Boisterous benchmarks stage a remarkable rally; Sensex rallies 500 pts

Indian markets showcased a gung ho performance on Monday galloping over one and half percent in the session, as fervent bulls relentlessly piled up hefty positions not only in heavyweight stocks but across the broader markets too. The surprise triple digit rally helped the benchmarks to conquer a lot of psychological levels on their northbound journey and scale highest levels seen in last eleven months. Sentiments across the globe remained highly sanguine in the session after strong US monthly jobs data reassured investors about the health of the world's largest economy. While strong June jobs report put to rest lingering worries about the labor market and the broader economy, investors veered around to the view that the Federal Reserve will not hike interest rates in the near term, given the uncertain consequences of Brexit and the November presidential election. On the domestic front, local investors also cheered NITI Aayog Vice Chairman Arvind Panagariya’s statement that the government has put the economy on the path of reform to achieve a high growth trajectory though there are significant lags between policy decisions and outcomes which need to be addressed. He also mentioned that today, the economy is far healthier compared to the last year of UPA II in all macroeconomic parameters.

Besides, the increasing possibility of GST approval as Congress indicated softening of its stand and satisfactory progress of the monsoon in the country so far, also improved sentiments. Around 89% of the country has received normal and excess rainfall, owing to a good amount of monsoon in several parts, while large parts of Gujarat have recorded deficiency of more than half. Overall, the country has recorded 254 mm of rainfall from June 1 to July 10, as against 251 mm, which is one percent more.  Furthermore, Planting of crops has jumped 88 per cent in the past week in step with the monsoon's surge since the end of June, raising hopes of a much higher production and moderate prices of pulses and rice. Water level in reservoirs also increased, which is good for post-monsoon irrigation and hydropower generation.

On the global front, Asian stock markets ended higher on Monday as stronger-than-expected US jobs report suggested that the world's biggest economy was back on track.  The US Labor Department's jobs report said non-farm payroll employment surged up by 287,000 jobs in June versus economist estimates for an increase of about 180,000 jobs. Further, Japanese stocks surged after Prime Minister Shinzo Abe's ruling coalition clinched victory in the upper house elecions, while Chinese shares rose as investors figured the inflation numbers raised the prospect of more economic stimulus -- something market participants are anticipating from several major central banks around the world in coming months. Meanwhile, European shares rose for the third straight session on Monday helped by a rally in shares of steelmakers and financials. 

Back home, the NSE’s 50-share broadly followed index Nifty, settled with triple digit gains above the crucial 8,400 support level, while Bombay Stock Exchange’s Sensitive Index, Sensex accumulated around five hundred fifty points to close above the important psychological 27,600 levels. Moreover, the broader markets too participated in the rally and closed with gains of around a percent.  On the BSE sectoral space, hefty buying was seen across the board as not even a single sectoral index went home in the negative territory. Investors piled up hefty positions in the high beta Metal counter which rocketed by over two percent, while the Auto, Banking and PSU pockets too climbed by over two percent each. The market breadth remained optimistic as there were 1718 shares on the gaining side against 1040 shares on the losing side, while 187 shares remained unchanged.

Finally, the BSE Sensex surged 499.79 points or 1.84% to 27626.69, while the CNX Nifty rose 144.70 points or 1.74% to 8,467.90.

The BSE Sensex touched a high and a low 27647.48 and 27358.23, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 1.49%, while Small cap index was up by 0.79%.

The top gaining sectoral indices on the BSE were Metal up by 2.46%, Auto up by 2.19%, Bankex up by 2.07%, PSU up by 2.06% and Realty up by 2.05%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Adani Ports &Special up by 4.78%, Tata Motors up by 4.15%, ICICI Bank up by 3.44%, Coal India up by 2.84% and SBI up by 2.84%. On the flip side, Axis Bank down by 0.38% was the only loser in the Sensex.

Meanwhile, NITI Aayog Vice Chairman Arvind Panagariya lauding the works done by the present government has said that the government has put the economy on the path of reform to achieve a high growth trajectory though there are significant lags between policy decisions and outcomes which need to be addressed.

Comparing current government with United Progressive Alliance (UPA) II, Panagariya said that at present the Indian economy is far healthier as compared to the last year of UPA II in all macroeconomic parameters and added that the current government has ended the paralysis by clearing numerous projects. Panagariya however said that the UPA I government worked well but policy paralysis during UPA II rule had hurt the economy badly and as a result the economy plunged into what appeared to be a crisis during its last two years and people were of the opinion that the economy has reached to level of 1991 crisis. He further said that the though the UPA government had expanded social schemes but didn’t took necessary measures to sustain the high growth over a longer period of time.

Commenting on current government, he said the Modi government in the last two years did not face any corruption charges, the economy’s growth rate had improved along with the current account deficit. The government had put the economy to the path of reforms to achieve high growth trajectory.

The CNX Nifty traded in a range of 8,308.15 and 8,242.10. There were 44 stocks advancing against 7 decliners on the index.

The top gainers on Nifty were BHEL up by 5.04%, Grasim Industries up by 3.72%, Dr. Reddys Lab up by 3.37%, Axis Bank up by 3.02% and Tata Steel up by 3%. On the flip side, Sun Pharma down by 0.75%, Infosys down by 0.42%, Bosch down by 0.38%, Cipla down by 0.33% and Gail down by 0.09% were the top losers.

European markets were trading with good gains, France’s CAC increased by 40.79 points or 0.97% to 4,231.47, UK’s FTSE 100 was up by 45.05 points or 0.68% to 6,635.69 and Germany’s DAX was higher by 134.76 points or 1.4% to 9,764.42.

Asian markets ended higher on Monday after the latest US jobs report showed the world's largest economy had added 287,000 jobs in June, far more than expected and the most since October. This was in contrast to May's dismal payroll gain of 11,000. While strong June jobs report put to rest lingering worries about the labor market and the broader economy, investors veered around to the view that the Federal Reserve will not hike interest rates in the near term, given the uncertain consequences of Brexit and the November presidential election. Investor sentiment was also bolstered by election results in Australia and Japan, a weaker yen and hopes of further policy easing in China. Japanese shares led regional gains as Prime Minister Shinzo Abe's ruling coalition won a landslide victory in an election for Parliament's Upper House, and the yen fell sharply against the dollar and euro on hopes for stimulus and economic revival. Investors shrugged off a report from the Cabinet Office, which showed that Japan's core machinery orders unexpectedly fell for a second straight month in May. Chinese shares rose as tepid inflation data boosted stimulus hopes. China's June consumer inflation grew at its slowest pace since January and the producer price index extended its decline, pointing to continued weak domestic demand.