Equity markets surge on firm global cues, value buying (Roundup)

Indian equity markets surged on Monday, buoyed by firm global cues, coupled with value buying and expectations that key economic legislation will get parliamentary approval.

Both the key indices of the Indian equity markets closed the day's trade with substantial gains and touched their highest levels in the last two weeks.

Similarly, the broader markets, too, gained during the day's trade. Healthy buying was observed in interest rate-sensitive stocks like banks, auto and capital goods.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged higher by 132.60 points, or 1.71 percent, at 7,866.05 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 25,321.83 points, closed at 25,688.86 points -- up 460.36 points or 1.82 percent from the previous close at 25,228.50 points.

The Sensex touched a high of 25,709.68 points and a low of 25,302.86 points during the intra-day trade.

The BSE market breadth skewed in favour of the bulls -- with 1,673 advances and 970 declines.

Both the key Indian indices had ended on a flat-to-negative note on Friday. The barometer index had lost 33.71 points or 0.13 percent, while the NSE Nifty had closed lower by 2.05 points or 0.03 percent.

Initially, the equity markets opened on a positive note on Monday, as value buying after last week's consolidation lifted prices.

Besides, expectations that key economic legislation will get parliamentary approval supported the equity markets' rise.

Investors' risk-taking appetite was increased after a dismal US non-farm payrolls data reduced the potential for a June rate hike there. The US data for last month showed that the economy created 160,000 jobs, against 215,000 in March.

A US rate hike could potentially lead to a massive pull-back of foreign funds from emerging economies like India. It is also expected to dent business margins as access to capital from the US will become expensive.

In addition, the healthy rise in European markets after Greece approved further economic reforms and a two percent increase in crude oil prices boosted investors' sentiments.

However, investors' disappointment over HUL's (Hindustan Unilever) quarterly results and profit booking at the end of the day's trade capped gains.

"After a week of consolidation, value buying and hopes that more economic legislation will get parliament's approval lifted prices," Anand James, chief market strategist, Geojit BNP Paribas Financial Services, told IANS.

"Besides, reduced potential of a US rate hike in June, due to lower non-farm payrolls data boosted investors' sentiments."

Vaibhav Agarwal, vice president and research head at Angel Broking said that the equity markets ended on a positive note due to firm global cues.

"In overseas stock markets, European stocks extended initial gains after the latest data showed German manufacturing orders rebounded sharply in March 2016," Agarwal said.

"India's export import data along with China's CPI (Consumer Price Index) data will be a key trigger for the coming days."

Both the foreign institutional investors (FIIs) and domestic institutional investors (DIIs) turned into net buyers during the day's trade. Data with stock exchanges showed that the FIIs bought stocks worth Rs.224.40 crore, while the DIIs purchased scrip worth Rs.350.60 crore.

Sector-wise, all the 19 sub-indices of the BSE made gains, led by banking, automobile and capital goods stocks.

The S&P BSE banking index augmented by 453.37 points, followed by the automobile index, which surged by 292.60 points, and the capital goods index gained by 244.36 points.

Major Sensex gainers during Monday's trade were Bajaj Auto, up 3.78 percent at Rs.2,527.95; Axis Bank, up 3.41 percent at Rs.477.25; ICICI Bank, up 3.28 percent at Rs.225.30; HDFC, up 3.12 percent at Rs.1,204; and Larsen and Toubro (L&T), up 2.72 percent at Rs.1,294.35.

Major Sensex losers were Dr.Reddy's Lab, down 0.91 percent at Rs.2,842; HUL, down 0.80 percent at Rs.846.10; Tata Steel, down 0.12 percent at Rs.329.05; and Cipla, down 0.03 percent at Rs.536.60.

--IANS

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