Bulls tighten grip; Sensex reclaims 34,900 mark

Bulls tightened their grip on Dalal Street with key gauges ending near their crucial 35,000 (Sensex) and 10,700 (Nifty) levels. Markets started the session on an optimistic note with private report stating that India’s economic growth will accelerate to 7.2% in the current fiscal buoyed by manufacturing activity even as rising oil prices and high government debt remain a challenge. The agriculture sector is expected to grow higher than the estimated 2.1% in the current fiscal year on account of positive prospects on Rabi harvest and a normal monsoon. Markets traded jubilantly throughout the session as traders took encouragement with NITI Aayog’s statement that 3.53 million (35.3 lakh) new jobs were generated between September 2017 and February this year. The EPFO data shows that from September 2017 to February 2018, 3.1 million (31.10 lakh) new payroll additions were made across all age groups.

Adding to the optimism, Confederation of Indian Industry’s (CII) president Rakesh Bharti Mittal said that demand in the economy is picking up and it is time private investment started flowing in. He added that India’s economic environment started improving due to introduction of major reforms such as GST, Insolvency and Bankruptcy Code, and fixed-term employment. Some support also came after global credit rating agency Fitch affirmed India’s sovereign rating at ‘BBB-’ with stable outlook, saying that the country’s medium-term growth potential is strong. The agency added that India’s rating balances a strong medium-term growth outlook and favourable external balances with weak fiscal finances and some lagging structural factors, including governance standards and a still-difficult, but improving, business environment. It projected India’s growth at 7.3% in current the fiscal and further to 7.5% in 2019-20.

Firm opening in European markets too aided sentiments. Britain’s economy slowed much more sharply than expected in the first three months of 2018, with heavy snow only partly to blame, prompting investors to slash their bets on a Bank of England rate rise next month. Asian equity markets ended in green on Friday as a rebound in technology stocks on strong earnings and a drop in US Treasury yields helped improve investors’ risk appetite. 

Back home, select stocks related to Non-banking finance companies (NBFC) and housing finance companies remained in limelight after CRISIL in its report highlighted that wholesale credit book of these companies, which includes real estate and infrastructure lending, is likely to grow at 21% annually till 2020. Stocks related to gems and jewellery sector lost shine on report that the gems and jewellery exports have declined by 8.67% to Rs 2,64,130.64 crore in financial year 2017-18, mainly due to drop in demand from the UAE. In scrip specific development, Thermax advanced on bagging Rs 279 crore order for captive cogeneration power plant and Phoenix Mills gained on acquiring entire stake in DHSPL. Mixed reactions witnessed in sugar stocks after ICRA highlighted that the government support will be crucial for successful implementation of the targeted sugar exports, otherwise current low global sugar prices will render exports un-remunerative for the millers. Given a significantly higher-than-anticipated domestic sugar production for sugar year 2018 (SY2018) which resulted in a downside correction in sugar prices, to a low of Rs 28,500 per metric tonne (MT) in April 2018 (all prices quoted in this report are ex-mill UP), the government has allowed for sugar exports of 2 million MT during SY2018.

Finally, the BSE Sensex surged 256.10 points or 0.74% to 34,969.70, while the CNX Nifty was up by 74.50 points or 0.70% to 10,692.30.

The BSE Sensex touched a high and a low of 35,065.37 and 34,744.73, respectively and there were 20 stocks on gaining side as against 10 stocks on losing side, while one stock remain unchanged on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.79%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Bankex up by 2.00%, Capital Goods up by 1.40%, Energy up by 1.32%, PSU up by 1.25% and Oil & Gas was up by 1.05%, while IT down by 1.06%, TECK down by 0.74% and Consumer Durables was down by 0.25% were the few losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 8.97%, SBI up by 3.99%, ICICI Bank up by 3.34%, Sun Pharma up by 2.28% and Larsen & Toubro up by 2.23%. On the flip side, TCS down by 2.42%, Wipro down by 2.17%, Maruti Suzuki down by 1.90%, Coal India down by 1.64% and Hero MotoCorp down by 1.20% were the top losers.

Meanwhile, Civil Aviation Minister Suresh Prabhu has highlighted that there is the need for making India the next cargo hub. He also emphasised on manufacturing of aircraft hardware in India, developing a robust chopper service and carrying out a demand survey for development of routes.

The Minister said that as aviation is a service driven industry, customer feedback was crucial for better service delivery. He also said that the suggestions of members of Parliament should also be taken note of in a proper manner for bettering services.

Prabhu noted that the government is undertaking programmes for skill development in cooperation with airlines as there was a huge job requirement in the civil aviation sector and related sectors also. With an aim to make India the next cargo hub, he said that suggestions have been invited from all stakeholders on the proposed cargo policy.

The CNX Nifty traded in a range of 10,719.80 and 10,647.55. There were 36 stocks in green as against 14 stocks in red on the index.

The top gainers on Nifty were Axis Bank up by 9.37%, SBI up by 4.29%, ICICI Bank up by 3.21%, HPCL up by 3.16% and Sun Pharma up by 2.42%. On the flip side, HCL Tech down by 3.36%, Tech Mahindra down by 3.04%, TCS down by 2.30%, Maruti Suzuki down by 1.98% and Wipro down by 1.87% were the top losers.

The European markets were trading in green; France’s CAC gained 13 points or 0.24% to 5,466.58, UK’s FTSE 100 increased 48.22 points or 0.65% to 7,469.65 and Germany’s DAX was up by 97.45 points or 0.78% to 12,597.92.

Asian equity markets ended in green on Friday as a rebound in technology stocks on strong earnings and a drop in US Treasury yields helped improve investors' risk appetite.  Also, the European Central Bank and the Bank of Japan maintained their policy mix, as widely expected, helping support underlying sentiments. Japanese shares closed near three-month highs after the Bank of Japan kept its monetary policy steady, as widely expected, but dropped its target date for achieving its 2 percent inflation target. Investors also digested a raft of economic data. Japan's industrial output rose 1.2% sequentially in March to beat forecasts and the jobless rate held flat at 2.5% in line with expectations, while retail sales and consumer inflation figures fell short of expectations. Further, Chinese shares finished higher as gains in healthcare shares offset losses in consumer stocks, and as market participants continued to watch the developments of China-US trade spat.