Sensex, Nifty continue to trade near all time high points

Bulls held a tight grip over the Dalal Street in early afternoon deals, with both Sensex and Nifty trading near their all time high points, after several exit polls pointed to a third term and sizable mandate for Prime Minister Narendra Modi. Positive global cues on the back of encouraging inflation data from the U.S. and robust Indian GDP data for the fourth quarter of FY24 also boosted investor sentiment. Sentiments remained optimistic as Prime Minister Narendra Modi said that the Q4 GDP growth data for 2023-24 shows robust momentum in Indian economy which is poised to further accelerate.

Traders overlooked reports that India's manufacturing sector growth eased further in the month of May, signaling a slower but still substantial improvement in the health of the sector. The headline figure was nearly four points higher than its long-run average. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased to 57.5 in May as against 58.8 in April. It was 59.1 in March.

On the global front, Asian markets were trading mostly in green, as the manufacturing sector in China continued to expand in May, and at a faster pace, with a manufacturing PMI score of 51.7. That's up from 51.4 in April, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Manufacturing production rose at the fastest pace since June 2022, with firms in the consumer segment reporting especially sharp output growth in May.

The BSE Sensex is currently trading at 76246.32, up by 2285.01 points or 3.09% after trading in a range of 75678.43 and 76738.89. There were 29 stocks advancing against 1 stock declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped 3.42%, while Small cap index was up by 2.01%.

The top gaining sectoral indices on the BSE were Utilities up by 7.75%, Power up by 7.61%, PSU up by 7.11%, Oil & Gas up by 5.83% and Capital Goods up by 5.22%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Power Grid up by 10.28%, NTPC up by 8.55%, SBI up by 8.27%, Larsen & Toubro up by 6.06% and Axis Bank up by 5.90%. On the flip side, HCL Tech. down by 0.05% was the only loser.

Meanwhile, India's manufacturing sector growth eased further in the month of May, signaling a slower but still substantial improvement in the health of the sector. The headline figure was nearly four points higher than its long-run average. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased to 57.5 in May as against 58.8 in April. It was 59.1 in March.

Amid marketing efforts, demand strength and favourable economic conditions, new orders rose at a substantial pace however the slowest in three months. Growth was stymied by competition and election-related disruptions. Besides, new export orders rose at a faster pace in May. The upturn was the strongest in over 13 years as firms noted gains from customers across several countries in Africa, Asia, the Americas, Europe and the Middle East.

The survey report further noted that Indian manufacturers expressed the highest level of positive sentiment towards growth prospects in nearly nine-and-a-half years. Confidence was fuelled by advertising and innovation, alongside expectations that economic and demand conditions will remain favourable. Ongoing strong sales performances combined with upbeat growth forecasts fuelled job creation in May, rising to one of the greatest extents seen since data collection started in March 2005.

On the price front, Jobs growth, parallel to rising material and freight costs, underpinned a quicker increase in input costs at goods producers. The overall rate of inflation remained below its long-run average, but picked up to its joint-highest since August 2022. In response to the latest increase in operating expenses companies raised their own selling prices in May. The rate of charge inflation quickened to an eight-month high.

The CNX Nifty is currently trading at 23225.75, up by 695.05 points or 3.08% after trading in a range of 23062.30 and 23338.70. There were 47 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 11.02%, Power Grid up by 10.18%, NTPC up by 8.48%, SBI up by 8.22% and Shriram Finance up by 7.46%. On the flip side, Eicher Motors down by 1.11%, LTIMindtree down by 0.45% and HCL Tech. down by 0.10% were the few losers.

Asian markets were trading mostly in green; Hang Seng advanced 352.17 points or 1.95% to 18,431.78,  Jakarta Composite gained 101.35 points or 1.43% to 7,072.09, Straits Times rose 10.45 points or 0.31% to 3,347.04, KOSPI increased 45.91 points or 1.71% to 2,682.43, Nikkei 225 surged 435.13 points or 1.12% to 38,923.03 and Taiwan Weighted added 362.54 points or 1.68% to 21,536.76, while Shanghai Composite weakened 23.02 points or 0.75% to 3,063.79.