Equity markets surge to new six month high levels

Mumbai: Fresh influx of foreign funds, along with short covering and healthy quarterly results, pushed the Indian equity markets to their new six-month high levels on Friday.

The broad based buying in healthcare, oil and gas, and banking stocks, led the barometer 30-scrip sensitive index (Sensex) of the BSE to its highest level in more than 29 weeks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) also touched its highest level in more than 30 weeks. It edged up by 87 points or 1.08 percent, at 8,156.65 points.

The S&P BSE Sensex, which opened at 26,415.93 points, closed at 26,653.60 points -- up 286.92 points or 1.09 percent from the previous close at 26,366.68 points.

The Sensex touched a high of 26,677.43 points and a low of 26,405.28 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bulls -- with 1,403 advances and 1,173 declines.

The key indices had touched their highest levels in 2016 during the previous trade session on Thursday.

The barometer index had surged by 485.51 points or 1.88 percent, while the NSE Nifty had risen by 134.75 points or 1.70 percent.

Further, the benchmark indices have gained more than five percent in the last three sessions.

The broader markets, too, gained during the day's trade. The midcap index rose 1.39 percent, while the smallcap index gained 0.57 percent.

Initially on Friday, the key indices opened on a higher note, in sync with their Asian peers and continued buying activity.

Besides, short covering and a strong rupee helped domestic indices surge. Even the improved fourth quarter earnings of firms accelerated the rise.

However, gains were capped due to weak global crude oil prices and a decline in European stocks ahead of comments from the US Federal Reserve Chairwoman Janet Yellen.

The upcoming speech by the US Fed chair Janet Yellen can give vital cues on a possible June rate hike. A hike in the US interest rates is expected to lead away Foreign Portfolio Investors (FPIs) from emerging markets such as India.

In addition, caution prevailed ahead of the upcoming release of the US GDP (gross domestic product) data.

Investors were seen reluctant to chase prices after SBI (State Bank of India) released disappointing quarterly results due to heavy slippages. The country's largest public sector bank reported a fall of 66 percent in its net profit for the fourth quarter of 2015-16.

Dhruv Desai, director and chief operating officer of Tradebulls, pointed out that the equity markets ended up on higher note boosted by index heavyweights.

"Earnings have been one of the crucial factors driving the market. Short positions are getting squeezed plus fresh long positions are being created," Desai told IANS.

Vaibhav Agarwal, vice president and research head at Angel Broking said that: "A bout of volatility was witnessed as key benchmark indices recovered after trimming gains in mid-afternoon trade."

"The market breadth indicating the overall health of the market was positive."

Both the foreign institutional investors (FIIs) and the domestic institutional investors (DIIs) turned net buyers during the day's trade.

Data with stock exchanges showed that the FIIs bought scrip worth Rs.479.89 crore and the DIIs purchased stocks worth Rs.69.34 crore.

Sector-wise, healthy buying was witnessed in healthcare, oil and gas, and banking stocks, whereas scrip of FMCG (fast moving consumer goods) and telecom witnessed heavy selling pressure.

The S&P healthcare index augmented by 365.26 points; the oil and gas index surged by 244.31 points, and the banking index gained by 226.10 points.

In contrast, the S&P FMCG index declined by 0.98 percent and the telecom index fell by 0.58 percent.

Major Sensex gainers during Friday's trade were State Bank of India (SBI), up 6.42 percent at Rs.195.55; Sun Pharmaceuticals, up 5.83 percent at Rs.825.50; Adani Ports, up 3.65 percent at Rs.191.55; Reliance Industries, up 2.75 percent at Rs.972.65; and Bajaj Auto, up 2.49 percent at Rs.2,567.45.

Major Sensex losers during the day's trade were ONGC, down 1.64 points at Rs.213.15; Axis Bank, down 1.17 points at Rs.513.10; ITC, down 0.79 points at Rs.359.45; NTPC, down 0.71 points at Rs.139.90; and BHEL, down 0.19 points at Rs.128.20.