Bourses extend gains in late afternoon session

Indian equity markets extended their gains and traded at day’s high levels in late afternoon session on hopes of NDA likely to lead the government. The broader indices, the BSE Mid cap index and Small cap index traded with hefty gains. Traders overlooked report that India’s services sector activity growth eased further during the month of May but remained comfortably above the neutral mark of 50.0, highlighting a sharp upturn in output. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index fell to 60.2 in May from 60.8 in April. It was 61.2 in March. On the global front, Asian markets were trading mostly in red even as a private survey showed China's services sector in May expanded at its fastest pace since July last year. European markets were trading higher mirroring global sentiment as a soft U.S. labour market data firmed bets of a rate cut from the Federal Reserve, ahead of the European Central Bank's key rate verdict later this week.

The BSE Sensex is currently trading at 74173.99, up by 2094.94 points or 2.91% after trading in a range of 71879.44 and 74204.67. There were 29 stocks advancing against 1 stock declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 4.35%, while Small cap index was up by 2.81%.

The top gaining sectoral indices on the BSE were Telecom up by 6.11%, FMCG up by 4.30%, Auto up by 4.23%, Metal up by 4.19% and Consumer discretionary was up by 4.09%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Indusind Bank up by 7.28%, Mahindra & Mahindra up by 6.24%, Tata Steel up by 4.94%, Bajaj Finance up by 4.83% and Axis Bank up by 4.34%. On the flip side, Larsen & Toubro down by 0.27% was the only loser.

Meanwhile, Mukesh Aghi, president and CEO of US-India Strategic Partnership Forum (USISPF) has said that the American corporate sector expects the economic reforms to continue in the third term of Prime Minister Narendra Modi despite his return to office with a slightly lower majority. He noted that Modi is poised to form the government for a third consecutive term with the BJP-led National Democratic Alliance (NDA) getting a majority in the Lok Sabha, notwithstanding crushing losses in three Hindi heartland states after a bitterly fought election that was projected as a referendum on his popularity. The Election Commission of India has declared results for 542 of the 543 Lok Sabha constituencies, with the BJP winning 240 seats and the Congress 99. 

He said ‘I think the mood is that the prime minister is going to come back with a slightly lower majority but, with a coalition, and the agenda of reform continues, the US-India relationship continues positively, the focus on Quad, I2U2, IMAC will continue.’ He also said he doesn't think that the impact of elections will derail the momentum of corporate investment into India.

He further said ‘in fact, I would see the momentum picking up between the two countries on the issue of Quad because I think Quad so far has been on joint patrols and defence alignment. Now I see the Quad moving more and more into economic security between the four countries, looking at partnership in the critical technology areas itself. I don't think anything will slow down as far as the current, after the current election’. The Quadrilateral Security Dialogue, commonly known as the Quad, is a strategic security dialogue between Australia, India, Japan and the US that is maintained by talks between member countries. He said the elections and the results also enhance Modi's position, given many people were talking about authoritarianism in India.

The CNX Nifty is currently trading at 22538.05, up by 653.55 points or 2.99% after trading in a range of 21791.95 and 22560.65. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 7.46%, Mahindra & Mahindra up by 6.40%, Shriram Finance up by 5.68%, Hero MotoCorp up by 5.52% and Adani Ports up by 5.33%. On the flip side, BPCL down by 0.86% and Larsen & Toubro down by 0.32% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 347.29 points or 0.9% to 38,490.17, Jakarta Composite plunged 153.76 points or 2.21% to 6,945.55, Shanghai Composite weakened 25.8 points or 0.84% to 3,065.40, Hang Seng declined 19.15 points or 0.1% to 18,424.96 and Straits Times was down by 1.97 points or 0.06% to 3,336.97. On the flip side, KOSPI increased 27.40 points or 1.02% to 2,689.50 and Taiwan Weighted was up by 128.26 points or 0.6% to 21,484.88.

European markets were trading higher; UK’s FTSE 100 increased 12.84 points or 0.16% to 8,244.88, France’s CAC rose 32.86 points or 0.41% to 7,970.76 and Germany’s DAX was up by 104.91 points or 0.57% to 18,510.55.