We had mentioned in Friday’s closing report that Nifty, Sensex may rally a bit. The major indices of the Indian stock markets rallied strongly after last week’s poor performance.
Healthy buying was observed in interest rate sensitive stocks like banks, auto and capital goods. In addition, investors' risk appetite was increased after a dismal US non-farm payrolls data reduced the potential for a June rate hike there. The US data for last month showed that the economy created 160,000 jobs, against 215,000 in March. A US rate hike could potentially lead to a pull-back of foreign funds from emerging economies like India. However, there was a catch in the strong rally. NSE turnover was only at 66.39 crore and hence the rally was on thin volumes.
Buyers started trickling in from the morning to various jewellery shops across the country on Monday to usher in good luck in their lives on the occasion of Akshaya Tritiya. Jewellers expect tepid surge in sales as the gold price has shot up in the last few weeks following global cues. "I am expecting only 10%-12% sales growth in value terms and not in volume terms as prices have shot up quite a bit in the last two months, and today it is hovering over Rs30,000 per 10 grams in the national capital," PC Jeweller managing director Balram Garg told IANS in Delhi. Akshaya Tritiya is a holy day for Hindus and the Jains and it is believed to bring good luck and success. It is considered to be an auspicious day to bring home gold.
Home prices have touched record high levels but a faster rise in disposable income has made house purchasing the most affordable ever, housing loan major HDFC has said in a report. According to latest data compiled by HDFC, the average property value of housing units have risen to an all-time high of over Rs50 lakh this year, while the annual income of an average homebuyer has also grown to record levels of over Rs12 lakh. A sharper increase in income levels compared to housing prices has brought down the affordability ratio to 4.1, making this the lowest in India's history and below the previous all-time low score of 4.3 posted in the year 2004. The ratio stood at 4.4 in 2015. A lower ratio indicates that house purchase has become more affordable now. The report said improved affordability has largely been driven by rising disposable income and affordable interest rates on home loans. The affordability ratio stood at a high of 22 in 1995, signifying that an average home buyer needed to pay 22 times of his/her annual income to purchase a house. HDFC shares closed at Rs1,204.00, up 3.12% on the BSE.
India's Insolvency and Bankruptcy Code is quite a positive reform for the financial sector, especially for state-run banks heavily burdened with stressed assets, as it will give creditors a legal path for recovering their dues in a time-bound way, Japanese financial services firm Nomura said in a report. "India currently ranks 136 in the World Bank's resolving insolvency ranking; it takes 4.3 years to resolve insolvency and the recovery rate (at 25.7 cents to a dollar) is very low. The Code will play a key role in improving the ease of doing business in India," said a Nomura research note. "Overall, the Code is a very positive financial sector reform, whose benefits will be visible in coming years. It should make lenders more confident in lending and borrowers more accountable," it said. In view of the multiple laws dealing with insolvency in India which lead to delays, the Code will consolidate the existing framework and create a new institutional structure, Nomura added. The report also said that if not in this session, the Code should be passed in the monsoon session of parliament that will follow a few months after the current Budget session ends on May 13. "Its full implementation is expected to take time as the entire institutional structure needs to be established," it said. The Bank Nifty surged 2.36% to close at 16,682.00.
Grasim Industries on Saturday reported a 37% rise in its consolidated net profit for the quarter ended March to Rs.696 crore from Rs.507 crore in the year ago period. Net sales and operating income for the company soared 13% to Rs.10,001 crore for the quarter under review from Rs.8,817 crore in the corresponding period. The Aditya Birla Group company reported EBITDA for the quarter at Rs.2,059 crore, up 24% from Rs.1,658 crore in the year ago period. "Firm's consolidated net profit rose 35 percent to Rs.2,359 crore in 2015-16, from Rs.1,744 crore," the company said in a BSE filing. The company posted a 14% increase in its cement sales volumes, viscose staple fiber (VSF) sales volumes were up by 10% and caustic soda sales volumes went up 95% year-on-year in the quarter ended March 2016. The company plans to increase its caustic capacity to 1,048 kilo tonnes per annum (ktpa) from 804 ktpa including 144 ktpa brownfield expansions at Vilayat and 100 ktpa debottlenecking at various plants, the company said. Grasim shares closed at Rs4,144.20, up 1.07% on the BSE.
The top gainers and top losers of the major indices are given in the table below:
The closing values of the major Asian indices are given in the table below: