The overbought rally continues with expected reforms
Indian market on Friday opened well in the positive and started trending higher. At around 1.00pm, the indices traded close to the intra-day low, but managed to make a quick recovery and hit the day’s high at the end of the session. The current uptrend developed strength from reports that the finance ministry is working on a proposal to cut the fiscal deficit to 3.8% to 3.9% of GDP for the year ending 31 March 2015.
The BSE 30-share Sensex opened at 24,535 while the NSE 50-share Nifty opened at 7,307. Sensex moved in the range of 24,471 and 24,746 and closed at 24,693 (up 319 points or 1.31%) while Nifty moved between 7,294 and 7,381 and closed 7,367 (up 91 points or 1.25%). The gain on the NSE was on a lower volume of 177.46 crore shares. India VIX fell 0.73% to close at 17.7050.
Except for FMCG (0.32%) and Media (0.31%) all the other indices on the NSE closed in the green. The top five gainers were PSU Bank (8.12%), Nifty Midcap 50 (3.28%), Infra (3.06%), PSE (2.89%) and Energy (2.80%).
Of the 50 stocks on the Nifty, 35 ended in the green. The top five gainers were State Bank of India (10.28%), Tata Power (6.99%), Jindal Steel (6.39%), IDFC (5.70%) and Maruti (5.53%). The top five losers were Kotak Bank (1.58%), HDFC Bank (1.57%), Hindalco (1.48%), ITC (1.39%) and Infosys (1.38%).
Of the 1,598 companies on the NSE, 1,113 companies closed in the green, 444 companies closed in the red while 41 companies closed flat.
State Bank of India posted weak quarterly results today. Yet, it came as the top gainer (9.69%) in the Sensex 30 pack on improvement in the lender's asset quality.
HDFC Bank had approached the government to raise the cap on foreign institutional investment in the bank to 67.55% from 49% but, according to reports, the government has turned down the proposal. This implies that foreign investors will not be able to invest further in HDFC Bank. The bank was among the top two losers (fell 1.63%) in the Sensex 30 stock.
Ashok Leyland posted superb growth in the quarterly net profit inspite of registering a fall in the net sales. The annual result was weak. The stock was the top gainer (13.67%) in the ‘A’ group on the BSE.
A day after RBI eased the gold import rules when the stocks of the line rose. Today one such player, Gitanjali Gems, was the top loser (4.69%) in the ‘A’ group on the BSE.
US indices closed in the positive on Thursday. New applications for unemployment benefits rose sharply in mid-May, reversing a big drop earlier in the month that put initial claims at a seven-year low. Sales of existing homes rose 1.3% in April to a seasonally adjusted annual rate of 4.65 million, the National Association of Realtors reported Thursday.
The Markit Economics preliminary index of US manufacturing increased to 56.2 in May from 55.4 a month earlier as output accelerated, the London-based group said on Thursday.
Except for KLSE Composite (0.31%) all the other Asian indices closed in the positive. Nikkei 225 (0.87%) was the top gainer.
European indices were showing mixed performance while US Futures were trading marginally higher.