondents were not likely to hire additional workforce in the next 3 months.

The survey has also said that the outlook for export continues it’s downward trend with the proportion of respondents expecting higher exports in the quarter falling to 36 per cent, much lower than 41 per cent in the fourth quarter of 2015-16. The survey also noted that only 38 per cent respondents reported higher order books for the April-June quarter which is less compared to the 44 per cent of previous quarter. In terms of investment, for Q1 2016-17, 75 per cent respondents as against 68 in the previous quarter reported that they don't have any plans for capacity additions for the next six months implying a slack in private sector investments in manufacturing to continue.

The survey responses which have been drawn from 308 manufacturing units from large, medium and small segments with a combined annual turnover of over Rs 4 lakh crore, gauged the expectations of manufacturers for 13 major sectors namely textiles, capital goods, metals, chemicals, cement and ceramics, electronics, auto, leather & footwear, machine tools, food, tyre, paper and textiles machinery.

The CNX Nifty ended at 7859.30, up by 44.40 points or 0.57% after trading in a range of 7772.15 and 7873.90. There were 31 stocks in green against 20 stocks in the red on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 3.83%, Bharti Infratel up by 3.44%, ITC up by 3.26%, Bosch up by 3.26% and Dr. Reddys Lab up by 2.53%. On the flip side, Bank Of Baroda down by 8.45%, SBI down by 4.25%, Cipla down by 1.84%, Adani Ports & SEZ down by 1.59% and Idea Cellular down by 1.28% were the top losers. (Provisional)

The European markets were showing mixed trend, Germany’s DAX was up by 90.78 points or 0.92% to 9,952.90, France’s CAC was down by 35.43 points or 0.82% to 4,284.56 and UK’s FTSE 100 declined by 17.44 points or 0.28% to 6,121.06.

Asian equity markets ended mostly higher on Monday as gains in oil prices and hopes for economic stimulus in Japan helped investors shrug off weak cues from Wall Street and disappointing Chinese data. Japanese shares rallied earlier in the day after reports suggested that Prime Minister Shinzo Abe will postpone a planned sales tax increase scheduled for next year. The early rally faded soon after a top government spokesman denied the report. Chinese shares closed notably higher despite a raft of disappointing data pointing to continued weakness in the world's second largest economy. China's investment, factory output and retail sales all grew more slowly than expected in April, raising fears that a bounce seen in March is fizzling. Sentiment was bolstered somewhat after the China Securities Regulatory Commission denied the media reports about an adjustment to the policies on refinancing and mergers and acquisitions by listed companies.