Sensex slams double century; Nifty ends above 9,350 mark

A session after displaying a distressing performance, Indian equity indices have managed to pull through a dazzling performance by gaining over half a percent on Thursday, thanks to encouraging corporate earnings and a string of government reforms, including NPA package for banks and national steel policy. The government has approved a new policy that envisages Rs 10 lakh crore investment to create more capacity in the steel sector. The policy aims at increasing supply of domestic coking coal to cut dependence on imports by half and production of 300 million tonnes of the alloy by 2030-31. Investors' sentiments also got boost after the US Federal Reserve kept its policy rate unchanged in its two-day policy review. Some support also came with the report that services sector grew for the third straight month in April 2017, though the pace of growth moderated amid slower rise in new business and employment. The Nikkei India Services Purchasing Managers' Index (PMI), which tracks services sector output on a monthly basis, was down from 51.5 in March to 50.2 in April, indicating challenging market conditions that hampered growth. A reading above 50 on the index denotes expansion, while one below the benchmark indicates contraction. Meanwhile, shares of PSU banks surged after Cabinet approved new non-performing assets (NPA) policy to deal with stressed assets. The framework includes the promulgation of an ordinance to amend the Banking Regulation Act to give more teeth to the Reserve Bank of India (RBI) and its oversight committees to act on behalf of banks while deciding on NPAs. The proposals are now awaiting the President's assent. Moreover, Bank Nifty ended record high, supported by ICICI Bank that rallied over nine percent post earnings.

On the global front, Asian equity markets ended mixed on Thursday, as investors turned cautious after the US Federal Reserve left interest rates unchanged overnight as expected, but signaled another rate hike is imminent despite recent economic weakness. The Federal Reserve on Wednesday voted unanimously to leave its benchmark interest rate at 0.75% to 1% and continues to project two more rate hikes in 2017. Further, the looming monthly US jobs report and a possible House vote on the American Health Care Act also kept investors on tenterhooks. Chinese markets edged lower after a private survey showed China's service sector activity expanded at a slower rate in April, raising concerns over growing economic risks. The Caixin services PMI slipped to 51.5 in April, the lowest since May 2016, from 52.2 in March. Meanwhile, European stocks rose as a raft of better-than-forecast results from companies including HSBC Holdings Plc, Anheuser-Busch InBev NV and Royal Dutch Shell Plc added to optimism over an earnings recovery in the region. Sentiments got some support after centrist French presidential candidate Emmanuel Macron was perceived to have gotten the better of the far-right's Marine Le Pen in a debate and a survey showed economic growth in the 19-country eurozone striking a six-year high.

Back home, after getting a solid start, the local benchmarks traded in tight range for most part of the morning trade, but witnessed a strong buying in second half of the session post firm opening of European markets. Eventually, the NSE's 50-share broadly followed index Nifty, convalesced by over half percent to settle above the crucial 9,350 support level, while Bombay Stock Exchange's Sensitive Index, Sensex accumulated over two hundred points and closed above the psychological 30,100 mark. Moreover, the broader markets too participated in the rally and closed with gains of around half a percent. The market breadth remained optimistic, as there were 1453 shares on the gaining side against 1406 shares on the losing side, while 146 shares remained unchanged.

Finally, the BSE Sensex gained 231.41 points or 0.77% to 30126.21, while the CNX Nifty was up by 47.95 points or 0.51% to 9,359.90. 

The BSE Sensex touched a high and a low of 30169.95 and 30007.40, respectively and there were 19 stocks on gainers side as against 11 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.48%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Bankex up by 2.32%, Consumer Durables up by 1.41%, FMCG up by 1.08%, PSU up by 0.89%, Capital Goods up by 0.78%, while Realty down by 0.80%, Metal down by 0.77%, Energy down by 0.65%, Auto down by 0.55%, Oil & Gas down by 0.53% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 9.24%, Adani Ports & SEZ up by 3.68%, Axis Bank up by 3.63%, SBI up by 3.27% and Hindustan Unilever up by 2.23%. On the flip side, Tata Motors down by 2.27%, ONGC down by 1.15%, Mahindra & Mahindra down by 0.89%, Reliance Industries down by 0.84% and Cipla down by 0.84% were the top losers.

Meanwhile, in order to boost processing of marine and agriculture produce, the Cabinet Committee on Economic Affairs (CCEA) has approved a new Central Scheme- ‘Scheme For Agro-Marine Processing And Development Of Agro-Processing Clusters’ (SAMPADA) for the 2016-20 period, with an allocation of Rs. 6,000 crore. The scheme also aims to integrate current and new schemes in food processing sector for reducing food wastage and doubling farmers’ income.

The scheme will leverage investment of Rs. 31,400 crore and ensure handling of 334 lakh million tonnes  agro-produce valuing Rs. 1,04,125 crore. It is also expected to benefit 20 lakh farmers and generate 5,30,500 direct and indirect employment in the country by the year 2019-20. During 2015-16, the food processing sector constituted as much as 9.1 and 8.6 per cent of GVA in Manufacturing and Agriculture sector respectively.

An umbrella scheme ‘SAMPADA’ is a comprehensive package to give a renewed thrust to the food processing sector in the country and will incorporate ongoing schemes of the Ministry like Mega Food Parks, Integrated Cold Chain and Value Addition Infrastructure, Food Safety and Quality Assurance Infrastructure and others. Besides, the implementation of SAMPADA will result in creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet.

The CNX Nifty traded in a range of 9,365.65 and 9,323.25. There were 26 stocks in green as against 25 stocks in red on the index.

The top gainers on Nifty were ICICI Bank up by 9.09%, Grasim Industries up by 4.19%, SBI up by 3.45%, Axis Bank up by 3.42% and Adani Ports & SEZ up by 3.42%. On the flip side, Hindalco down by 2.41%, HCL Tech down by 2.31%, Tata Motors down by 2.15%, ZEEL down by 1.37% and ONGC down by 1.26% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 24.97 points or 0.35% to 7,259.50, France’s CAC rose 41.74 points or 0.79% to 5,342.74 and Germany’s DAX was up by 96.32 points or 0.77% to 12,624.16.

Asian equity markets made a mixed closing on Thursday as falling oil and metals prices coupled with signals from the US central bank that it may hike rates next month offset signs that centrist Emmanuel Macron may win the second round of the French presidential election. The looming monthly US jobs report and a possible House vote on the American Health Care Act also kept investors on tenterhooks. Chinese shares fell slightly after a private survey showed China's service sector activity expanded at a slower rate in April, raising concerns over growing economic risks. The Caixin services PMI slipped to 51.5 in April, the lowest since May 2016, from 52.2 in March. The Japanese markets remain closed for the rest of this week for the Golden Week holiday.