Bourses resume record run on F&O expiry

Gaining significant ground, Indian equity benchmarks resumed their record closing spree on Thursday, with Sensex and Nifty settling above their psychological levels of 39,800 and 11,900, respectively. Key indices made a positive start of the day, as the Department for Promotion of Industry and Internal Trade (DPIIT) proposed to formulate a national retail policy with an aim to support growth of domestic trade. The national retail policy will be formulated to support development of the sector that would benefit 65 million small traders. Adding comfort among market participants, the Reserve Bank of India (RBI) extended minimum holding period requirement for Non-banking financial companies (NBFCs) to raise funds via loan securitisation to help the sector overcome liquidity shortage.

Further, rally continued on the streets, after investments in the domestic capital market through participatory notes, led by equity allocation, rose to Rs 81,220 crore at the end of April on hopes of favourable market conditions. Out of the total investments made till April-end, Rs 58,820 crore was invested in the equities segment, Rs 21,542 crore in debt and Rs 123 crore in derivatives market. Some support also came amid reports that the RBI constituted a task force on the development of secondary market for corporate loans. Task Force will review the existing state of the market for loan sale/transfer in India as well as the international experience in loan trading.

On the global front, European markets were trading in green, as Spain's consumer price inflation eased to the lowest level in nearly one-and-a-half years in May and retail sales grew less-than-expected in April. The preliminary data from INE showed that the flash consumer price index rose 0.8 percent year-on-year in May, slower than a 1.5 percent climb in April. Asian markets ended mostly in red, after Malaysia's producer prices declined at a slower rate in April. The figures from the Department of Statistics showed that the producer prices index fell 1.4 percent year-over-year in April, following a 1.5 percent decline in March.

Back home, airlines stocks ended higher, even though Global airlines’ grouping, the International Air Transport Association (IATA) in its passenger traffic data indicated that India’s domestic air traffic recorded negative growth rate for the first time in over five years during the month of April 2019, largely due to the demise of Jet Airways. Further, stocks related to Fintech companies remained in focus with Niti Aayog CEO Amitabh Kant’s statement that Fintech market in India is likely to expand to $31 billion in 2020. He further said India is one of the fastest growing fintech markets globally.

Finally, the BSE Sensex rose 329.92 points or 0.84% to 39,831.97, while the CNX Nifty was up by 84.80 points or 0.71% to 11,945.90.

The BSE Sensex touched a high and a low of 39,911.92 and 39,500.56, respectively and there were 20 stocks advancing against 11 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.40%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were Power up by 1.58%, Utilities up by 1.46%, Telecom up by 1.21%, Energy up by 1.04% and TECK up by 0.96%, while Auto down by 0.61%, Metal down by 0.38%, Realty down by 0.26% and Consumer Disc down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 3.44%, Bharti Airtel up by 2.33%, Bajaj Finance up by 2.07%, TCS up by 1.91% and Yes Bank up by 1.88%. On the flip side, Sun Pharma down by 2.39%, Mahindra & Mahindra down by 1.61%, Indusind Bank down by 1.35%, Vedanta down by 1.12% and ONGC down by 1.11% were the top losers.

Meanwhile, Chief Economic Advisor (CEA) Krishnamurthy Subramanian has said that the issue of solvency is at the core of the problems afflicting the Non-Banking Finance Company (NBFC) lenders. He also said that NBFCs, which account for a fifth of the overall lending in the economy, have been facing headwinds since late August 2018.

Subramanian has pointed out that the crux of the problem is the asset liability mismatch, where lending institutions borrowed short for creating long term assets. He also said that in recent months, many NBFCs have been forced to exit non-core businesses and sell down future receivables, taking securitisation volumes to an all-time high in fiscal year 2018-19. He noted that a slew of measures have been taken by the government and the Reserve Bank to address the troubles, which started after the crisis at infra lender IL&FS. He added that rising interest rates also accentuated the asset liability mismatch issue.

Talking about Prime Minister Narendra Modi-led government's new term, CEA said the focus should be on what he described as the '4 Ls' of Land, Labour, Lend and Law in order to take the economy to greater heights. For a market economy, he said the legal framework forms the bedrock for all the transactions and has to be made stronger.

The CNX Nifty traded in a range of 11,968.55 and 11,859.40. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were NTPC up by 3.32%, Yes Bank up by 2.34%, Bajaj Finance up by 2.28%, BPCL up by 2.10% and Bharti Airtel up by 2.05%. On the flip side, Sun Pharma down by 2.57%, Eicher Motors down by 2.22%, Zee Entertainment down by 2.13%, Mahindra & Mahindra down by 2.03% and ONGC down by 1.34% were the top losers.

European markets were trading in green; UK’s FTSE 100 gained 31.12 points or 0.43% to 7,216.42, France’s CAC rose 20.54 points or 0.39% to 5,242.66 and Germany’s DAX was up by 69.69 points or 0.59% to 11,907.50.

Asian markets ended mostly in red on Thursday, tracking overnight decline in the US and European markets as investors fretted about trade war tensions, slowing global growth and uncertainty over Britain's departure from the European Union. Chinese shares ended lower after a senior Chinese diplomat said that provoking trade disputes is ‘naked economic terrorism’, ramping up the rhetoric against Washington. Meanwhile, markets in Indonesia were closed for public holidays.