Bourses hit lifetime closing high; Sensex settles above 40k-mark

Indian equities hit lifetime closing high on Monday, with Sensex and Nifty settling above their crucial psychological levels of 40,200 and 12,000, respectively, first time. The start of the day was firm, as Goods and Services Tax (GST) collections touched Rs 1 lakh crore in May 2019 as compared to Rs 94,016 crore in the year ago period. The total gross GST revenue collected in the month of May, 2019 was Rs 1,00,289 crore of which CGST  (Central GST) was Rs 17,811 crore, SGST (State GST) was Rs 24,462 crore, IGST (Integrated GST) was Rs 49,891 crore and Cess was Rs 8,125 crore. Adding more optimism, Indian manufacturing sector growth gained momentum in the month of May, on the back of faster expansions in output and order books. Aggregate manufacturing output increased at the quickest pace in three months. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - surged to 52.7 in May from 51.8 in April.

Markets continued their gaining momentum in second half of the session, amid reports that the government decided to extend PM-KISAN scheme to all 14.5 crore farmers, costing Rs 87,000 crore a year, and also announced over Rs 10,000 crore pension scheme for five crore farmers, thereby fulfilling the BJP's poll promise. Traders also remained positive with a report stating that overseas investors pumped in a net amount of Rs 9,031 crore into the Indian capital markets in May on expectations of more business-friendly measures following the BJP's landslide victory in the general elections. Markets participants overlooked reports that India’s gross domestic product (GDP) grew at its slowest pace in the January-March period of fiscal year 2018-19 (FY19) and hit a 5-year low of 5.8%. For the entire FY19, GDP growth stood at 6.8%, a five-year low after FY14, when the economy grew at 6.4%.

On the global front, European markets were trading in red, as Eurozone manufacturing activity remained entrenched inside contraction territory in May. The final survey data from IHS Markit showed that the factory Purchasing Managers' Index came in at 47.7 in May, in line with flash estimate, but down from 47.9 in the previous month. A score below 50 indicates contraction. The sector has shrunk over the last four successive months. Asian markets ended mixed, amid lingering worries about global growth due to ongoing trade dispute between the US and China.

Back home, stocks related to the pharmaceuticals industry ended higher after Fitch Ratings said that rising revenues in the domestic market have helped Indian pharma companies counterbalance the ongoing pricing pressure on generic drugs in the US in the financial year ended March 31. Further, banking sector stocks also surged, despite rating agency Fitch’s statement that the performance of India’s banking sector is likely to be below average for the next two years because it is struggling with poor asset quality and weak core capitalization.

Finally, the BSE Sensex gained 553.42 points or 1.39% to 40,267.62, while the CNX Nifty was up by 165.75 points or 1.39% to 12,088.55.

The BSE Sensex touched a high and a low of 40,308.90 and 39,711.02, respectively and there were 28 stocks advancing against 03 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.90%, while Small cap index was up by 0.48%.

The top gaining sectoral indices on the BSE were Auto up by 1.93%, Energy up by 1.83%, Consumer Disc up by 1.80%, Consumer Durables up by 1.78% and Metal up by 1.77%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Hero MotoCorp up by 6.01%, Bajaj Auto up by 3.92%, Indusind Bank up by 3.70%, Asian Paints up by 3.65% and Hindustan Unilever up by 2.90%. On the flip side, ICICI Bank down by 0.13%, NTPC down by 0.11% and ITC down by 0.04% were the few losers.

Meanwhile, the industry chamber, Federation of Indian Chambers of Commerce and Industry (FICCI) has welcomed the government’s move to extend Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme to all the farming households in India as a historic decision. It also claimed that no other central government has taken such a huge step for prosperity of farmers in the country.

FICCI also informed that the government has announced over Rs 10,000 crore pension scheme for five crore farmers, thereby fulfilling the BJP's poll promise. It believes that Indian agriculture is yet to realise its full potential and welcomes the government’s resolve to address challenges in the sector in a comprehensive manner. It added that direct income transfer is recognised as one of the most effective ways of targeting support to the farm sector.

The industry chamber supports a gradual shift from loosely targeted input subsidies to direct benefits transfer to enable farmers to make choices in expenditure based on local priorities and exigencies. He also said 'we urge the Prime Minister to follow up this excellent decision with further reform measures in a time bound manner to kick start a virtuous cycle of growth and value addition in the agriculture sector.

The CNX Nifty traded in a range of 12,103.05 and 11,920.10. There were 44 stocks advancing against 06 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 5.77%, Asian Paints up by 3.82%, Bajaj Auto up by 3.56%, Indusind Bank up by 3.28% and Indiabulls Housing Finance up by 3.24%. On the flip side, GAIL India down by 0.78%, Tech Mahindra down by 0.22%, ICICI Bank down by 0.20%, UltraTech Cement down by 0.11% and NTPC down by 0.08% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 27.00 points or 0.38% to 7,134.71, France’s CAC fell 9.38 points or 0.18% to 5,198.25 and Germany’s DAX was down by 14.02 points or 0.12% to 11,712.82.

Asian markets ended mixed on Monday as worries about rising trade tensions stoked fears of a global recession. In addition to the US-China trade war, US President Donald Trump's decision to impose tariffs on all Mexican imports weighed on investor sentiment. On June 02, China published a white paper that said the US should take responsibility for the setback in the US-China trade talks. The paper accused the US of being an untrustworthy negotiator and backtracking on its commitments in trade negotiations. Chinese shares ended modestly lower as worries about US-China trade tensions more than offset data that showed China's manufacturing activity continued to log moderate growth in May. The Caixin Purchasing Managers' Index came in at 50.2 in May, unchanged from the previous month. The reading was forecast to remain stable at neutral 50.0. Meanwhile the Indonesia market is closed all week in observance of Eid-ul-Fitr.