Late spurt bolsters benchmarks to snap May F&O series on a high note

The May series Futures and Options contract settlement turned out to be an encouraging event for the Indian markets as bulls showed strong buying interests in majority of the blue chip stocks. The resilient markets vivaciously rallied over 808 (Sensex) and 207 (Nifty) points during the period. Though, the domestic bourses traded listless for most part of the trade as investors remained on sidelines ahead of the government’s announcement of the FY13 GDP numbers on May 31. Some concern related to economy also dampened the sentiments as the Organization for Economic Cooperation and Development (OECD) said that the combined gross domestic product of the OECD’s 34 members will grow by 1.2% this year, rather than the 1.4% rate forecast in November. For India it slashed its growth forecast to 5.3% in 2013 as against its earlier forecast of 5.9%. However, hefty short covering in the dying hours ahead of the series expiry supported the benchmarks to settle above their psychological 20,200 (Sensex) and 6,100 (Nifty) bastions.

Some support to the domestic markets also came in from recovery in European counters as CAC, DAX and FTSE got their green trajectory back after a negative start. However, all the Asian equity indices shut shop in red with Japanese Nikkei tumbling over five percent as dollar slipped against the yen, on growing concern about the US Federal Reserve’s potential plans to taper its massive global asset buys, a key stimulator of markets worldwide. 

Back home, some strength to the markets came from buying in power sector stocks as a group of ministers (GoM) has approved setting up of coal regulator that could potentially benefit the power companies that have been strained by the scarcity and poor quality of coal supplied to them. Rally in FMCG stocks too supported the sentiments on report that monsoon rains could hit Kerala by as early as this Sunday, i.e., June 02. The India Meteorological Department (IMD) had earlier predicted the date of June 03 for the monsoon onset with a model error of plus or minus four days. Additionally, public sector oil marketing companies viz. BPCL, HPCL and IOC edged higher on the buzz of price hike due to sharp depreciation in rupee. 

Stellar Q4 numbers from M&M, IOC and Tata motors too aided the sentiments. Mahindra & Mahindra posted a 1.7% rise in net profit for the three months ended March, helped by higher sales. IOC’s Net profit in the March quarter rose 14.54% to Rs 14,512.81 crore from Rs 12,670.43 crore in the same period last year, while Tata motors’ consolidated net profit in the January-March quarter declined 37 percent year-on-year to Rs 3,945 crore, but beat street expectation of Rs 2,990 crore net profit.

The NSE’s 50-share broadly followed index Nifty rose by about twenty points to end above the psychological 6,100 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over sixty points to finish above the psychological 20,200 mark. Moreover, broader markets struggled to get some traction during the session and ended the trade mixed.

The overall volumes stood above Rs 3.34 lakh crore, which remained on the higher side as compared to that on Wednesday. The market breadth remained in favor of declines as there were 1,062 shares on the gaining side against 1,327 shares on the losing side while 133 shares remain unchanged.

Finally, the BSE Sensex gained 67.76 points or 0.34% to settle at 20,215.40, while the CNX Nifty rose by 19.75 points or 0.32% to end at 6,124.05.

The BSE Sensex touched a high and a low of 20,254.03 and 20,066.14, respectively. The BSE Mid cap index up by 0.04% and Small cap index was down by 0.35%.

The top gainers on the Sensex were, Mahindra & Mahindra up by 4.61%, Tata Motors up by 4.31%, ITC up by 3.51%, HDFC up by 1.80% and NTPC up by 1.62%, while Cipla down by 4.62%, Tata Steel down 3.90%, Hindalco down 3.18%, ICICI Bank down 2.71% and Hero MotoCorp down by 1.96% were the top losers on the index. 

The top gainers on the BSE Sectoral space were Auto up 2.29%, FMCG up 1.88%, Power up 0.71% and PSU up 0.12%, while Realty down 2.39%, Metal down 1.11%, Oil & Gas down 0.74%, Capital Goods down 0.56% and Health Care down 0.40% were the top losers on the sectoral space.

Meanwhile, the government will provide subsidy to LPG consumers in 18 districts across the country from June 1, 2013. The consumers in the select districts will get the subsidy amount transferred into their bank accounts linked with Aadhaar number. Earlier, the scheme was to be rolled out in 20 districts initially but the launch in Mysore in Karnataka and Mandi in Himachal Pradesh has been put off by a month due to assembly and Parliamentary by polls.

From June 1, consumers in 18 districts will get Rs 435 in their bank accounts every time, when they book a LPG refill. The government intends to extend the scheme to rest of the country but want to see the results of the roll-out in these districts.  Meanwhile, the move will help the government to cut its subsidy outgo by around Rs 8,000-10,000 crore annually by eliminating diversions.

Oil Minister M Veerappa Moily said, although around 90 per cent of the LPG consuming population in these districts has Aadhaar number, the government will give a three-month grace period to them to procure the UID number and seed it with their bank accounts where cash subsidy has to be transferred. From September 1, only consumers having Aadhaar and banks accounts linked to them will get cash subsidy and the rest will have to buy LPG at market price, he added. There are around 14 crore LPG consumers in India and once the DBT for LPG is implemented, the government subsidy will reach the intended beneficiary only.   

The CNX Nifty touched a high and a low of 6,133.75 and 6,072.15 respectively. 

The top gainers on the Nifty were M&M up by 4.93%, Tata Motors up 3.69%, ITC up 3.60%, Asian Paints up 2.55% and Kotak Bank up by 2.41%.

On the flip side, the top losers of the index were, Cipla down 4.72%, Tata Steel down 3.80%, JP Associates down 3.47%, Hindalco down 3.36% and ICICI Bank down by 3.04%.

The European markets were trading in green, France’s CAC 40 up by 1.03%, Germany’s DAX up by 0.63% and the United Kingdom’s FTSE 100 up by 0.22%.

Asian markets closed the shutter on a weak note as concerns about the US Federal Reserve scaling back its huge stimulus programme in the next few months rattled investors. Japan’s Nikkei went home with red mark as yen strengthened against dollar. Stocks in China closed lower ahead of official manufacturing data out this weekend. South Korea's Kospi went home with red mark after swinging between gains and losses, while Hong Kong's Hang Seng index also extended losses to close at a one-month low.