Nifty trades above 23,200; realty shares advance; VIX drops 18.4%

The benchmark indices continued to trade with robust gains in early afternoon trade. Barometers surged to record highs following exit polls projecting a third term for Prime Minister Narendra Modi's government. The Nifty traded above the 23,200 level. Realty shares extended gains for the two consecutive trading sessions.

The last phase of the Lok Sabha polls ended on Saturday, following which the exit poll results forecast a historic third term for Prime Minister Narendra Modi. The counting for the Lok Sabha polls will take place on Tuesday, June 4.

At 12:30 IST, the barometer index, the S&P BSE Sensex climbed 2,304.42 points or 3.12% to 76,265.73. The Nifty 50 index soared 703.95 points or 3.12% to 23,234.65.

The Sensex and Nifty clocked an all-time high of 76,738.89 and 23,338.70 respectively in early trade.

In the broader market, the S&P BSE Mid-Cap index advanced 3.44% and the S&P BSE Small-Cap index gained 2.01%.

The market breadth was strong. On the BSE, 2,506 shares rose and 1,353 shares fell. A total of 158 shares were unchanged.

Economy:

India's manufacturing sector growth softened to a three-month low in May. The HSBC final India Manufacturing Purchasing Managers' Index, compiled by S&P Global, dipped to 57.5 in May from April's 58.8, below a preliminary estimate of 58.4.

However, the index remained above its long-run average and has been above the 50-mark separating contraction from expansion for almost three years. Firms showed the highest level of positive sentiment in more than nine years on expectations that demand will remain buoyant. The optimism prompted companies to add jobs at the fastest pace since November 2022.

India's GDP grew at 7.8% in Q4 of FY24, raising the full-year growth estimate to 8.2%, according to data released by the Ministry of Statistics and Programme Implementation (MOSPI) on Friday.

India's GST collections rose 10% YoY to Rs 1.73 lakh crore in May 2024, driven by a surge in domestic spending. This strong domestic performance points to a healthy economy, despite a 4.3% decline in imports.

Meanwhile, the combined Index of Eight Core Industries (ICI) increased by 6.2% (provisional) in April, 2024 as compared to the Index in April, 2023. The production of Electricity, Natural Gas, Coal, Steel, Refinery Products, Crude Oil and Cement recorded positive growth in April 2024. The final growth rate of the Index of Eight Core Industries for January 2024 is revised to 4.1%. The cumulative growth rate of ICI during 2023-24 reported 7.6% (provisional) as compared to the corresponding period of last year.

Further, after rising for three consecutive weeks, Indias forex reserves fell $2.027 billion to $646.673 billion for the week ended May 24, according to the latest RBI data.

For the week ended May 24, foreign currency assets, a major component of the reserves, decreased by $1.51 billion to $567.499 billion, the data released on May 31 showed.

Gold reserves decreased by $482 million to $56.713 billion during the week ended May 24. The special drawing rights (SDRs) were down by $33 million to $18.135 billion, according to the latest RBI data.

Indias reserve position with the IMF was also down by $1 million to $4.326 billion in the reporting week, the apex bank data showed.

Derivatives:

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, tumbled 18.40% to 20.08. The Nifty 27 June 2024 futures were trading at 23,361.95, at a premium of 127.3 points as compared with the spot at 23,234.65.

The Nifty option chain for the 27 June 2024 expiry showed maximum Call OI of 48.1 lakh contracts at the 24,000 strike price. Maximum Put OI of 48.3 lakh contracts were seen at 22,000 strike price.

Buzzing Index:

The Nifty Realty index jumped 4.28% to 1,063. The index advanced 6.72% in the two consecutive trading sessions.

Godrej Properties (up 6.67%), Prestige Estates Projects (up 5.09%), Brigade Enterprises (up 4.53%), DLF (up 3.72%), Oberoi Realty (up 3.51%), Phoenix Mills (up 3.16%), Macrotech Developers (up 2.88%), Sobha (up 2.24%), Mahindra Lifespace Developers (up 1.69%) and Sunteck Realty (up 0.4%) advanced.

Stocks in Spotlight :

NMDC gained 3%. The state-owned miner's iron ore production declined by 36.92% to 2.34 million tonnes (MT) in May 2024 as against 3.71 MT produced in May 2023.

REC surged 11.33% after the company's board has approved to raise funds by way of non-convertible debentures (NCDs) on a private placement basis upto an aggregate amount of Rs 1.45 lakh crore.

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