Benchmarks trim gains in late trade; Sensex ends above 25700 mark

Indian benchmarks despite getting a promising start and surging to over one percent in second half of the session failed to maintain the lead and ended with gain of just over quarter a percent. Sentiments were sanguine from the start of trade with Finance Minister Arun Jaitley exuding confidence in getting the GST Bill passed in the upcoming monsoon session. Jaitley said that he has spoken to the chief ministers of all states, including those ruled by the UPA and the Congress, and they are a “strong supporter” of the idea. Besides, exit polls which indicated BJP emerging victorious in the Assam assembly polls also boosted investor sentiment. The actual results would be declared on May 19, 2016. Market participants also got some encouragement with the India Meteorological Department’s announcement that the late arrival of the monsoon will not delay crop sowing and that rains are expected to make rapid progress after their arrival around June 7, 2016. Firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Indian rupee appreciated by 9 paise to 66.70 against the dollar at the time of equity markets closing on increased selling of the US currency by exporters and banks.  However, investors remained cautious on the report that inflation based on wholesale prices accelerated in April for the first time in 18 months, reinforcing the likelihood that the Reserve Bank of India (RBI) will hold interest rates steady next month.

On the global front, Asian markets ended mostly higher on Tuesday, as a jump in oil prices, a weaker yen and optimism on Wall Street helped to offset worries over China's growth. Energy firms were among the biggest gainers as oil prices pushed further high, a day after closing at six-month peak in reaction to a Goldman Sachs report that the petroleum market was in a short-term supply deficit, while tech firms boosted by news of billionaire investor Warren Buffett took a stake of about $1 billion in the technology giant ‘Apple’. Further, Japanese shares climbed as investors turned optimistic after the data of Economy Ministry showing that Japan's industrial production grew more than estimated in March, while Chinese market ended slightly in red on speculation that Beijing will not resort to large stimulus measures to boost growth. Meanwhile, European stock markets started the session on firm note, tracking their counterparts around the world higher as oil prices continued their advance ahead of key US inflation data.

Back home, the markets moved higher in the morning trade as investors were largely influenced by the supportive leads from Asian markets. The frontline indices soon gathered momentum and traded with over half a percent gains through the morning session of trade. Second half of the session saw the key gauges capitalize on the momentum further and spurt to session’s highest levels. However, an intense profit booking in dying hour of trade ensured that the key indices shut shops off the intraday highs. Finally, the NSE’s 50-share broadly followed index - Nifty garnered around three tens of a percent point to settle just below the crucial 7,900 level, while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated over a hundred points and closed above the psychological 25,700 mark. On the BSE sectoral space, the Oil & Gas counter remained the top gainer in the space with over a percent gains followed by the Realty pocket which surged over half a percent. On the flipside Power counter languished at the bottom of the table with a cut of over quarter a percent, while the FMCG and Metal sectors settled with minute cuts. The market breadth remained in favour of advances as there were 1306 shares on the gaining side against 1297 shares on the losing side, while 183 shares remained unchanged.

Finally, the BSE Sensex surged 103.34 points or 0.40% to 25756.57, while the CNX Nifty rose 30 points or 0.38% to 7,890.75.

The BSE Sensex touched a high and a low 25927.31 and 25733.76, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 0.13%, while Small cap index gained 0.19%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.18%, Realty up by 0.79%, Auto up by 0.58%, PSU up by 0.57% and Capital Goods up by 0.55%, while Power down by 0.38%, FMCG down by 0.16% and Metal down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 3.72%, Axis Bank up by 3.32%, HDFC up by 2.44%, Asian Paints up by 1.92% and Maruti Suzuki up by 1.77%. On the flip side, NTPC down by 2.18%, Hindustan Unilever down by 1.38%, Adani Ports &Special down by 1.29%, HDFC Bank down by 0.81% and Tata Motors down by 0.68% were the top losers.

Meanwhile, buoyant about the country’s growth, Economic affairs secretary Shaktikanta Das has said that India’s pace of economic expansion is likely to exceed the government’s initial projection this year, accelerating to about 8% if the country receives normal levels of seasonal rainfall. He further said that a good forecast for the monsoon and host of other factors is likely to give nation’s economy a boost.

He said that with India’s weather office recently forecasting an above normal monsoon this year, the projection of a higher GDP growth for the country has improved. Das expects that the private sector investment this year to be far better than last year. He added that indicators such as automobile and cement sales showed a strong increase in the first quarter of this calendar year, indicating that economic activity is strengthening.

Furthermore, he said that India’s banks will be in a better position to lend and spur growth after meeting the central bank’s requirements to earmark funds to shield themselves against bad, or nonperforming, loans. He also said that the government has taken measures including infusing capital in the public sector banks and added that the problem of stressed assets which looked very grim last year, now looks to be getting under control.

The government had projected GDP growth to be 7.6% for the last fiscal year, the provisional data for which is due on May 31. For the current financial year, the government has projected growth will be between 7% and 7.75%.

The CNX Nifty touched a high and low 7,940.10 and 7,879.70 respectively. 

The top gainers on Nifty were ONGC up by 3.80%, Axis Bank up by 3.35%, Ultratech Cement up by 2.50%, HDFC up by 2.41% and BPCL up by 2.40%. On the flip side, Eicher Motors down by 2.40%, NTPC down by 2.32%, Aurobindo Pharma down by 1.75%, Adani Ports down by 1.61% and Kotak Mahindra Bank down by 1.42% were the top losers.

European markets were trading in green; France’s CAC increased 20.57 points or 0.48% to 4,332.85, Germany’s DAX gained 21.73 points or 0.22% to 9,974.63 and UK’s FTSE 100 was up by 42.04 points or 0.68% to 6,193.44.

The Asian markets ended mostly higher on Tuesday, extending their gains for the second day in a row, tailing the jump in US markets overnight after crude spiked to six months high. Japanese market was one of the major gainers, surging by over a percent and hitting a near three-week high, as oil prices climbed and the yen's retreated ahead of a G7 meeting. Traders were also encouraged by the data of Economy Ministry showing that Japan's industrial production grew more than estimated in March. Output grew 3.8 percent from February instead of 3.6 percent estimated initially. On the other hand the Chinese market ended slightly in red on speculation that Beijing will not resort to large stimulus measures to boost growth. Indonesian market was the only other market that ended tad lower in the region.