Key benchmark indices logged strong gains in a steady session of trade on sustained buying demand for index pivotals. The barometer index, the S&P BSE Sensex, gained 260.48 points or 0.86% at 30,582.60, as per the provisional closing data. The Nifty 50 index gained 66.85 points or 0.71% at 9,512.25, as per the provisional closing data. Both the Sensex and the Nifty hit record high levels in late trade. Reports of retirement fund manager Employees' Provident Fund Organization (EPFO) looking to shore up its inflow in local stocks fueled a rally on the domestic bourses.
Index heavyweight and cigarette major ITC gained. TCS, State bank of India and Bharti Airtel were the other key gainers. Auto stocks rose.
The Sensex jumped 269.43 points or 0.89% at the day's high of 30,591.55 in late trade, a record high for the barometer index. The index rose 41.25 points or 0.14% at the day's low of 30,363.37 at the onset of the session. The Nifty gained 71.80 points or 0.76% at the day's high of 9,517.20 in late trade, a record high for the index. The index rose 10.95 points or 0.12% at the day's low of 9,456.35 at the onset of the session.
Reports indicating that retirement fund manager Employees' Provident Fund Organization (EPFO) will invest at least Rs 18000 crore in stocks in the current financial year ending 31 March 2018 (FY 2018) boosted sentiment on the domestic bourses. Labour minister Bandaru Dattatreya was quoted as saying yesterday, 15 May 2017 that his ministry is positive on more equity exposure because of the encouraging returns it has received over the last one-and-a-half years.
EPFO started investing in stocks in August 2015. In FY 2016, it invested 5% of the annual incremental corpus in equities and in FY 2017, 10%. EPFO has an annual incremental corpus of more than Rs 1.2 trillion and 15% of that will be at least Rs18000 crore, reports indicated. The decision on this is likely to be taken by central board of trustees (CBT) of the EPFO in its meeting on 27 May 2017.
After a gap-up opening on positive Asian cues, indices trimmed gains in morning trade as stocks took a breather after an initial upmove. The market held firm and hovered in positive zone in a small range till afternoon trade. Stocks caught momentum since mid-afternoon trade and continued to gain further ground in late trade.
Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On the BSE, 1,430 shares rose and 1,354 shares fell. A total of 176 shares were unchanged.
The total turnover on BSE amounted to Rs 4973.08 crore, higher than the turnover of Rs 4717.57 crore registered during the previous trading session.
Index heavyweight and cigarette major ITC gained 2.2% to Rs 283.45. The stock hit a high of Rs 284.25 and low of Rs 278.10 in intraday trade.
Auto stocks rose. Hero MotoCorp (up 3.2%), Eicher Motors (up 1.39%), Tata Motors (up 1.23%), Ashok Leyland (up 0.46%), Escorts (up 0.85%), Bajaj Auto (up 0.98%) and TVS Motor Company (up 1.57%) gained. Mahindra & Mahindra (M&M) (down 0.6%) fell.
Maruti Suzuki India rose 2.11% after the company launched new Dzire sedan nationally today, 16 May 2017. The announcement was made during market hours today, 16 May 2017. The petrol variant of the vehicle is priced between Rs 5.45 lakhs to Rs 8.41 lakhs and diesel variant between Rs 6.45 lakhs to Rs 9.41 lakhs ex-showroom Delhi.
Meanwhile, India's monsoon rains are reportedly expected to arrive on the southern Kerala coast on 30 May 2017, two days ahead of schedule. India looks likely to receive higher monsoon rainfall than previously forecast as concern over the El Nino weather condition has eased, K. J. Ramesh, director general of the state-run India Meteorological Department had reportedly said last week.
On the macro front, India's merchandise exports grew in double digits in dollar terms for the third consecutive month in April. Data released by the government yesterday, 15 May 2017 showed that exports grew 19.77% in April to $24.63 billion while imports rose 49.07% to $37.88 billion, leaving a trade gap of $13.24 billion.
Overseas, European and Asian stocks traded on a mixed note. In US, the S&P 500 and the Nasdaq Composite closed at fresh records yesterday, 15 May 2017 as a jump in oil prices to a two-week high lifted Wall Street sentiment. Crude rose for a fifth day, topping $49 a barrel, after Saudi Arabia and Russia supported an extension of output cuts.
The Dow Jones Industrial Average rose 85.33 points, or 0.4%, to close at 20,981.94. The S&P 500 index added 11.42 points, or 0.5%, to finish at 2,402.32. The Nasdaq Composite Index gained 28.44 points, or 0.5%, to end at 6,149.67.
In economic data, a gauge of New York-area manufacturing slumped into negative territory for the first time since the presidential election. The Empire State manufacturing index for May fell to negative 1, from positive 5.2 in April. Separately, sentiment among home builders rebounded in May, buoyed by optimistic views of demand for housing.
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