Markets extend winning streak for third straight day

Extending their northward journey for third straight session, Indian equity benchmarks ended the Monday’s trade in green terrain with frontline gauges recapturing their crucial 35,100 (Sensex) and 10,650 (Nifty) levels, as oil extended a steep decline in the previous session, helping ease recent fears over inflation, current account and fiscal deficits. Markets started the session on an optimistic note with traders taking encouragement with Industry chamber CII’s statement that businesses across several key sectors are seeing firm growth in sales and orders, indicating that the economy is on a recovery path and investments will pick up. CII said the impact of sustained structural reforms is now being felt on the ground as a mammoth economy is turning around. Some support also came with CARE Ratings’ report stating the country’s industrial output is expected to log five to six per cent growth in this fiscal, bettering 4.3% growth rate clocked in the previous fiscal. Adding to the optimism, a private report said India’s economy may have expanded by 7.1-7.5% in the January-March quarter - driven by manufacturing and construction - compared with 7.2% in the third quarter. Meanwhile, the finance ministry is planning to set up a fund under the National Investment and Infrastructure Fund (NIIF) dedicated for strategic investments.

Local bourses added some more gains in second half on report stating that India is in a ‘good position’ to deal with any fallout from global trade tensions and with right policies can reach an 8%-plus growth rate and hold it. The report also said that India’s services sector exports remain globally competitive and have a huge potential. Investors also took note of Commerce and Industry Minister Suresh Prabhu’s statement that India has a huge potential to boost trade and investments with Russia. Some support also came with Finance Minister Arun Jaitley’s statement that India has transformed from being a part of the ‘fragile five’ to the ‘bright spot’ on the global economic stage. He added that the government will now focus on consolidation of the initiatives taken in the past.

On the global front, European stocks gave up early gains and bond yields recovered from lows as early elections loomed in Italy after the anti-establishment 5-Star and League parties abandoned plans to form a government. Asian markets closed mostly in green, on signs that the United States and North Korea were working towards holding a summit in June.

Back home, shares of public sector banks (PSBs) edged higher for the sixth straight trading days on the back of expectations of an improvement in the asset quality going ahead. Shares of airline companies such as Jet Airways, SpiceJet and InterGlobe Aviation (Indigo) flied high thanks to a correction in global oil prices that are likely to help airlines reduce their operating cost. However, majority of IT stocks ended lower despite IT Minister Ravi Shankar Prasad stating that they are soon going to finalise the new electronics policy whose sub-segment will be export-oriented initiatives in the field of electronics. He also said that India is aspiring to become a $1 trillion digital economy in next few years, riding on opportunities in areas like IT and IT enabled services, e-commerce, electronics manufacturing, digital payments and cyber security.

Finally, the BSE Sensex rose 240.61 points or 0.69% to 35,165.48, while the CNX Nifty was up by 83.50 points or 0.79% to 10,688.65.

The BSE Sensex touched a high and a low of 35,240.96 and 35,006.50, respectively and there were 23 stocks on gaining side as against 8 stocks on losing 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 1.60%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.50%, Oil & Gas up by 2.47%, PSU up by 2.45%, Healthcare up by 2.11% and Industrials was up by 1.71%, while IT down by 1.72% and TECK was down by 1.33% were the only losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 7.11%, Coal India up by 3.22%, Larsen & Toubro up by 2.52%, Asian Paints up by 2.31% and SBI up by 1.97%. On the flip side, TCS down by 2.39%, Power Grid Corporation down by 2.31%, Infosys down by 1.16%, Mahindra & Mahindra down by 0.90% and Bharti Airtel down by 0.65% were the top losers.

Meanwhile, the Finance Ministry is planning to set up a fund under the National Investment and Infrastructure Fund (NIIF) dedicated for strategic investments. The Ministry’s discussions with investors are at advanced stage and it should be operational soon. Earlier this year, the NIIF kick started its funding activity with Dubai-based ports operator DP World by creating a platform for investing up to $3 billion of equity in the transport and logistics sectors in India.

The NIIF is planning to raise Rs 8,000 crore from various sources for the purpose of funding projects worth Rs 16,000 crore for the current fiscal. The government has provided budgetary support to NIIF by allocating Rs 1,000 crore that will be leveraged for raising Rs 8,000 crore from strategic anchor partners, such as multilateral and bilateral institutions, sovereign wealth funds, pension funds and domestic public sector enterprises.

The NIIF is being operationalised by establishing three Alternative Investment Funds (AIFs) under the SEBI Regulations. The proposed corpus of NIIF is Rs 40,000 crore. The government’s contribution to the AIFs under the NIIF scheme will be 49 percent of the total commitment. The NIIF has mandate to solicit equity participation from strategic anchor partners, like overseas sovereign/quasi-sovereign/multilateral /bilateral investors.

The CNX Nifty traded in a range of 10,709.80 and 10,640.55. There were 34 stocks in green as against 16 stocks in red on the index.

The top gainers on Nifty were Sun Pharma up by 6.55%, HPCL up by 6.18%, BPCL up by 5.44%, GAIL India up by 5.37% and Lupin up by 4.95%. On the flip side, Tech Mahindra down by 3.81%, Power Grid Corporation down by 2.43%, TCS down by 2.41%, HCL Tech down by 2.07% and Hindalco down by 1.63% were the top losers.

The European markets were trading mostly in red; Germany’s DAX decreased 26.21 points or 0.2% to 12,911.80 and France’s CAC was down by 18.26 points or 0.33% to 5,524.29, while UK’s FTSE 100 was up by 13.54 points or 0.18% to 7,730.28.

Asian equity markets ended mostly higher on Monday as signs the United States and North Korea were still working towards holding a summit helped investors shrug off falling commodity prices. Japanese shares ended marginally higher amid positive developments from the Korean Peninsula. Though, Chinese shares fluctuated before closing slightly lower even as a government report showed China's industrial profit growth quickened markedly in April. Chinese industrial profits surged 21.9 percent year-over-year in April, well above the 3.1 percent increase in March. In the first four months of this year, industrial profits advanced 15.0 percent annually compared with an 11.6 percent rise in the first three months.