Indian benchmarks end at record highs; Sensex breaches 31000 mark

Indian benchmark indices showcased yet another courageous performance and went on to outclass indices around the world by vivaciously rallying by around a percentage in the session and settling above the psychological 9,550 (Nifty) and 31,000 (Sensex) levels for the first time ever. Thursday’s optimism got spilled over into the Friday’s session helping the frontline indices in extending the winning momentum for second successive session as higher derivatives rollover led to strong follow-up buying in index heavyweights on the first day of June series. Broader market outperformed benchmark indices with the S&P BSE Midcap and the S&P BSE Smallcap indices gaining over one and half a percent each. Investors continued to build hefty positions across the board as sentiments got a boost after the report that India retained its numero uno position being the world's top most greenfield FDI investment destination for the second consecutive year, attracting $62.3 billion in 2016. FDI by capital investment saw an increase of 2%to $62.3 billion in 809 projects during 2016 in India. The report has pointed that the global investment landscape has changed considerably in the last year as FDI gravitated to locations experiencing the strongest economic growth, while locations in recession or facing high levels of uncertainty saw major declines. Some support also came with private weather forecaster Skymet’s statement that the increase in pre-monsoon showers across India is hinting at the arrival of monsoon 2017, which is not very far away. The weather forecasting agency predicted that monsoon will make an onset over Kerala by May 29, with a margin of error of three days. Meanwhile, Airline stocks gained traction on expectations that a slide in oil prices would reduce carriers' fuel cost. Crude oil skidded 5% after OPEC and allied producers announced extended output cuts that disappointed investors. Both Jet Airways and Global Vectra Helicorp jumped over 3%, while InterGlobe Aviation rose over a percent.

On the global front, Asian equity markets made a mixed closing on Friday, tracking the overnight plunge in crude oil prices after news that OPEC and other major exporters extended their current deal to limit oil production for nine months, disappointing investors who were anticipating deeper cuts. The risk of a rate hike by the U.S. Federal Reserve in June is still sort of hanging over the market, while some Investors were looking ahead to US data on durable goods orders, first-quarter economic growth and consumer sentiment due later in the day. Hong Kong stocks broke a five-day winning streak on Friday, as gains in air carriers were offset by weakness in energy shares following a tumble in oil prices. Further, Chinese investors failed to lend support to the market during the session because two cross-border connect schemes - the source of steady liquidity support from the mainland - have been suspended due to the Dragon Boat Festival holiday, which starts on Sunday. Meanwhile, European stocks declined, erasing a weekly advance, as energy shares tracked oil lower after an OPEC output deal failed go beyond a plan flagged days earlier.

Back home, the benchmark got off to an optimistic opening, shrugging the sluggish sentiments prevailing in Asian markets. The frontline indices soon gathered momentum and traded with around half a percent gains through the morning session of trade. Second half of the session saw the key gauges capitalize on the momentum further and spurt to session’s highest levels in dying hour. Finally, the NSE's 50-share broadly followed index Nifty got buttressed by around a percent to settle above the crucial 9,550 support level, while Bombay Stock Exchange's Sensitive Index-Sensex accumulated over two hundred and fifty points and closed above the psychological 31,000 mark. The market breadth remained optimistic, as there were 1829 shares on the gaining side against 836 shares on the losing side, while 183 shares remained unchanged.

Finally, the BSE Sensex gained 278.18 points or 0.90% to 31028.21, while the CNX Nifty was up by 85.35 points or 0.90% to 9,595.10. 

The BSE Sensex touched a high and a low of 31074.07 and 30745.57, 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 2.06%, while Small cap index was up by 1.60%.

The top gaining sectoral indices on the BSE were Metal up by 3.40%, Energy up by 2.20%, Basic Materials up by 2.11%, Oil & Gas up by 2.08% and Industrials up by 1.83%, while Healthcare down by 0.76% was the sole losing index on BSE.

The top gainers on the Sensex were Tata Steel up by 5.46%, ITC up by 2.99%, Power Grid Corporation up by 2.57%, Reliance Industries up by 2.53% and Adani Ports & SEZ up by 1.82%. On the flip side, Sun Pharma down by 3.93%, Cipla down by 2.48%, Lupin down by 2.29%, TCS down by 1.55% and Dr. Reddy’s Lab down by 0.64% were the top losers.

Meanwhile, Indian economy is expected to rise marginally in the fourth quarter (Q4) of financial year (FY) 2017. Credit rating agency, ICRA in its latest report has said that the gross domestic product (GDP) and gross value added (GVA) of the country may expand to 7.1 per cent and 6.9 per cent, respectively during Q4 of FY17, up from the preceding quarter’s estimates of 7 per cent and 6.6 per cent, respectively.

The rating agency though said that the gradual remonetisation would result in some improvement in Q4 estimates relative to Q3 FY2017. It noted that when compared on a year-on-year basis, the pace of growth of GDP and GVA in Q4 is expected to be slower to Q4 FY2016 of 8.4 percent and 8.1 percent, respectively. The report further said that the construction sector will contract by 1 per cent on a GVA basis due to the noteban.

The agency said that the 6.9 per cent GVA growth for the quarter rests on a 8.8 per cent Y-o-Y growth in services, and a moderate rise of 5.4 per cent and 4 per cent, respectively, in industry and agriculture, forestry and fishing. It expects healthy growth in service sector on the back of double-digit rise in sub-sectors like air cargo traffic, bank deposits, corporate bonds, commercial paper and Centre’s non-interest non-subsidy revenue expenditure.

It also said that the new Wholesale Price Index (WPI) and Index of Industrial Production (IIP) series, could lead to revisions in GDP and GVA levels and growth rates from FY2013 onward could undergo revisions, at constant prices, stating that the growth rate for FY17 will differ materially from the second advance estimates released by the CSO in February 2017.

The CNX Nifty traded in a range of 9,604.90 and 9,495.40. There were 37 stocks in green as against 14 stocks in red on the index.

The top gainers on Nifty were Tata Steel up by 5.49%, Vedanta up by 4.15%, Hindalco up by 4.04%, Indiabulls Housing Finance up by 3.92% and BPCL up by 3.60%. On the flip side, Sun Pharma down by 4.36%, IOC down by 2.97%, Cipla down by 2.53%, Lupin down by 2.47% and TCS down by 2.08% were the top losers.

The European markets were trading mostly in red; Germany’s DAX decreased 49.66 points or 0.39% to 12,572.06, France’s CAC decreased 38.96 points or 0.73% to 5,298.20, while UK’s FTSE 100 increased 9.38 points or 0.12% to 7,527.09.

Asian equity markets made a mixed closing on Friday, tracking the overnight plunge in crude oil prices after news that OPEC and other major exporters extended their current deal to limit oil production for nine months, disappointing investors who were anticipating deeper cuts. Investors also turned cautious following media reports that Jared Kushner, the son-in-law and adviser of US President Donald Trump, has come under FBI scrutiny in its Russia probe. Japanese shares closed lower on the yen's gains against the US dollar. Meanwhile, China stocks reversed earlier losses to end the week higher on Friday, led by the blue-chip CSI300 index posting its best week in six months as suspected state-directed buying offset concerns over a surprise move by Moody's to cut the country's credit rating.