With better-than-expected factory output and contained consumer and wholesale price indices buoying sentiments, a barometer index of the Indian equities markets gained by more than 160 points during trading on Monday.The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE) gained more than 160 points or 0.60 percent in the day's trade.The wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed the day's trade with marginal gains. It ended the day's trade 31 points or 0.39 percent up at 8,013.90 points.The Sensex which opened at 26,498.67 points, closed the day's trade at 26,586.55 points, up 161.25 points or 0.61 percent from the previous day's close at 26,425.30 points.The Sensex touched a high of 26,728.60 points and a low of 26,307.84 points in the intra-day trade.Analysts tracking the day's trade said the markets opened on a positive note supported by strong macro-economic data and optimism about the monsoon, despite speculation around Greece's loan default.
"Better-than-expected retail inflation and fair development to monsoon till-date is providing support. But still India is in a risk-off mode, led by dollar liquidity which is increase the global bond yields," said Vinod Nair, head for fundamental research with Geojit BNP Paribas Financial Services.Nair pointed out that the global markets are concerned over the Greek debt talks, and the speculations on how soon the US Federal Reserve might raise interest rates. "As soon a consensus is reached over the Greek issue, it will trigger the trend accordingly," Nair added.
On Monday, the trade was impacted by the release of India's annual wholesale inflation data, which continued to be in the negative in May. However, it moved up slightly to (-)2.36 percent from (-)2.65 percent in April.Apart from an expected rate of Wholesale Price Index (WPI), the better-than-expected consumer price index (CPI) and Index of Industrial Production (IIP) figures which were released after the close of equities markets on Friday had an impact on Monday's trade.The April IIP showed a 4.1 percent growth, against a 2.1 percent rise for the previous month. The retail inflation inched-up to 5.01 percent in May from 4.8 percent in April.However, the markets are anxious about the US Fed's monetary policy meeting on June 17 which will be closely monitored for any signs of a rise in interest rates.
With higher interest rates in the US, the FPIs (Foreign Portfolio Investors) are expected to be led away from the emerging markets such as India.Gaurav Jain, director with Hem Securities said that: "The strengthening of the rupee also improved the sentiment and hopes of the investors." Predicting future triggers for the market, Dipen Shah, head of private client group research with Kotak Securities said that over the medium term, markets will react to government action on fiscal initiatives. During the intra-day trade on Monday, healthy buying took place in the automobile, healthcare, oil and gas, capital goods and technology, entertainment and media (TECK) stocks.
However, consumer durables, banking and metal scrip came under selling pressure.The S&P BSE automobile index augmented by 197.86 points, followed by the healthcare index which gained by 147.72 points, oil and gas index rose by 81.73 points, capital goods index increased by 75.92 points and TECK index was up 31.60 points.The S&P BSE consumer durables index receded by 82.54 points, banking index fell by 80.58 points and metal index was down by 56.72 points.
The major Sensex gainers during Monday's trade were: Sun Pharma, up 2.95 percent at Rs.837.75; Bajaj Auto, up 2.13 points at Rs.2,334.30; Mahindra and Mahindra, up 2.08 percent at Rs.1,220.65; HDFC, up 2.07 percent at Rs.1,214.70; and Reliance Industries, up 1.33 percent at Rs.901.
The major Sensex losers were: Hindalco Inds, down 1.97 percent at Rs.114.40; Vedanta, down 1.49 percent at Rs.181.25; State Bank of India (SBI), down 1.34 percent at Rs.250.55; Tata Power, down 0.69 percent at Rs.72.10; and NTPC, down 0.55 percent at Rs.135.80.Among the Asian markets, Japan's Nikkei closed lower by 0.09 percent, China's Shanghai Composite Index declined by 2.00 percent, Hong Kong's Hang Seng was down by 1.53 percent.In Europe, the London FTSE 100 was lower by 1.01 percent, the French CAC 40 declined by 1.48 percent and the Germany DAX Index was down by 1.75 percent at the closing bell here.