Markets end jubilant trade with significant gain

Indian equity benchmarks traded jubilantly on Friday, with Sensex and Nifty closing higher by over 500 and 100 points, respectively. Markets start the session on positive note, as the 15th Finance Commission, chaired by N K Singh, observed that the Gross Domestic Product (GDP) numbers suggest continued high growth over the medium term despite there have been fluctuations within the overall global trend. The Commission also noted that the revenue projections on direct taxes are healthy though on indirect taxes, there have been periodic fluctuations. Traders were optimistic with a report showing that the ongoing trade war between the US and China will help India tap export opportunities in both the countries in areas such as garments, agriculture, automobile and machinery.

Key indices further gained momentum in noon deals to settle near their intraday high points, as adding confident among market participants, Union Commerce Minister Suresh Prabhu said that strategic investments based on a clear sectorial analysis will further strengthen India's economic growth. He also emphasized on focusing on district-development led growth to drive inclusivity in the society. Some support also came with a private report that India-Mexico Business Chamber (IMBC) has been inaugurated with the basic objective to strengthen the growing India Mexico economic and commercial linkages. Market participants paid no heed towards credit rating agency Ind-Ra’s latest report stating that the rise in US-China trade tensions could lead to dumping of Chinese goods and weaker flow of foreign investment from the United States to emerging markets, including India.

On the global front, European markets were trading in red, as Italy's consumer price inflation rose in April. The data from the statistical office ISTAT showed that the consumer price index rose 1.1 percent year-on-year in April, following a 1.0 percent increase in March. Inflation was driven by a surge in prices of transport, recreation and of non-regulated energy products. Asian markets ended in red with investors reacted to conflicting reports about trade talks between the world's two largest economies. According to reports, China's state media signaled a lack of interest in resuming trade talks with the US under the current threat to escalate tariffs.

Back home, stocks related to the NBFCs remained in focus, after the Reserve Bank asked NBFCs with asset size of over Rs 5,000 crore to appoint board-approved chief risk officer (CRO) with adequate professional qualification and a fixed tenure. This is being done to augment risk management practices in view of the increasing role of non-banking financial companies (NBFCs) in direct credit intermediation. Further, banking sector stocks remained in focus with a private report that public sector banks are demanding a capital infusion of Rs 50,000 crore in the ongoing financial year 2019-20. There are expectations that higher recapitalisation will aid overall liquidity.

Finally, the BSE Sensex gained 537.29 points or 1.44% to 37,930.77, while the CNX Nifty was up by 150.05 points or 1.33% to 11,407.15.

The BSE Sensex touched a high and a low of 38,001.13 and 37,415.36, respectively and there were 24 stocks advancing against 07 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.08%, while Small cap index was up by 0.51%.

The top gaining sectoral indices on the BSE were Auto up by 2.45%, FMCG up by 2.31%, Bankex up by 2.00%, Consumer Disc up by 1.67% and Capital Goods up by 1.39%, while Healthcare down by 0.99%, IT down by 0.84%, TECK down by 0.46% and Metal down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 6.09%, Hero MotoCorp up by 4.26%, Maruti Suzuki up by 3.53%, Kotak Mahindra Bank up by 3.31% and Bajaj Auto up by 3.30%. On the flip side, Yes Bank down by 2.36%, Vedanta down by 1.44%, Infosys down by 1.42%, HCL Tech. down by 1.15% and Sun Pharma down by 0.74% were the top losers.

Meanwhile, the Federation of Indian Export Organisations (FIEO) has said that the ongoing trade tensions between the United States (US) and China is benefitting India. FIEO President Ganesh Kumar Gupta has indicated that India's exports to the US increased by 11.2 percent in 2018, while to China it went up 31.4 percent in the same year.

Gupta has stated that China is also more willing than ever before to provide better market access to India on a wide range of agriculture and processed food products. He also said that India would be getting better access to Chinese market as China would like to prove to its citizen that the tariff war has little or no impact on it.

Further, FIEO Director General Ajay Sahai said it is a ‘God-sent opportunity’ for India to seek huge investments from companies located in China. He also noted that all investments in China with prime focus on the US market may seek relocation and India would definitely be the option. He also emphasized on a need to move aggressively to woo such investors before they are allured by others.

The CNX Nifty traded in a range of 11,426.15 and 11,259.85. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 8.32%, Bajaj Finance up by 5.95%, Bajaj Finserv up by 4.75%, Maruti Suzuki up by 4.48% and Hero MotoCorp up by 4.15%. On the flip side, Dr. Reddy’s Lab down by 2.72%, Yes Bank down by 2.65%, IOC down by 1.79%, Vedanta down by 1.68% and Hindalco down by 1.39% were the top losers.

European markets were trading in red; UK’s FTSE 100 lost 18.05 points or 0.25% to 7,335.46, France’s CAC fell 10.87 points or 0.2% to 5,437.24 and Germany’s DAX was down by 82.36 points or 0.67% to 12,228.01.

Asian markets ended mostly lower on Friday despite the overnight gains on Wall Street for a third straight session following upbeat corporate earnings results and US economic data. Worries about US-China trade tensions continued to weigh on investor sentiment after the Trump administration banned Chinese telecom giant Huawei Technologies from buying US technology without prior approval from the US government. Chinese shares ended lower amid worries about the ongoing trade tensions between the US and China following US President Donald Trump's move to block Huawei. Though, Japanese shares closed higher, while the safe-haven yen weakened, lifting exporters' stocks.