Indian benchmarks end at record high; Nifty breaches 9500-mark

Indian benchmark indices continued their record-setting spree, closing at all-time highs for the fourth time in last five sessions with the Nifty closing above 9,500 level for the first time and the Sensex ending firmly above 30,500 mark. Bullishness seemed to be returning to the markets as investors aggressively piled up positions in key heavyweight stocks on account of robust foreign fund inflows, better-than-expected earnings by some blue-chip companies so far, and overnight gains in the US markets. Some support also came with the report that India's monsoon rains are expected to arrive on the southern Kerala coast on May 30, two days ahead of schedule. India looks likely to receive higher monsoon rainfall than previously forecast as concern over the El Nino weather condition has eased. Further, investors’ morale got a boost with Industry body FICCI’s latest Economic Outlook Survey pegging India's gross domestic product (GDP) growth at around 7.4% for the fiscal year 2017-18. The survey was conducted during March and April 2017 and recorded a median GDP group forecast of 7.4% for the current fiscal year, with a minimum and maximum level of 7% and 7.6% respectively. The pick-up in overall GDP growth will also be supported by an improvement in industry and services sector growth.

The markets paid no heed to the report that India’s trade deficit swelled to a 29-month high in April as imports led by gold grew sharper than exports. While Imports grew 49% from a year ago to $37.8 billion, buoyed by a 211% rise in gold imports, exports increased 19.7% to $24.6 billion, widening trade deficit to $13.2 billion from $4.8 billion in the year ago period. Meanwhile, India and Japan are together embarking upon multiple infrastructure projects across Africa, Iran, Sri Lanka and Southeast Asia in what could be viewed as pushback against China’s massive, unilateral infrastructure initiatives under the One Belt One Road (OBOR) project connecting it with Europe and Africa. While in East Africa, Delhi and Tokyo are planning to fund infrastructure and capacity building projects, Japan is expected to join the Indian foray into the expansion of Iran’s Chabahar port and the adjoining special economic zone.

On the global front, Asian equity markets ended mostly lower on Tuesday, as valuations look stretched with the latest rally taking place in thin volumes and led by just a few sectors.  Chinese markets edged lower, after data on Monday disappointed with retail sales and industrial production seeing slower growth in April, while fixed asset investment in the first four months of the year failed to meet expectations, rising just 8.9% compared with the same period the year before. However, Japan's Nikkei share average ended higher, drawing support from a sagging yen and Wall Street hitting record highs overnight. Meanwhile, European Markets were trading mostly lower in early trade, as disappointing earnings updates weighed on banks and pharma stocks, though a well-received outlook from Vodafone helped Britain's FTSE 100 touch a record high.

Back home, after getting a firm start, the local frontline indices slowly started gathering steam and surged around half a percent by noon 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 over half a percent to settle below the crucial 9,500 support level while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated over two hundred points and closed above the psychological 30,500 mark. The broader markets underperformed their larger peers by good margin as the BSE’s midcap index went home with gains of 0.27% while the smallcap index climbed 0.38%.

The market breadth remained optimistic, as there were 1435 shares on the gaining side against 1344 shares on the losing side, while 181 shares remained unchanged.

Finally, the BSE Sensex gained 258.63 points or 0.85% to 30580.75, while the CNX Nifty was up by 64.80 points or 0.69% to 9,510.20. 

The BSE Sensex touched a high and a low of 30590.71 and 30363.37, respectively and there were 20 stocks on gainers side as against 10 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.27%, while Small cap index was up by 0.38%.

The top gaining sectoral indices on the BSE were Telecom up by 2.04%, TECK up by 1.13%, IT up by 1.07%, Auto up by 1.07% and Realty up by 1.00%, while Metal down by 0.57% was the sole losing index on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 3.09%, Bharti Airtel up by 2.98%, TCS up by 2.66%, ITC up by 2.20% and SBI up by 2.18%. On the flip side, Mahindra & Mahindra down by 1.02%, ONGC down by 0.96%, Coal India down by 0.88%, Cipla down by 0.33% and GAIL India down by 0.30% were the top losers.

Meanwhile, continuing the rising streak for the eighth straight month, India’s merchandise exports stood at $24635.09 million, up by 19.77 percent in month of April 2017, as compared to $20568.85 million in April 2016, primarily due to robust performance by sectors such as petroleum, textiles, engineering goods as well as gems and jewellery. In rupee term the exports during the month stood at Rs 158913.79 crore, which was 16.23% higher compared to Rs 136720.11 crore during April, 2016. Besides, Non-petroleum and Non Gems & Jewellery exports in April 2017 were valued at $17718.87 million as against $ 15136.41 million in April 2016, an increase of 17.06%. 

However, trade deficit during April 2017 also witnessed about three-fold increase to $13249.19 million as compared to $4844.87 million in the same month last fiscal, mainly on account of sharp jump in gold and crude oil imports during the month. Overall taking merchandise and services together the trade balance improved, overall trade deficit for April- March 2016-17 was estimated at $ 40980.00 million, 16.87 percent lower in Dollar terms than the level of $ 49297.53 million during April-March 2015-16.

The country's imports too increased during the month and stood at $37884.28 Million, up by 49.07 per cent as compared to at $25413.72 million in April, 2016. In rupee terms the imports were of Rs 244380.52 crore, 44.67 per cent higher from Rs 168923.71 crore in April, 2016.

Oil imports during April, 2017 were valued at $7359.27 million which was 30.12% higher than oil imports valued at $5655.92 million in April 2016. Non-oil imports during April, 2017 were estimated at $ 30525.01 million which was 54.50% higher than non-oil imports of $ 19757.80 million in April, 2016.

The CNX Nifty traded in a range of 9,517.20 and 9,456.35. There were 37 stocks in green as against 14 stocks in red on the index.

The top gainers on Nifty were Hero MotoCorp up by 3.03%, ACC up by 2.80%, Bharti Airtel up by 2.77%, TCS up by 2.73% and Bank of Baroda up by 2.33%. On the flip side, Kotak Mahindra Bank down by 1.42%, Hindalco down by 1.11%, ONGC down by 0.68%, Indiabulls Housing down by 0.87% and Coal India down by 0.70% were the top losers.

The European markets were trading mostly in red; France’s CAC decreased 19.56 points or 0.36% to 5,397.84, Germany’s DAX decreased 17.9 points or 0.14% to 12,789.14, while UK’s FTSE 100 increased 42.28 points or 0.57% to 7,496.65.

Asian equity markets ended mostly in red on Tuesday following weaker economic data from China. Government data showed growth in industrial activity, credit, investment and housing sector activity decelerated in April. That added to indications growth in the world's second-largest economy peaked in the first quarter and is declining. Chinese leaders are tightening access to credit to reduce reliance on debt and investment but April's downturn was sharper than forecast. Further, the Washington Post reported that US President Donald Trump revealed ‘highly classified information’ about a planned Islamic State Operation to two top Russian officials last week, with lawmakers calling the alleged disclosures ‘inexcusable’ and ‘deeply disturbing.’ Though, Chinese shares reversed earlier losses to close notably higher as signs that the government is moving to ease liquidity conditions helped offset worries over slowing economic growth. Japanese shares ended a tad higher as oil continued to rally and the yen weakened against the dollar.