Nifty ends above 8,750 on Moody's India outlook upgrade

The 30-share Sensex ended higher by 177.46 points at 28,885.21 and the Nifty gained 63.90 points at 8,778.30

Markets gained for the fifth straight session led by a rally in bank shares after global rating agency Moody's revised India's sovereign outlook to positive from stable while Reliance Industries extended gains on talk of huge gas find.

The 30-share Sensex ended higher by 177.46 points at 28,885.21 and the 50-share Nifty gained 63.90 points at 8,778.30.

Among broader markets, BSE Midcap index inched up 0.2.5% whereas the BSE Smallcap index gained over 0.7%. The market breadth was positive with 1,586 advances against 1,256 declines on the BSE.

Meanwhile, a Reuter’s poll of economists hinted that factory growth slowed for a third month running in February.

Weaker growth and inflation below the RBI's goal of 6% by January 2016 would give the central bank room to ease policy further this year to spur activity. The survey of 17 forecasters predicted India's industrial production (IIP) increased 2.4% in February from a year earlier, below January's 2.6%.

"After the recent underperformance, banking sector finally witnessed strong rebound on Thursday and ended on strong note. We believe this move will extend further in the coming sessions and it would further fuel the prevailing recovery in the benchmark index. In banking space, we reiterate our advice to restrict your stock selection to private banking counters for trading and investment," said Jayant Manglik, President-retail distribution, Religare Securities.

MOODY'S OUTLOOK

Rating agency Moody's today upgraded India's credit outlook to positive from stable, saying that the measures taken by the policymakers would enhance economic strength.

"The Modi government's push towards a hassle-free business environment in the country impressed Moody's to shift its outlook on Asia's No. 3 economy from stable to positive. India's Baa3 rating was affirmed and the outlook was revised from stable," Moody's said in a statement Thursday in Singapore.

"Moody's decision continues to reaffirm that rating agencies, global investors and our own domestic businesses have faith in India's growth outlook and our financial strength as a sovereign," Minister of State for Finance, Jayant Sinha said reacting to the development.

SATYAM CASE

A Hyderabad-based special court set up to try the Satyam Satyam Computer Services fraud case has convicted former chairman B Ramalinga Raju and other nine accused following a seven-year trial. The court will announce the quantum of punishment on Friday. Reacting to the news, Tech Mahindra which has acquired the company ended marginally lower.

SECTORS & STOCKS

BSE Bankex and BSE Metal index surged between 1-2.5%. However, BSE Healthcare, Capital Goods and Realty indices dipped between 1-2%.

Banking shares ended higher after Moody's Investors Service changed India's outlook to 'positive' from 'stable' earlier and affirmed 'Baa3' credit rating on Thursday.

Kotak Mahindra Bank rallied 5% to Rs 1,439, while Punjab National Bank (PNB) gained 4% at Rs 159 on the National Stock Exchange (NSE). IndusInd Bank, Bank of India, YES Bank, Axis Bank, Bank of Baroda, ICICI Bank and Canara Bank were up 2-5%.

RIL extended the gains of the previous session, soaring by almost 4% on reports that the company has discovered massive gas reserves at MJ-1 block in its KG-D6 basin.

India's summer monsoon rains are expected to be normal this year, the chief economic adviser at the finance ministry said on Thursday. Monsoon rains are vital for India's farm sector, which accounts for 14 per cent of the $2 trillion economy, as half of the country's farmland lacks irrigation. Weak monsoon rains have cut farm output in the past, stoking inflation. Tracking the news FMCG major HUL firmed up and gained over 1%.

Other notable gainers were Tata Steel, Hindalco, Coal India, Maruti Suzuki and Hero Moto. On the losing side, Sun Pharma, GAIL, Bharti Airtel, Cipla and BHEL fell between 1-4%.

Sun Pharmaceutical Industries, Lupin, Cipla, Dr Reddy’s Laboratories, Torrent Pharmaceuticals, Strides Arcolab, Wockhardt, Glenmark Pharmaceuticals and Cadila Healthcare were down 2-3% on the BSE among the pharma sector stocks.

Among other shares, agrochemical companies rallied by up to 15% on the bourses on back of heavy volumes. PI Industries, Insecticides and Sharda Cropchem touched their respective all-time high price on the BSE.

GLOBAL MARKETS

World stocks marched higher again on Thursday, drawing support from European auto sales and German trade data, while expectations that the first US interest rate increase will come in the latter part of the year continue to grow.

Investors also breathed a sigh of relief as Greece confirmed it will pay a 450 million-euro loan tranche to the International Monetary Fund on Thursday, meeting a deadline and taking the immediate heat off the cash-strapped country.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.7% to its highest since mid-September. That marks nine straight winning sessions, its best run since September 2013.

Japanese stocks rose 0.75% to a 15-year high, while Hong Kong powered up 2.7% to a seven-year peak. Hong Kong is up nearly 7% so far this week, by far its best week since December 2011.