Sensex surges as Banks gallop, rupee climbs

After rising on a weekly basis after a long time, the Indian stock markets ended with healthy gains on the first day of the new trading week. The NSE Nifty came close to the 5000 mark, surging ~70 points in intraday trade. On the other hand, the BSE Sensex jumped by ~200 points, ending above the 16,400 mark. The BSE Sensex ended at 16,417, gaining by 1.2% or 199 points. It had earlier touched a day’s high of 16,440 and a day’s low of 16,273. It opened at 16,289. The NSE Nifty settled at 4986, up by 65 points or 1.3%. It touched a day’s low of 4,931 and day’s high of 4,995. SBI, BHEL, Tata Power, PNB, Sesa Goa, Axis Bank, Tata Motors, Bank of Baroda, Power Grid Corporation, Hindalco Industries, M&M, ICICI Bank, NTPC, Sterlite Industries and HDFC Bank were among the notable leaders on the Sensex and the Nifty. GAIL, BPCL, Maruti Suzuki and ONGC were the notable losers on both the indexes. The INDIA VIX on the NSE fell by 6% to close at 23.68. It hit days high of 25.40. It hit a low of 23.59. The market breadth was positive, 1714 stocks advanced and 1008 stocks declined. The BSE Mid-Cap index and the BSE Small-Cap index rose 1.2% and 0.9%, respectively. All the sectoral indices ended in the green. The Bankex led the sectorals and closed up 2.4%. Power, Consumer Durables, Capital Goods, Auto, PSU, Realty and Metal were the other noteworthy gainers. Today, the Indian markets opened near the day's low but from there on there was no looking back, as the bulls took complete charge of the proceedings. Benchmark Indian indices were on a constant upswing throughout the session. The rise could be attributed to a smart recovery in the Asian markets as well as the Indian Rupee besides another good start to the European trading. The US markets will remain shut today due to a public holiday. The rupee strengthened versus the US dollar, extending the gains from the previous two sessions, as the greenback lost some ground versus the euro in overseas trading. The rupee advanced versus the dollar amid some improvement in global risk tolerance as well. Technically, on the daily charts, the Nifty has been constantly registering higher lows and higher highs, indicating strength in the current turnaround. Another positive is that on the weekly charts, the Nifty has managed to close above the falling trendline, raising the probability of further run-up. In the coming days, results centric action is likely to continue for a while even as FIIs continue to be cautious. Q4 GDP data will be among the key domestic events to keep on one’s radar. Volatility may inch higher before the F&O expiry on Thursday. Today’s solid surge was led by sustained gains in Banking, Power, Consumer Durables, Capital Goods and Auto stocks. "The key indices notched weekly gains last week after a long time on hope of more bold policy action. The petrol price hike stays for now, and a possible upward revision in diesel is also on the cards. It may be a matter of when and not if, as the Centre moves to slash subsidies. A political backlash is a given in the current environment of rising inflation. It remains to be seen how UPA II handles this issue. Although a big drop may not materialize, the bias remains negative. Rupee’s weakness, slowing growth, elevated inflation, widening deficits, policy impasse and eurozone debt troubles are the main pressure points," says Amar Ambani, Head of Research, IIFL. The US dollar index retreated from multi-month highs in Asian trading hours, as concerns about an imminent Greek exit from the eurozone ebbed slightly. Greece’s New Democracy, which supports the plan negotiated with international lenders, was placed first in all six opinion polls published on May 26 as campaigning continued for next month’s general election. The party led by a margin of as much as 5.7% over Syriza, the main party opposed to implementing the terms of financial aid packages, according to a poll. While the Greek election is still some weeks off, this news will allay fears of a quick ‘Grexit’. European stock markets opened higher today, with sentiment lifted by a Greek opinion poll that put the pro-bailout New Democracy party ahead of its main rival, Syriza. Investors chose to ignore concerns surrounding Spain's deteriorating financial conditions and a fragile banking sector.