Nifty hits 3-month high, ends shy of 6,000

Markets ended higher this Thursday with 50-share Nifty closing near key resistance level of 6,000 on back of buying in rate-sensitive sectors such as banks, real-estate.

Risk appetite improved on hopes of aggressive policy action by the Reserve Bank of India in its credit policy tomorrow after headline inflation to over 3-year low in March.

The rate-cut optimism grew stronger after global commodity prices dropped. Lower crude oil prices have the potential to shave off 50 basis points (bps) from the headline inflation print during the year. Barclays expects CAD to moderate to a little over three per cent of gross domestic product over the next three years, much worse than the long-term average of 1.5 per cent.

Mirroring the optimism, the Bombay Stock Exchange's 30-share index Sensex ended higher 231.59 points at 19,735.77, its highest level since Feb 4 while the National Stock Exchange's 50-share Nifty rose 69.15 points to close at 5,999.35, its highest level since Feb 1.  

Global risk appetite was, however, frail after weak set of economic data from US and China, the two biggest economies of the world.

Reports yesterday showed U.S. companies added fewer workers than forecast in April and the Institute for Supply Management’s factory index fell to 50.7 in April from 51.3 in March.

Meanwhile, HSBC Purchasing Managers' Index (PMI) dropped to 50.4 in April from March's 51.6 and was largely in line with a flash reading last week of 50.5.

Asian markets ended mixed with Hong Kong’s Hang Seng falling 0.3% to 22,669.83, China’s Shanghai Composite shed 0.2% to 2,173, Singapore’s Straits Times added 1% to 3,402 while Japan’s Nikkei was down 0.7% to 13,694.

Meanwhile, European markets traded also traded on a mixed note. France’s CAC declined 0.1% to 3,851, Germany’s DAX rose 0.1% to 7,924 and UK’s FTSE was down 0.08% to 6,446.

Back home, all the key sectoral indices gained with IT, realty, banks, capital goods topping the chart on the BSE.

The gainers on the Sensex included, TCS and Infosys rising 4% and 2% respectively , HDFC and SBI gained over 2% each, Larsen & Toubro rose 2.6% on the BSE.

The laggards included counters such as Tata Motors falling 1% and Hero MotoCorp down 2% respectively, Hindustan Unilever dropped 2%, Hindalco Industries shed nearly 1.4% on the BSE.

The key notable movers included,  Larsen and Toubro (L&T) which gained nearly 3% after engineering giant said that its Malaysia based switchgear subsidiary, Tamco Switchgear, won $85 million (Rs 456 crore) order in Qatar.

Tata Motors dropped 1% after registering a 14.8% decline in total vehicle sold in the month of April 2013.

Syndicate Bank  surged 8% to Rs 129.45 on reporting a better-than-expected 92% year-on-year (yoy) jumped in net profit at Rs 592 crore for the quarter ended March 2013 (Q4) due to lower provisioning for bad loans and tax expenses.

Bharti Airtel dipped 0.6%  on BSE after reporting 49% year-on-year (yoy) drop in its consolidated net profit at Rs 509 crore for the quarter ended March 2013 (Q4) mainly due to higher depreciation and amortization cost, net interest costs. The company had reported a profit of Rs 1,006 crore in year ago quarter.

The broader markets gained with mid-caps and small-caps rising nearly 0.7% on the BSE.

The market breadth was positive. Out of 2,493 stocks traded, 1,260 stocks gained compared to 1,110 declines on the BSE.