Extending previous sessions’ strength, local equity market ended with gains of over 1.75% which lifted both Sensex and Nifty above crucial 28,000 and 8,500 levels respectively on continued buying activities by both funds and retail investors. The calmness in forex market bolstered sentiment. On the currency front, Indian rupee, after hitting fresh two-year low of $65.10 in previous trading session, appreciated and stabilized around those levels on continuous buying by state run banks. Besides, positive macro-economic data also cheered D-Street. On the macro-front, hopes for an out of turn rate cut by RBI were raised as the annual rate of inflation, based on monthly WPI, extended its deflationary trend for ninth successive month and eased way below expectation to -4.05% for July as compared to -2.4% for June and 5.41% during the corresponding month of the previous year. This comes after ease in CPI (Consumer-Price-Index) inflation and strength in IIP (Index of Industrial Production) data earlier this week.
Commenting on the market movement, Amar Ambani, Head of Research, IIFL, said, “The smart gains on Friday pared most of the week’s losses and have come as a pleasant surprise even though the undertone warrants some amount of caution. Interest rate sensitive stocks like realty, banking and auto led the charge as sentiment got a fillip from WPI recorded the ninth straight decline; its lowest in at least a decade. The market hopes of a rate cut have been raised with the recent set of macro-economic data. With the Parliament session coming to a close and most results out of the way, fund flows, global markets, currency movement and monsoon progress will dominate the proceedings in the week ahead.”
On the global front, Asian shares mostly fell on Friday and probably registered one of the steepest weekly losses in the wake of China's surprise currency devaluation on Tuesday. On Friday, Beijing set the yuan’s daily rate against the U.S. dollar roughly unchanged from the previous day, a signal that Beijing is sticking to its pledge to let the market play a bigger role in determining the currency’s trading level. Meanwhile, European stocks steadied on Friday to consolidate a rebound in the previous session, although they remained set for their biggest weekly loss in six weeks following moves by China to let its currency weaken.
Closer home, with buying being broad-based in nature, all the sectoral indices witnessed gains; nevertheless major gainers were the stocks from Realty, Banking and Auto counters. Banking shares were the torch bearers of today's rally on hopes of the rate cut. The market, which had started the day on a positive note on bargain hunting in select stocks, received a fresh booster in the second half of the trading session after government data reported that inflation based on the wholesale-price-index fell at a faster-than-expected annual rate of 4.05 percent in the month of July 2015, its ninth straight decline and the lowest in at least a decade.
Expectedly, the rate sensitives led the rally; even as buying was seen spread across the sectors. The BSE benchmark index, the Sensex, had opened with a positive gap of 118 points at 27,668. The index touched a low of 27,643, before resuming its uptrend for the day. Frenzied buying in the second half of the trading session saw the BSE index soar to a high of 28,101. The Sensex finally ended with a solid gain of 518 points at 28,067.
The NSE Nifty opened with positive gap of nearly 50 points at 8,402, and rallied past the 8,500-level to a high of 8,530 towards the end of the trading session. The Nifty eventually settled with a huge gain of 163 points at 8,519.
The India VIX (Volatility) index slumped nearly 6 percent to 16.02.
Elsewhere in Asia, the markets ended on a subdued note. China's Shanghai Composite index was up 0.3 percent at 3,965. The Nikkei slipped 0.4 percent to 20,519, and the Hang Seng was down 0.1 percent at 23,991.
As of 1530 hrs, the European markets too were trading on a flat note. The FTSE 100, DAX and CAC 40 were more of less unmoved at 6,571, 11,017 and 4,984, respectively.
The Indian Rupee hit a fresh two-year low at 65.31 versus the US dollar, but recouped losses and was quoted flat around 65.1075 compared to the previous close.
The broader market mirrored gains in the benchmark indices - the CNX Nifty Junior, Midcap and the Smallcap indices rallied over 2 percent each to 21,250, 13,918 and 5,657, respectively.
The breadth too was extremely bullish, with more than two advancing shares for every single declining stock on the NSE. Out of 1,723 stocks traded on the NSE, 1,069 advanced and 424 declined today.
Among sectors - the CNX Realty index skyrocketed by 8.5 percent to 183.40. The PSU Bank index soared 4.5 percent to 3,483, and the Bank Nifty rallied 3 percent to 18,728. The Media index surged 3.3 percent to 2,499. The Auto and Infra indices jumped around 2.5 percent each to 8,646 and 3,247, respectively. The Energy and Pharma indices gained around 1.8 percent each at 8,407 and 13,133, respectively. The Metal index advanced 1.4 percent to 1,920, and the IT index added 0.6 percent to 12,032.
Banking shares rallied on rate cut hopes. Punjab National Bank zoomed 9 percent to Rs. 167. Yes Bank and Bank of Baroda surged nearly 4.5 percent each to Rs. 796 and Rs. 184, respectively. Kotak Bank gained 4 percent at Rs. 718. ICICI Bank, SBI and IndusInd Bank advanced over 3.5 percent each to Rs. 303, Rs. 269 and Rs. 958, respectively. HDFC Bank was up 2.2 percent at Rs. 1,101, and Axis Bank added 0.7 percent to Rs. 572.
Among the non-Nifty banking shares - Bank of India soared over 8 percent to Rs. 171, and Oriental Bank of Commerce (OBC) jumped 7.4 percent to Rs. 171. Canara Bank, Allahabad Bank, Syndicate Bank, Indian Overseas Bank, Union Bank of India, Andhra Bank, IDBI and Federal Bank rallied 4-6 percent each.
Zee Entertainment was the other major gainer in the Nifty-50. The stock rallied 4.8 percent to Rs. 420.
Index heavyweight - Reliance Industries surged over 3.5 percent to Rs. 966. Private housing lending major - HDFC too was up nearly 3.5 percent at Rs. 1,299.
Vedanta too bounced back on account of bargain hunting, and ended with a gain of 3.6 percent at Rs. 107.
Bharti Airtel, Grasim, Bajaj Auto and Idea Cellular advanced around 3 percent each to Rs. 397, Rs. 3,713, Rs. 2,560 and Rs. 162, respectively.
Asian Paints and Mahindra & Mahindra flared up 2.7 percent each to Rs. 898 and Rs. 1,375, respectively.
Hindalco, Sun Pharma and Larsen & Toubro gained around 2.5 percent each at Rs. 93, Rs. 900 and Rs. 1,802, respectively.
Hero MotoCorp, TCS, Maruti Suzuki, Cipla and Lupin too were up over 2 percent each. In all, 26 out of the 50 Nifty stocks ended with gains in excess of 2 percent each.
Tata Steel, Tata Motors, Bosch, Gail India, Ambuja Cements and NTPC were the other major gainers - up around 1.5 percent each.
On the flip side, only three out of the 50 Nifty stocks ended in the negative zone. Dr.Reddy's and BPCL slipped over a percent each to Rs. 4,241 and Rs. 875, respectively. Infosys was down 0.8 percent at Rs. 1,148 on account of profit-taking.
Among others - Shares of real-estate companies logged sharp gains on hopes of reaping benefits in event of a surprise rate cut. Market leader - DLF zoomed over 18 percent to Rs. 135. HDIL soared nearly 11 percent to Rs. 84.25. Oberoi Realty, Indiabulls Real-estate, Delta Corp and Unitech surged 5-6 percent each. Prestige Estates, Godrej Properties and Sobha gained around 3 percent each.
Kaya, the skin care maker from the Marico group, was listed today on the stock exchanges after the scheme of arrangement with Marico Kaya Enterprises. The stock touched a high of Rs. 1,540, and a low of Rs. 1,463 and finally settled at the day's low at Rs. 1,463. Trading in Marico Kaya was suspended on 25 May.
Shares of Glenmark Pharma and Indiabulls Housing Finance surged 6.9 percent and 5 percent each to Rs. 1,131 and Rs. 795, respectively on been included in select MSCI indices. According to reports, the former will be added to the MSCI Emerging Markets Index and the latter will be included in the MSCI ACWI Value Index.
Rajesh Exports soared to a high of Rs. 597 after the company's Q1 net doubled to Rs. 237 crore in Q1FY16, as against Rs. 118 crore in Q1FY15. The stock, however, pared gains and ended flat at Rs. 571.
National Buildings Construction Corporation (NBCC) rallied 3.2 percent to Rs. 1,026. The company reported 31.5 percent jump in Q1 consolidated Q1 net at Rs. 44.08 crore when compared with Rs. 33.52 crore in the corresponding quarter a year ago.
Ahluwalia Contracts jumped 4.4 percent to Rs. 235 on the back of 11.3 percent growth in Q1 net profit, which stood at Rs. 18.80 crore, as against Rs. 16.89 crore in a year ago period.
Natco Pharma gained a percent at Rs. 2,306 after the company informed BSE that the Foreign Investment Promotion Board (FIPB) has approved both of its Foreign Direct Investment (FDI) related proposals.
Claris LifeSciences soared 4.5 percent to Rs. 231 after the company's consolidated Q1FY16 net profit jumped by 31 percent to Rs. 20.29 crore from Rs. 15.48 ore in Q1FY15.
Hathway Cable & Datacom spurted to a high of Rs. 49.35, but ended 0.5 percent lower at Rs. 46.75, on news that the company received FIPB approval to increase foreign investment limit in the company from the existing 49 percent to 74 percent under the automatic route.
Pennar Industries surged over 8 percent to Rs. 55.65 on the BSE on the back of positive news flow. According to a release issued to the BSE, the company's subsidiary Pennar Enviro has received orders worth Rs. 180 crore.
Jyoti Structures hit the 20 percent lower circuit at Rs. 17.70 on the back of weak earnings. The company has reported net loss of Rs. 151.97 crore for the first quarter ended June 2015, much higher than net loss of Rs. 15.97 crore in the same period of last fiscal.
Shree Renuka Sugars slipped 2.5 percent to Rs. 8.72 after the company's Q1 net loss widened to Rs. 227.2 crore in Q1FY16, as against net loss of Rs. 80.6 crore in a year ago period.
ICRA dropped 2.6 percent to Rs. 4,099 on the back of poor Q1 earnings. The company reported 24.3 percent drop in consolidated net profit at Rs. 16.49 crore in Q1 June 2015 as against net profit of Rs. 21.80 crore in Q1 June 2014.
A total of 26 stocks hit a fresh 52-week high in trades today, while 41 stocks touched a fresh 52-week low on the NSE.
Abbott India, Adani Ports and Special Economic Zone, Adani Transmission, Bajaj Holdings & Investment, CEAT, Dr.Reddy's Laboratories, Excel Realty, Glenmark Pharmaceuticals, Infosys, Jindal Poly Films, Lambodhara Textiles, Maruti Suzuki, PNC Infratech, Sandesh, Shyam Century Ferrous and Torrent Pharmaceuticals were some of the prominent stocks to log a fresh 52-week high.
Aban Offshore, Alphageo India, Cairn India, GAIL India, Graphite India, Hindustan Construction Company, HEG, Hinduja Global Solutions, Hindalco, IL&FS Transportation Networks, Jindal Steel & Power, Jindal Drilling, Just Dial, Jyoti Structures, Kaveri Seed Company, Madras Fertilizers, Maharashtra Seamless, Mangalam Cement, Metalyst Forgings, Muthoot Finance, National Aluminium Company, Nirvikara Paper Mills, NMDC, Prakash Industries, SAIL, Shakti Pumps, Skipper, Surana Solar, Tata Motors, Tata Steel, Vijaya Bank, Vimal Oil & Foods and VIP Industries were some of the notable stocks to hit a new 52-week low.