Post Session: Quick Review

On Monday, markets staged recovery in the latter part of highly choppy session of trade, led by bargain hunting amidst the positive close of regional counterparts, which spilled some energy into the otherwise dull equity markets. The market turned volatile after the Central Bureau of Investigation (CBI) said in a fresh affidavit filed in the Supreme Court, on its probe into the coal blocks allocation, that changes were made by law minister, coal ministry, attorney general and officials of the Prime Minister's Office in draft status report on coal scam.  The twin issues of coal scam and allegations of bribery in connection with senior-level postings in the Railways, which paralyzed Parliament again, had substantial impact on investors’ mind.

Meanwhile, drag of the banking counter following online portal Cobrapost's sting operation which alleged 23 public and private sector banks involved in money laundering, weighed on the sentiment. According to the expose, banks like State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, Federal Bank, Development Credit Bank, Indian Overseas Bank, Yes Bank and Corporation Bank are involved in money laundering.

Additionally, murky macro-economic report, also added to the pessimism. A business survey showed Indian services growth easing dramatically during April with new orders coming in at a much slower pace, prompting firms to rein in hiring plans. The HSBC Services Purchasing Managers' Index, based on a survey of around 400 companies, fell to 50.7 last month, its lowest since October 2011 and the weakest reading in the current expansion cycle.

Nevertheless, the positive regional counterparts and intra-day recovery of banking counter on lower level buying shored up the sentiments at D-Street. Benchmark 30 share index Sensex, climbed close to 100 points to end above the psychological 19650 level, while Nifty ended the session above the crucial 5950 mark, with gains of over 25 points. Broader indices, outperformed frontline equity indices with fat margins and went home with profit of over a percent. Further, hopes of Food Security bills being passed by Parliament tomorrow suggested of government’s reform agenda being well in place, providing some fillip to the equity markets.

On the global front, Asian shares rose as investors cheered upbeat US jobs data, which added optimism about the US economic outlook. Sentiment improved after Friday’s data showed that US payrolls expanded by 165,000 last month, a faster-than-expected pace, although other US data including a survey of the services sector were less encouraging. Meanwhile, European shares gains stalled in holiday-affected trade, well before the date which could show that the retail sales declined.

Closer home, on BSE sectoral front, Metal, Information Technology and Consumer Durables stocks mainly anchored the markets. On the flip side, Fast Moving Consumer Goods (FMCG), Public Sector Undertaking (PSU) and Capital Goods counters, were the top laggards. Tyre stocks, viz, Apollo Tyres, Ceat, etc, too ended in fine fettle. While, IT stocks witnessed massive demand on an upbeat April job report. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1339: 1006, while 142 scrips remained unchanged. (Provisional)

The BSE Sensex gained 91.23 points or 0.47% to settle at 19,666.87.The index touched a high and a low of 19,694.29 and 19,554.31 respectively. Among the 30-share Sensex pack, 21 stocks gained while rest of them declined (Provisional)

The BSE Mid cap and Small cap indices ended higher by 1.15% and 0.98% respectively. (Provisional)

On the BSE Sectoral front, Metal up by 1.96%, IT up by 1.95%, Consumer Durables up by 1.59%, Teck up by 1.58% and Auto up by 1.40% were the top gainers, while FMCG down by 0.84% and PSU down by 0.18%, were the only losers in the space. (Provisional)

The top gainers on the Sensex were Tata Steel up by 3.58%, Hindalco Industries up by 3.52%, TCS up by 2.25%, RIL up by 2.53% and Hero MotoCorp up by 2.32%, while,  ONGC down by 1.67%, NTPC down by 1.48%, ITC down by 1.35%, HDFC Bank down by 0.91% and Coal India down by 0.79% were the top losers in the index. (Provisional)

Meanwhile, growth in services sector, which make up nearly 60% of country’ economics output, eased dramatically during April as new orders came in at a much slower pace, prompting firms to rein in hiring plans. As per the HSBC services Purchasing Managers’ Index (PMI), based on a survey of around 400 companies, fell to its slowest pace in one and half years to 50.7 in April from 51.4 in March.  

The services sector growth which rose an 18-month high in January, fell for its third straight month in April and took the index dangerously close to the 50 mark that separates growth from contraction.  Although the business placed in firm rose during April, service providers mentioned extreme weather and challenging market conditions for the slower pace of growth.

Service providers also stated that delayed payments from clients had resulted in increased levels of unfinished business.  Moreover, the growth in payroll numbers eased in service sector and the rate of job creation was modest and the slowest in the current 14-month sequence of hiring.

Similarly, the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, also came down to 50.5, from 51.4 in March, indicating that activity increased marginally and at the slowest pace since October 2011. 

Further, April data signaled broadly steady inflation reading even as input prices continuing the trend that started in April 2009, rose during April. Subsequently, services companies increased their selling prices. However, the rate of increase in average selling prices were slower at service providers as the overall rate of charge inflation moderate and the slowest in 30 months.

Furthermore, firms operating in the Indian service sector remained optimistic towards output growth in the short-term. Service sector firms linked positive sentiment to expectations of stronger demand, increased marketing and maintained brand reputation. The degree of positive sentiment was little changed from March and remained strong.

India VIX, a gauge for markets short term expectation of volatility gained 1.86% at 15.84 from its previous close of 15.55 on Friday. (Provisional)

The CNX Nifty gained 31.10 points or 0.52% to settle at 5,975.10. The index touched high and low of 5,976.50 and 5,928.45 respectively. 31 stocks advanced against 19 declining and one stock remains unchanged on the index. (Provisional)

The top gainers on the Nifty were Hindalco Industries up by 3.72%, Tata Steel up by 3.63%, Asian Paints up by 3.30%, TCS up by 3.28% and NMDC was up by 2.77%. On the other hand, Kotak Bank down by 1.49%, ONGC down by 1.44%, ITC down by 1.39%, Ambuja Cements down by 1.35% and ACC down by 1.21% were the top losers. (Provisional)

Most of the European markets were trading in red with, France’s CAC 40 down by 0.28% and Germany’s DAX down by 0.07% while the United Kingdom’s FTSE 100 remained close for trade on account of holiday.

Most Asian stock markets ended notably higher on Monday as investors were busy picking up stocks, following a positive lead from Wall Street where the major averages hit new highs on Friday following upbeat jobs data. Chinese markets went home with smart gains with constant buying on the first trading day of the weak. Meanwhile, South Korean shares were trading in green after refiners shares rebounded from their recent sharp declines.

Japanese market remained shut for the trade today on account of Children’s Day.