Equity markets close to highest since October 2015

The Indian equity markets on Monday closed at their highest levels since October 2015. Led by short covering, along with expectations of healthy quarterly results and higher crude oil prices, the equity markets rose for the fifth consecutive session. 

The key indices oscillated in a narrow range due to thin volumes during the day`s trade. They closed with marginal gains, as buying was witnessed in automobile, metal, and information technology (IT) stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged up by 21.85 points or 0.27%, at 8,178.50 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,694.75 points, closed at 26,725.60 points -- up 72 points or 0.27% from the previous close at 26,653.60 points.

The Sensex touched a high of 26,794.96 points and a low of 26,623.33 points during the intra-day trade. In contrast, the BSE market breadth was tilted in favour of the bears -- with 1,372 declines and 1,238 advances.

The key Indian indices had ended on a higher note during the previous trade session on May 27. They had also touched their new six-month intra-day high levels on last Friday. The barometer index had gained 286.92 points or 1.09%, while the NSE Nifty had edged up by 87 points or 1.08%.

The broader markets, too, gained during the day`s trade. The mid-cap index rose 0.35%, while the small-cap index gained 0.42%. Initially on Monday, the key indices opened on a higher note, as extended buying was witnessed after last four sessions of healthy gains.

Besides, flat-to-positive Asian markets, short covering and expectations of improved fourth quarter earnings aided the benchmark indices to rise.

In addition, Brent index-based crude oil prices surpassed the $50 mark for the first time this year. However, gains were capped due to weak rupee and hawkish comments from the US Federal Reserve on a possible June rate hike.

The US Fed chairperson Janet Yellen last Friday hinted towards a possible June rate hike. A hike in the US interest rates is expected to lead away Foreign Portfolio Investors (FPIs) from emerging markets such as India.

Caution also prevailed ahead of the upcoming release of the major macro-economic data like the fourth quarter GDP (gross domestic product), eight core industries (ECI) and the PMI (purchasing managers index).

These key data points can give further cues towards a rate decision by the Reserve Bank of India (RBI) in its monetary policy meet scheduled on June 7.

"Last week`s rally prompted extended buying which supported prices. Mixed-to-positive Asian markets and short covering, too, aided in the upward movement," Anand James, chief market strategist at Geojit BNP Paribas Financial Services, told IANS. 

According to Dhruv Desai, director and chief operating officer of Tradebulls, thin volumes were witnessed during the day`s trade on account of flat European markets and holiday in the US and the UK. 

"Market is waiting for fresh triggers and is now eyeing RBI credit policy next week," Desai said.

Nitasha Shankar, senior vice president for research with YES Securities, pointed out that broader markets marginally outperformed the headline indices as stock specific buying continued. 

"Metal, auto, IT and PSU bank indices extended gains ending in excess of one%," Shankar noted.

"Pharma, reality, media and FMCG (fast moving consumer goods) indices ended marginally in the red led by profit booking." The foreign institutional investors (FIIs) turned net buyers, while the domestic institutional investors (DIIs) were net sellers.

Data with stock exchanges showed that the FIIs purchased scrip worth Rs.355.54 crore and the DIIs sold stocks worth Rs.211.09 crore.

Sector-wise, healthy buying was witnessed in automobile, metal and IT stocks, whereas scrip of oil and gas, realty and finance witnessed heavy selling pressure.

The S&P BSE automobile index surged by 207.07 points, followed by the metal index, which rose by 175.56 points; and the IT index gained by 153.30 points.

On the other hand, the S&P BSE oil and gas index declined by 37.36%, followed by the realty index, which fell by 14.58 points; and the finance index dipped by 6.07 points.

Major Sensex gainers during Monday`s trade were Tata Motors, up 4.23% at Rs.420.55; Coal India, up 3.80% at Rs.292.05; Hero MotoCorp, up 3.02% at Rs.3,093.90; Tata Consultancy Services (TCS), up 2.46% at Rs.2,635.35; and NTPC, up 2.29% at Rs.143.10.

Major Sensex losers during the day`s trade were BHEL, down 5.81 points at Rs.120.75; HDFC, down 2.16 points at Rs.1,230.20; Tata Steel, down 1.79 points at Rs.323.10; Maruti Suzuki, down 1.65 points at Rs.4,073.15; and Sun Pharmaceuticals, down 1.57 points at Rs.812.50.