Indian benchmarks stage a remarkable rally; Nifty ends over 9,400 mark

Euphoric Indian equities showcased an impressive performance on Wednesday by conquering the crucial 9,400 (Nifty) and 30,200 (Sensex) levels, as shares of consumer goods and agriculture-dependent companies rallied after the country's weather office forecast a higher monsoon rainfall than previously expected. India looks likely to receive above average monsoon rainfall as concern over the El Nino weather condition has eased in the past few weeks, the chief of the India Meteorological Department (IMD) said on Tuesday, raising prospects of higher farm and economic growth. El Nino, a warming of ocean surface temperatures in the eastern and central Pacific that typically occurs every few years and was linked to crop damage, fires and flash floods, faded in 2016. Sentiments also got a leg up after data showed that foreign funds, which were net sellers on the Indian bourses for the past few sessions, made fresh purchases in yesterday's trade. Foreign institutional investors bought shares worth Rs 333 crore in Tuesday's session. Some support also came with the report that Prime Minister Narendra Modi has reviewed progress of key infrastructure sectors including petroleum and natural gas, power, renewable energy and housing. The Prime Minister called for greater emphasis on ethanol blending, and evolution of mechanisms so that farmers can benefit the most from this process. Investors also took some encouragement with the private report that Indian business leaders are the most confident among the world's 10 largest economies. The confidence of Indian leaders rose 3.2 points to 66 in the first quarter of 2017, reversing the decline seen in the fourth quarter of 2016, when confidence dipped in the immediate aftermath of the government's decision to invalidate old high-value currency notes.

On the global front, Asian equity markets ended mixed on Wednesday as investors digested corporate earnings and US President Donald Trump's abrupt dismissal of FBI Director James Comey. Tensions surrounding North Korea also kept underlying sentiment cautious. Japanese market ended higher, shrugging off concerns surrounding regional security and political developments in the US. The yen weakened against the dollar, helping lift exporters' shares. On the other hand, South Korean stocks led losers as investors took profits after liberal leader Moon Jae-in was elected president, while Chinese shares closed lower after factory gate prices ion the world's second-biggest economy cooled more than expected in April. Meanwhile, most of the European counterparts traded with a negative bias and France's CAC shed around quarter percent, being the biggest laggard in the space.

Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. Thereafter, the frontline indices slowly but steadily started gathering steam and surged by over half a percent by late morning trades. The bourses further capitalized on the momentum and spurted in afternoon trades on the back of broad based bottom fishing in undervalued stocks. Eventually, the NSE's 50-share broadly followed index Nifty, got buttressed by close to a percent to settle above the crucial 9,400 support level, while Bombay Stock Exchange's Sensitive Index-Sensex accumulated over three hundred points and closed above the psychological 30,200 mark. The broader markets largely mirrored their larger peers as the BSE's midcap index went home with 0.87% gains, while the smallcap index could only manage 0.75%. The market breadth remained optimistic, as there were 1627 shares on the gaining side against 1220 shares on the losing side, while 174 shares remained unchanged.

Finally, the BSE Sensex gained 314.92 points or 1.05% to 30248.17, while the CNX Nifty was up by 90.45 points or 0.97% to 9,407.30. 

The BSE Sensex touched a high and a low of 30271.60 and 29987.44, respectively and there were 22 stocks on gainers side as against 8 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.87%, while Small cap index was up by 0.75%.

The top gaining sectoral indices on the BSE were Telecom up by 4.59%, FMCG up by 1.81%, Auto up by 1.47%, Energy up by 1.34% and Consumer Disc up by 0.95%, while IT down by 0.42% and Realty down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 7.87%, Hindustan Unilever up by 4.60%, HDFC up by 3.25%, Mahindra & Mahindra up by 2.59% and Reliance Industries up by 2.17%. On the flip side, Wipro down by 1.64%, Asian Paints down by 1.14%, ICICI Bank down by 0.91%, TCS down by 0.86% and GAIL India down by 0.84% were the top losers.

Meanwhile, government has set up a high-level task force in order to deal with employment data discrepancies and ensure the timely availability of reliable information regarding job creation. The task force will recommend solutions which can be implemented in a time-bound manner. The government attaches the highest priority to job creation.

The Prime Minister Narendra Modi has directed that this task be expedited so that policies on employment can be formulated with a proper appreciation of impacts, based on credible data. India suffers from a lack of reliable, timely data on employment which has made it difficult for policy makers and independent observers to assess the extent of employment generation at different points of time. Some data is collected and published by certain agencies including the Labour Bureau, but the coverage is very small as it covers only a few sectors and the methodology is not based on updated panel of survey respondents.

The task force will be headed by government think tank NITI Aayog Vice Chairman Arvind Panagriya. The other members will include Labour Secretary M Sathiyavathy, Secretary of Statistics TCA Ananth, Pulak Ghosh of NITI Aayog and Manish Sabharwal, chairman of human resource services TeamLease.

The CNX Nifty traded in a range of 9,414.75 and 9,336.00. There were 33 stocks in green as against 18 stocks in red on the index.

The top gainers on Nifty were Bharti Airtel up by 7.98%, ZEEL up by 4.93%, Hindustan Unilever up by 4.51%, Aurobindo Pharma up by 4.15% and HDFC up by 3.10%. On the flip side, Wipro down by 1.79%, Tata Power down by 1.68%, Ultratech Cement down by 1.52%, Asian Paints down by 1.31% and HCL Technologies down by 1.02% were the top losers.

European markets were trading mixed; France’s CAC decreased 3.59 points or 0.07% to 5,394.42 and Germany’s DAX was down by 3.57 points or 0.03% to 12,745.55, while UK’s FTSE 100 was up by 16.12 points or 0.22% to 7,358.33.

Asian equity markets made a mixed closing on Wednesday as investors digested corporate earnings and US President Donald Trump's abrupt dismissal of FBI Director James Comey. Tensions surrounding North Korea also kept underlying sentiment cautious. Chinese shares ended lower after inflation data painted a mixed picture of the economy. Data published by the National Bureau of Statistics showed that China's inflation accelerated to a 3-month high in April, while factory gate inflation eased on weakening commodity prices. Meanwhile, Japanese shares ended marginally higher, shrugging off concerns surrounding regional security and political developments in the US. The yen weakened against the dollar, helping lift exporters’ shares. Markets in Malaysia and Singapore were closed in observance of Vesak Day.