Sensex extends rally mood after a day’s consolidation; surges 1.23%

Stock markets in India got an enthralling start of the May series futures and options contract expiry week with the benchmark equity indices vivaciously rallying around one and a quarter percent and outperforming most global peers. After showing signs of consolidation in last session, the key indices regained their vitality on Monday.

The markets remained in fine fettle through the session, though some profit booking at high levels was seen in early afternoon trades post oil minister’s comments that no date has been fixed yet for the EGoM to meet on deciding over diesel and LPG price hike. However, the markets soon rebounded tracking the rally in European markets and kept gathering from strength to strength to eventually snap the session around the high point of the day.

Sentiments from across the globe remained sanguine as investors drew some solace from opinion polls showing parties favoring Greece's bailout programs could be able to form a coalition government. Most Asian markets too recovered after a cautious opening and settled with notable gains.

Back home, leads from the domestic money market too were buttressing as the rupee extended its streak of appreciation for third straight session and strengthened to 55.18 against a dollar. While a report from rating agency Moody’s that rupee downslide won't hurt India's debt profile and will have only a limited impact on nation’s sovereign ratings, too did its bit in allaying investors’ concerns. 

On the BSE sectoral front, investors were seen piling positions in the rate sensitive Bankex counter which surged around two and half a percent being the top gainer in the space. The Power and Capital Goods pockets too traded with notable gains of around two percent, helping the frontline indices rally.

However, reports that the government has no immediate plans to raise the retail prices of diesel, kerosene and cooking gas did not go down well with investors and squared off positions from the PSU oil marketing companies like HPCL and BPCL which plunged between 1-2%. While other Oil & Gas majors like Gail India and ONGC too went home with notable losses putting bit of pressure on the benchmark indices.

On the global front, sentiments in Asian markets remained optimistic. But, after seeing the sharpest collapse in last six months, the Indonesian benchmark witnessed yet another gut wrenching session of sell-off of about four percent and kept market participants worried. Renewed fears that a potential Greek Euro-zone exit and slowing economic growth in China, the world’s second largest economy, would stall global economic recovery, prompted investors to dump riskier asset classes in the nation.

However, most markets in Europe too surged by around a percent each after an opinion poll indicated that Greece’s pro-austerity conservative New Democracy party swung into first place ahead of next month’s elections.

The NSE’s 50-share broadly followed index - Nifty jumped over one and a quarter percent to settle just below the psychological 5,000 support level while Bombay Stock Exchange’s Sensitive Index - Sensex soared by about two hundred points to finish above the crucial 16,400 mark. Moreover, the broader markets performed largely in tandem with their larger peers as they finished with gains of around a percent.

The markets surged on good volumes while the market breadth remained optimistic as there were 1,714 shares on the gaining side against 1,008 shares on the losing side while 116 shares remained unchanged.

Finally, the BSE Sensex surged 199.02 points or 1.23% to settle at 16,416.84, while the S&P CNX Nifty soared by 65.25 points or 1.33% to close at 4,985.65.

The BSE Sensex touched a high and a low of 16,439.97 and 16,273.49 respectively. The BSE Mid cap and Small cap indices were up by 1.21% and 0.87% respectively.

The major gainers on the Sensex were SBI up by 4.76%, BHEL up by 4.17%, Tata Power up by 3.81%, Hindalco up by 2.82% and Tata Motors up by 2.69%, while GAIL down by 2.62%, ONGC down by 1.26%, Maruti Suzuki down by 1.20%, Hindustan Unilever down by 0.82% and Jindal Steel down by 0.50% were the major losers on the index.

The top gainers on the BSE sectoral space were Bankex up by 2.42%, Power up by 2.33%, Consumer Durables (CD) up by 2.20%, Capital Goods (CG) up by 1.85% and Auto up by 1.74%, while there was no loser on the BSE sectoral space.

Meanwhile, the Petroleum Minister S Jaipal Reddy has categorically denied the possibility of a hike in the prices of diesel, kerosene and LPG in the near future. Reddy said, ‘not going to touch the price of LPG, diesel and kerosene.’

His comments have come at a time when the Congress has been drawing flak from its coalition partners over the steep hike in the prices of petrol. Congress party's ruling allies TMC and DMK have held street protests against the hike in petrol price.

No decision has also been taken regarding the meeting of the EGoM with respect to the hiking of diesel prices either. The meeting is expected to see participation from Congress party's ruling allies TMC and DMK. Both TMC and DMK have held street protests against the hike in petrol price and the Congress seems to be buying time before taking another step.

The EGoM has not met since June last year inspite of the fact that depreciation of the rupee and rising prices of global crude oil have been posing significant challenges. The current meeting, in which Reddy participated, was held at the inter-ministerial level and was called to discuss the inflationary impact of a diesel price hike on inflation.

The S&P CNX Nifty touched a high and low 4,994.95 and 4,931.30 respectively.

The top gainers on the Nifty were SBI up by 4.84%, BHEL up by 4.63%, Tata Power up by 4.20%, PNB up by 3.84% and Sesa Goa up by 3.75%.

On the flipside, GAIL down by 2.71%, BPCL down by 2.24%, Maruti Suzuki down by 1.39%, ONGC down by 1.23% and Ranbaxy down by 1.16% were the top losers on the index.

The European markets were trading in green, as France's CAC 40 up by 0.84%, Britain’s FTSE 100 up by 0.87%, while Germany's DAX up by 0.51%.

Sentiments turned bullish in the Asian region and all the major equity indices barring Jakarta Composite snapped the day’s trade in the positive terrain on Monday, after an opinion poll indicated that Greece’s pro-austerity conservative New Democracy party swung into first place ahead of next month’s elections. But, the gains remained capped amid reports that the Spanish government may consider tapping the euro zone’s temporary rescue fund in the coming weeks.

Meanwhile, mainland Chinese shares rallied over a percentage point amid expectations for a policy stimulus, while Hong Kong indices surged by 0.47% on Monday, lifted by strength in Chinese financials and growth-sensitive sectors, although below-average turnover suggested gains could be short-lived. Moreover, Taiwan stocks rose about a percentage point, snapping a three-day losing streak, led by banking and tech heavyweights such as TSMC.

South Korean markets remained closed on Monday for a public holiday on account of birthday of Gautama Buddha.