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India Stocks Review: Surge on hopes of econ reforms, liquidity boost

Friday, May 24

 

By Kanchan Yadav

 

MUMBAI – Optimism that the National Democratic Alliance will take measures to address key issues that the economy is facing, propelled buying by the institutional investors, mostly foreign, which led the benchmark equity indices to their record closing highs. 

 

The Bharatiya Janata Party-led NDA has retained powers at the Centre. 

 

The Nifty 50 index closed at its lifetime high levels of 11844.10 points, up 187.05 points or 1.6%, while Sensex closed at its record high of 39434.72, up 623.33 points or 1.6%. 

 

Fear gauge India VIX closed 15% lower today as market participants heaved a sigh of relief after the poll results. A strong mandate for the BJP for its second term at the Centre has brought an end to the political uncertainty in the country and has fuelled hopes of major reforms and quick measures to fix the ailing economy, dealers said.

 

Concerns over the liquidity crunch in the non-banking sector and a slowdown in the economic growth have been weighing on the equities. 

 

"The government and the Reserve Bank of India will take adequate measures to address the issues plaguing the NBFC sector," a government official told Cogencis today.

 

Foreign institutional investors who were in the sidelines earlier over the uncertainty ahead of the elections may start buying now, which will also aid the equities. Brokerage firm Macquarie Capital Markets said that India also stands to gain flows from foreign investors, given the global trade concerns. 

 

Aggressive buying in the mid-cap and small-cap space also indicated the optimism in the market. The Nifty Smallcap 100 and Nifty Midcap 100 indices rose 2.7% and 2.2%, respectively. 

 

Market participants are now waiting for a potential policy rate cut from the Reserve Bank of India and an investor-friendly ministerial council would be the next trigger for the equity markets, CLSA Asia Pacific Markets said in a report.

 

Strength in rupee and weakness in crude oil prices aided the market sentiment. Sharp buying in the shares of banks, real estate and automobile companies also supported the indices. 

 

Hopes that the government will now introduce new measures to boost liquidity in the banking system and spur consumer spending and economic growth, boosted buying in the shares of banks. Nifty PSU Bank index closed 5.6% higher while Nifty Bank index closed 2.6% higher. 

 

The real estate sector also saw aggressive buying today on hopes of various measure that would boost demand in the sector. CLSA said that the real estate sector is set to gain on the back of various measures from the Centre to provide affordable housing. Nifty Realty index closed 4.4% higher today. 

 

Shares of index major Larsen & Toubro ended up 4.6% on hopes of higher spend on infrastructure by the government. The BJP, in its election manifesto, had said it will make a capital expenditure of 100 trln rupees by 2024 in the infrastructure space.

 

Shares of paint companies–Asian Paints, Berger Paints India and Shalimar Paints–closed 1-13% higher due to a sharp overnight fall in crude oil prices on concern over escalating trade tensions between the US and China. 

 

Lower crude oil prices are positive for these companies as the commodity is a major raw material used to manufacture paints. 

 

Shares of Jet Airways India closed 4.7% lower after Business Standard reported that the Hinduja Group and Abu Dhabi-based Etihad Airways failed to make headway in their negotiations for joint ownership of the airline.

 

Shares of commercial vehicle manufacturers–Ashok Leyland, Tata Motors, Mahindra & Mahindra and Eicher Motors–closed 2.6-5.6% higher following reports that the new government may announce a scrappage policy for inefficient commercial vehicles in the upcoming budget, which is seen boosting demand.  

 

* Among Nifty 50 stocks, 45 rose and 5 fell

* Among Sensex stocks, 27 rose and 4 fell

* On the NSE, 1,405 stocks rose, 342 fell and 352 were unchanged

* On the BSE, 1,834 stocks gained, 689 fell, and 157 were unchanged

* Nifty Auto: Up 3%; Nifty Infrastructure: Up 2.9%; Nifty FMCG: Up 0.8%


BSE                                    : National Stock Exchange

Sensex: 39434.72, up 623.33 pts (1.6%) : Nifty 50: 11844.10, up 187.05 pts (1.6%)


S&P BSE Sensitive Index                    Nifty 50

Lifetime High: 40124.96 (May 23)         : Lifetime High: 12041.15 (May 23)

Record Close High: 39434.72(May 24)      : Record Close High: 11844.10 (May 24)

2019 1st day close: 36254.57 (Jan 1)     : 2019 1st day close: 10910.10 (Jan 1)

2019 Closing High: 39056.65 (Apr 2)      : 2019 Closing High: 11738.50 (Aug 28)

2019 Closing Low: 35352.60 (Feb 19)      : 2019 Closing Low: 10604.35 (Feb 19)

2019 High (intraday): 39270.14 (Apr 3)   : 2019 High(intraday): 11761 (Apr 3)

2019 Low (intraday): 35287.16 (Feb 19)   : 2019 Low (intraday): 10583.65 (Jan 29)

2018 Closing High: 38896.63 (Aug 28)     : 2018 Closing High: 11738.50 (Aug 28)

2018 Closing Low: 32596.54 (Mar 23)      : 2018 Closing Low: 9998.05 (Mar 23)

2018 High (intraday): 38938.91(Aug 28))  : 2018 High(intraday): 11760.20 (Aug 28)

2018 Low (intraday): 32483.8 (Mar 23)    : 2018 Low (intraday): 9951.9 (Mar 23)

2017 High (intraday): 34005.37 (Dec 26)  : 2017 High(intraday): 10515.10 (Dec 26)

2017 Low (intraday) 26447.06 (Jan 2)     : 2017 Low (intraday) 8133.80 (Jan 2)

2016 High (intraday) 29077.28 (Sep 8)    : 2016 High (intraday) 8968.70 (Sep 7)

2016 Low (intraday) 22494.61 (Feb 29)    : 2016 Low (intraday) 6825.80 (Feb 29)

2015 High (intraday) 30024.74 (Mar 4)    : 2015 High (intraday) 9119.20 (Mar 4)

2015 Low (intraday) 24851.77 (Sep 7)     : 2015 Low (intraday) 7545.90 (Sep 7)


End 

 

 

Edited by Arshad Hussain

 

Cogencis Tel +91 (22) 6619-0000 

Send comments to feedback@cogencis.com

 

This copy was first published on the Cogencis WorkStation

© Cogencis Information Services Ltd. 2019. All rights reserved.

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