Markets end higher led by financials, IT stocks

Markets finished firm supported by a broad based rally led by financials and IT shares on hopes of rate cut by the Reserve Bank of India amid a depredating rupee.

Meanwhile, foreign portfolio investors bought shares worth a net Rs 48.06 crore yesterday, 19 May 2015, snapping a five day selling streak.

Provisionally, the Sensex zooms 192 points to end at 27,837 and the Nifty surged 48 points to close at 8,414.

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(updated at 3.30 PM)

Benchmark indices continue to trade higher, amid choppiness, supported by strong buying among software and financial shares.

At 14:45 PM, the Sensex was up 175 points at 27,820 and the Nifty was quoting at 8,417, up 51 points.

However, the broader markets are under-performing the benchmark indices-the BSE Midcap index has slipped by 0.1%, whereas the Smallcap index is trading marginally in the positive.

The market breadth is marginally positive, with 1,310 shares advancing versus 1,282 shares declining on the BSE.

Meanwhile, foreign portfolio investors bought shares worth a net Rs 48.06 crore yesterday, 19 May 2015, snapping a five-day selling streak.

On the currency front, the rupee depreciated to 63.76 against the US dollar at the Interbank Foreign Exchange due to appreciation of the American currency overseas riding on strong economic data.

Further, Reserve Bank of India (RBI) Governor Raghuram Rajan reportedly said yesterday, 19 May 2015, that inflation has come down tremendously in India.

EXPERT VIEW

According to Ranak Merchant, Technical Analyst - Strategies of Sushil Financial Services, “Sell in May and go away' held true, as our markets witnessed a correction from mid April onwards. The fall that was steep took benchmark indices below their respective 200 Day EMA, Nifty even breached the psychological mark of 8,000 as a brief encounter. The rally that emanated from sub-8,000 had its resistance near 8,341 which appears to be well surpassed at current levels of 8,400+.”

Support has hence been shifted upwards from 8,000-8,050 zone to 8,341. Today's trade saw a high near 8440 levels (50 Day EMA) which is the new found resistance zone. A move above 8449 hence will pave way for 8630 with support near 8341. Next week being derivatives expiry and the next week crucial with the RBI policy on June 02, volatility is likely to continue, she adds.

ASIAN MARKETS

The euro slid to a two-week low and a rally in European shares stalled on Wednesday after a Greek official said the country may not make an upcoming repayment to the International Monetary Fund.

The euro's fall follows remarks from a European Central Bank board member on Tuesday that the central bank could increase the pace of its bond-buying in May and June, bringing its losses against the dollar this week to more than 3%.

Japan's Nikkei stock index ended up 0.9% at a fresh 15-year peak, helped by a weaker yen and data showing the economy grew at a 2.4% annualised rate in the January-March period. That was its fastest pace in a year, beating the consensus estimate for 1.5% growth.

MSCI's broadest index of Asia-Pacific shares outside Japan, however, was down 0.3%.

SECTORS & STOCKS

BSE IT and BSE Bankex index have surged 1-2% each. However, BSE Metal, Capital Goods, FMCG and Auto indices have dipped 0.1-1% each.

IT shares have gained ground as the rupee depreciated against the US dollar due to appreciation of the American currency overseas riding on strong economic data. TCS and Wipro have gained over 1.5%.

Infosys has surged over 1%. Infosys chief executive officer Vishal Sikka, during a recent investor conference, acknowledged that other than resuming the growth curve for the company, his focus is also to get discipline and operational excellence back.

Tata Power is trading higher by 2% to Rs 78 on the NSE after the company reported a better-than-expected consolidated net profit of Rs 159 crore in the fourth quarter ended March 31, 2015 (Q4) mainly due to lower depreciation and lower coal prices.

From the financial space, ICICI Bank, HDFC Bank, SBI and HDFC have gained 1-2% each.

The "spectre of deflation" is spurring the world's major central banks into a dangerous struggle for stronger domestic growth that imperils financial markets and ignores the needs of developing nations, Reserve Bank of India Governor Raghuram Rajan said on Tuesday.

Reliance Inds has gained over 1%. The company has raised $ 200 million on Tuesday through 20-year bonds. The notes have been issued at par and will bear a fixed interest rate of 5 per cent per annum with interest payable semi-annually in arrears.

Bharti Airtel is up almost 1%. Telecom major Airtel is all set to buy out Augere Wireless -- 4G spectrum Holder Company in Madhya Pradesh circle -- for about Rs 150 crore.

Other notable gainers are GAIL, M&M, Maruti Suzuki, NTPC and Cipla.

Tata Steel and DLF are trading lower by 2.5% and 0.7% respectively on caution ahead of their results to be announced later during the day. Bajaj Auto is down over 2% ahead of its results due on Thursday.

Tata Steel said it has no immediate plans to sell-off its Long Products Europe business to the Switzerland-based Klesch Group.

Hindalco, Vedanta, Coal India and BHEL have slipped 0.1-1 each%.