Markets surge ahead of RBI policy; Sensex up 468 points

L&T, ONGC and banking scrips power gains in today's trade

Markets ended on a strong note on account of strength in the capital goods space and a bounce back in the banking counters ahead of the RBI policy meeting on Tuesday. The Sensex closed at 24,685, stronger by 468 points and the Nifty was up 133 points at 7,363.

The mid and smallcap scrips were back in demand. The smallcap and midcap indices advanced over 2% each in today’s trade.

All the major sectoral indices, barring defensives such as FMCG and pharma were in the green, with capital goods and banks leading the upmove.  

The RBI is widely expected to keep rates unchanged when it reviews its monetary policy on Tuesday, the first since the new Modi-led government's reign at the Centre.

On the economic front, manufacturing activity inched up in May compared to the previous month, according to the widely-tracked HSBC Purchasing Managers' Index (PMI). The index for manufacturing rose marginally to 51.4 points in May from 51.3 points in April.

Meanwhile, encouraging China factory data and another closing record on Wall Street lifted Asian equities and commodities, while the euro held recent gains against the dollar ahead of a European Central Bank meeting. Tokyo's Nikkei led by way, rising 2.1%. MSCI's broadest index of Asia-Pacific shares outside Japan was little changed. Greater China markets are closed on Monday for a holiday.

The capital goods and banking stocks had a good session of trade. L&T has soared by 6.4% at Rs 1,646 to top the gainers list on the BSE and BHEL jumped by 2.5% at Rs 248 to give it company in the capital goods space.

The banking space seems to have given a breakout after trading in a sideways manner in the past 1-2 weeks. SBI soared by 4.2% at Rs 2649, HDFC gained 2.3% at RS 896, Axis Bank firmed up by 3.6% at Rs 1902, ICICI Bank jumped by 2.8% at Rs 1458 and HDFC Bank has added 3.3% at Rs 820.

Bharti Airtel, ONGC, Tata Steel, Maruti Suzuki and Gail India up 3-5.5% were the other notable names in green.

On the other hand, the defensive pharma and FMCG stocks were among the laggards. Sun Pharma weakened by 1.4% at Rs 599 and Dr Reddy's shed 2% at Rs 2,400.

In the FMCG space, Hindustan Unilever shed 0.5% at Rs 598 and ITC lost 1.3% at Rs 337.

NTPC and TCS were the only other names in red down 0.6% each.

The market breadth was very positive on BSE. 2,001 stocks advanced while 977 stocks declined.

Result Reaction

Jyoti Structures plunged 10% to Rs 54.9  after posting a net loss of Rs 12.53 crore in the fourth quarter ended March 2014 as compared to a net profit of Rs 22.20 crore in the same quarter last fiscal. Further, total income from operations rose 39.3% Rs 1307.62 crore in Q4 March 2014 over Q4 March 2013.

Shalimar Paints gave off 8.6% to Rs 82.05 after posting a consolidated loss of Rs 10.29 crore in the fourth quarter ended March 2014 compared to a net profit of Rs 0.37 crore in the same quarter last fiscal.

Ruchi Soya dipped 3.9% to Rs 42.3 after posting a net loss of Rs 19.65 crore in the quarter ended March 2014 as against net profit of Rs 78.59 crore during the previous quarter ended March 2013. Sales of the company declined 16.08% to Rs 6308.07 Crore in the quarter ended March 2014 as compared to Rs 7516.47 crore during the previous quarter ended March 2013.

Gitanjali Gems slipped 6% to Rs 77.3 after posting a net loss of Rs 35 crore for the quarter ended March 31, 2014 compared with a net profit of Rs. 44.4 crore for the quarter ended March 31, 2013.

NMDC added nearly 4% to Rs 176.35 after the state-owned iron ore miner reported a 34% rise in net profit at Rs 1,962 crore for the quarter ended March 2014, compared with a profit after tax of Rs 1,465 crore in the same quarter previous year. The company's turnover during the period increased by 21% to Rs 3,884 crore from Rs 3,204 crore.

Wind turbine maker Suzlon Energy was locked in upper circuit at Rs 24.15 on the BSE after the company announced that its net loss for the quarter ended 31 March narrowed to Rs603.45 crore from Rs1,912.72 crore in the year-ago period. This was achieved by cost reductions and restructuring of operations.

Power Grid Corporation (PGCIL) gained 2.8% to Rs 125.15 after reporting a jump of 6% in net profit at Rs 1,175.8 crore for the quarter ended March 31 as against a net profit of Rs 1,109.4 crore during the same quarter in the previous year. The hike in profits is supported with an increase in income from transmission and consultancy services businesses.