Indian benchmarks display spirited performance; Sensex rallies over 400 pts

The May series futures and options expiry session turned out to be a action-packed event for the Indian equity indices, as they staged a smart intraday rally and even went ahead to conquer the psychological 9,500 (Nifty) and 30,700 (Sensex) levels. Investors continued to build hefty positions across the board as sentiments got a boost after Cabinet approved dismantling of the two-decade-old Foreign Investment Promotion Board (FIPB) and defined a new mechanism to approve overseas investment applications and hasten fund flows. The move will avoid the need for multiple clearances. It also approved the much-awaited strategic partnership policy for defence manufacturing and a new government procurement policy that will give preference to local goods. Besides, fresh spell of buying by foreign investors who were net sellers for several sessions, further recovery in the rupee, and roll over of position in F&O market, also contributed to the gains. The markets paid no heed to the industry body Assocham’s statement that implementing GST from July 1 will be a challenge for the industry and the government should consider relaxing penal provisions for a couple of quarters to help it comply with the new tax regime. Meanwhile, Pharmaceutical stocks have continued their downfall, posting losses for the second consecutive session. In scrip specific development, Lupin hogged the limelight with the stock hitting its lowest level since August 2014 after the company’s quarterly net profit nearly halved to Rs 380 crore in March quarter (Q4FY17) from a year ago. On the other hand, shares of private sector banks were in focus with Nifty Bank and Nifty Private Sector Bank indices hitting their respective record highs after a strong run-up in ICICI Bank, HDFC Bank, YES Bank and IndusInd Bank.

On the global front, Asian markets ended higher on Thursday after the US Federal Reserve signalled a cautious approach to future rate hikes and the reduction of its $4.5 trillion of bond holdings. Investors are looking ahead to an OPEC meeting later in the day, which is widely expected to extend output cuts.  Japanese market edged higher after the yen weakened in Asian trade, while a surge in index-heavyweights such as SoftBank supported sentiments. In China, stocks are rallying a day after Moody's Investors Service reduced its rating on the country amid concerns over rising debt and slowing economic growth. Meanwhile, European shares opened higher, but quickly dipped into negative territory.

Back home, the benchmark got off to a rollicking opening, as investors rejoiced after the Federal Reserve hinted at a cautious, gradualist approach to future rate increases. Thereafter, the frontline indices slowly but steadily started gathering steam and surged by around half a percent by late morning trades. Second half of the session saw the key gauges capitalize on the momentum further and spurt to session's highest levels in dying moments. Finally, the NSE's 50-share broadly followed index Nifty got buttressed by over one and half a percent to settle above the crucial 9,500 support level, while Bombay Stock Exchange's Sensitive Index-Sensex accumulated over four hundred points and closed above the psychological 30,700 mark. Moreover, the broader markets too participated in the rally and closed with gains of over a percent. On the BSE sectoral space, the Capital Goods index soared by over three percent being the top gainer, followed by the rate sensitive Banking and Industrials counters too gained good traction and went home with over two percent gains. On the flipside, the Healthcare and Consumer Durablessectors languished at the bottom of the table with losses of 1.76% and 0.11% respectively, being the only laggards in the space.

The market breadth remained optimistic, as there were 1877 shares on the gaining side against 806 shares on the losing side, while 146 shares remained unchanged.

Finally, the BSE Sensex gained 448.39 points or 1.48% to 30750.03, while the CNX Nifty was up by 149.20 points or 1.59% to 9,509.75. 

The BSE Sensex touched a high and a low of 30793.43 and 30352.26, respectively and there were 24 stocks on gainers side as against 6 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 1.35%, while Small cap index was up by 2.01%.

The top gaining sectoral indices on the BSE were Capital Goods up by 3.52%, Bankex up by 2.82%, Industrials up by 2.53%, IT up by 2.32% and Realty up by 2.01%, while Healthcare down by 1.76% and Consumer Durables down by 0.11% were the only losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 4.97%, ICICI Bank up by 3.52%, HDFC Bank up by 3.04%, Infosys up by 2.97% and GAIL India up by 2.87%. On the flip side, Lupin down by 7.31%, Dr. Reddy’s Lab down by 3.70%, Cipla down by 3.12%, Sun Pharma down by 1.87% and Power Grid down by 0.58% were the top losers.

Meanwhile, with an aim to improve the efficiency of the inland water transport sector, the Union Cabinet chaired by the Prime Minister Narendra Modi has given its nod to allocate 2.5 percent of Central Road Fund (CRF) proceeds for National Waterways (NWs) that would result in around Rs 2000 crore proceeds per annum for their development and maintenance. CRF is a duty on excise and customs imposed on petrol and high speed diesel. The cess at present is Rs 6 per litre.

The Cabinet has also directed that while implementing viable NWs projects, all such components that can be done on PPP basis, should be explored accordingly and government funding may be used only if private investment is not upcoming for any component. The Central Road Fund (Amendment) Bill, 2017 would be moved by the Ministry of Road Transport and Highways in the ensuing monsoon session of Parliament.

The Inland Waterways Authority of India (IWAI) has estimated that about Rs 25,000 crore would be required for development of identified projects on NWs till 2022-23. IWAI also planned to undertake work on the development of 24 NWs during the next three years. It is estimated that 1.8 lakh persons would be provided employment in the Inland Waterways Transport (IWT) sector in the next five years. Moreover, new employment opportunities are expected to be generated for operation and management of fairway, terminals, aids to navigation, barges, training, etc.

The CNX Nifty traded in a range of 9,523.30 and 9,379.20. There were 42 stocks in green as against 9 stocks in red on the index.

The top gainers on Nifty were Larsen & Toubro up by 4.78%, Bank of Baroda up by 3.33%, ICICI Bank up by 3.31%, Indusind Bank up by 3.24% and ACC up by 3.16%. On the flip side, Lupin down by 7.20%, Dr. Reddy’s Lab down by 3.73%, Cipla down by 2.88%, Sun Pharma down by 1.98% and UltraTech Cement down by 0.48% were the top losers.

The European markets were trading in green; UK’s FTSE 100 increased 7.87 points or 0.1% to 7,522.77, Germany’s DAX increased 7.59 points or 0.06% to 12,650.46 and France’s CAC increased 15.68 points or 0.29% to 5,357.02.

Asian equity markets ended in green on Thursday after minutes from the Federal Reserve's latest monetary policy meeting indicated another rate hike is likely in June, but is conditional on recent economic softness proving transitory. The Fed also indicated that its balance sheet would be trimmed. Meanwhile, Japanese stocks rose as the strong-yen trend paused, while a surge in index-heavyweights such as SoftBank supported sentiment. But gains were limited as the dollar-yen stayed in a narrow range after the US Federal Reserve dialed down on some of the more hawkish policy expectations in the market. Chinese stocks rose for the second straight session, a day after Moody's downgraded the credit rating of the world's second largest economy. Hong Kong shares ended higher even after Moody's downgraded Hong Kong's local and foreign currency issuer ratings shortly after cutting China's ratings on Wednesday. The markets in Indonesia are closed for the Ascension Day holiday.