Bulls were back with vengeance on Thursday, the expiry day of May futures & options contracts as the late rally helped benchmark indices gained more than 1 percent. The gains were driven by banking & financials, oil & gas stocks and Infosys.
Short covering towards the end of session and the gains in global stocks on easing of political concerns in Italy also lifted market sentiment. Investors awaited March quarter GDP growth numbers due later in the day.
The 30-share BSE Sensex rose 416.27 points or 1.19 percent to 35,322.38 and the 50-share NSE Nifty gained 121.80 points or 1.15 percent at 10,736.20.
In the May series, the Sensex gained 1.7 percent and the Nifty rallied 1.1 percent while Bank index surged more than 7.5 percent.
“Indications are positive and we believe Nifty will test 10,800 shortly. However, we’re seeing limited participation thus focus should be on stock selection,” Jayant Manglik, President, Religare Broking said.
Global cues, movement in crude oil price and progression of monsoon will dictate the market trend from hereon, he feels.
On the global front, Asian markets ended higher following rally in US markets last night, as the recent political concerns in Italy eased. Hong Kong’s Hang Seng ended up 1.4 percent and China’s Shanghai Composite gained 1.9 percent while Japan’s Nikkei rose 0.83 percent.
European stocks also traded mildly higher at the time of writing this article.
Oil prices dipped on unexpected growth in US crude inventories and likely increase in crude output from OPEC and non-OPEC members. Brent crude futures fell half a percent to $77.10 a barrel.
The Nifty Midcap index underperformed frontliners, falling 0.4 percent on weak market breadth. About two shares declined for every share rising on the BSE.
HDFC Bank was the second biggest gainers among Nifty50 stocks and main driver for the rally. It gained 4.5 percent ahead of opening of FII trading window on June 1. The SEBI decided to open the window for institutional trading series (6 lakh series) just for a day on June 1, 2018. In fact, the regulator has decided to scrap the mechanism from July 1 onwards. This has led to an increase in demand for the stock.
The stock helped Nifty Bank gain 2.4 percent. IndusInd Bank (up 3.75 percent) and Kotak Mahindra Bank (up 2.4 percent) also participated in the rally while Axis Bank, ICICI Bank, SBI and Yes Bank gained 0.3-0.9 percent.
Shares of Coal India gained 2.5 percent as brokerages Jefferies and CLSA has raised the target price of the company. Jefferies has maintained buy rating on Coal India and raised target price to Rs 363 from Rs 350 per share.
TCS fell a percent after the stock adjusted for bonus share issue in the proportion of one share for every share held.
HDFC, Infosys, Adani Ports, IOC, M&M, HUL, Eicher Motors, Bajaj Finserv and Tech Mahindra among others rallied 1-5 percent whereas Tata Motors, Sun Pharma, Titan Company, Vedanta, Hero MotoCorp and Hindalco fell 1-3 percent.
Manpasand Beverages stock continued to hit lower circuit for fourth consecutive session, locking in 10 percent lower circuit following resignation of its auditor.
Atlanta was also locked at 20 percent lower circuit on resignation of statutory auditors while Dilip Buildcon share price extended losses, falling another 9 percent on top of 13 percent correction in previous session even after auditors clarified that they haven’t resigned.
Leel Electricals plunged 20 percent after disappointing earnings for March quarter. The company reported loss of Rs 245 crore in Q4FY18 against profit of Rs 22.6 crore in Q4FY17.