The rally on the bourses gathered steam in mid-morning trade, with the barometer index, S&P BSE Sensex, and the Nifty 50 index, both hitting their highest level in almost a week. At 11:15 IST, the Sensex was up 374.92 points or 1.48% at 25,680.39. The gains for the Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was currently up 121.10 points or 1.56% at 7,869.95. Gains in global stocks aided the upmove on the domestic bourses.
The rally on the domestic bourses was further aided by a foreign brokerage upgrading the Indian equity market to 'overweight' from 'equalweight'. According to media reports, the brokerage has cited attractive valuations of Indian stocks compared with other emerging markets, the country's strong macroeconomic fundamentals, a recovery in earnings growth, prospects of the passage of the goods and services tax (GST) bill in the Rajya Sabha, expectation of good monsoon this year and likely further easing of interest rates by the Reserve Bank of India (RBI) as reasons for upgrading India's rating.
The Sensex jumped 387.75 points, or 1.53% at the day's high of 25,693.22 in mid-morning trade, its highest level since 19 May 2016. The index rose 125.12 points, or 0.49% at the day's low of 25,430.59 in early trade. The Nifty rose 125.85 points, or 1.62% at the day's high of 7,874.70 in mid-morning trade, its highest level since 19 May 2016. The index rose 60.45 points, or 0.78% at the day's low of 7,809.30 in early trade.
The broad market depicted strength. There were more than two gainers against every loser on BSE. 1,453 shares rose and 632 shares fell. A total of 124 shares were unchanged. The BSE Mid-Cap index was currently up 0.82%. The BSE Small-Cap index was currently up 0.95%. Both these indices underperformed the Sensex.
In overseas stock markets, Asian equities edged higher after encouraging reports on the US housing market saw sharp gains in US stocks overnight. Sales of new homes in the US surged 16.6% in April 2016, the fastest pace of increase in more than eight years, data released yesterday, 24 May 2016, showed. European stocks registered strong gains yesterday, 24 May 2016, after a poll showed a 13-point lead in support among Britons to stay in the European Union (EU) over their rivals who support UK's exit from the EU. Britons will vote on 23 June 2016 on whether the country should remain a member of the EU.
Stocks of oil exploration and production firms edged higher on rise in crude oil prices. Cairn India (up 1.24%), ONGC (up 0.99%), Reliance Industries (up 0.42%) and Oil India (up 0.19%) edged higher. Higher crude oil prices will result in higher realization from crude sales for oil exploration firms.
Shares of public sector oil marketing companies also moved higher. Indian Oil Corporation (up 0.47%), HPCL (up 1.49%) and BPCL (up 0.84%) edged higher.
Crude oil futures edged higher on speculation that a weekly report from the US government will show fall in US crude stockpiles after a US oil industry body announced a reduction in US crude supplies for the week ended 20 May 2016. Brent for July settlement was up currently up 53 cents at $49.14 a barrel. The contract had risen 26 cents or 0.53% to settle at $48.61 a barrel during the previous trading session.
Pharmaceutical shares edged higher. Aurobindo Pharma (up 2.26%), Glenmark Pharmaceuticals (up 0.96%), Cadila Healthcare (up 0.85%), Alkem Laboratories (up 0.77%), IPCA Laboratories (up 0.68%), Lupin (up 0.47%), Dr Reddy's Laboratories (up 0.44%), Divi's Laboratories (up 0.43%), Sun Pharmaceutical Industries (up 0.41%), Piramal Enterprises (up 0.30%), GlaxoSmithKline Pharmaceuticals (up 0.29%) and Wockhardt (up 0.07%), edged higher. Strides Shasun was down 0.12%.
Cipla lost 4.97% at Rs 470.30 after consolidated net profit fell 68.9% to Rs 81 crore on 5.6% growth in income from operations to Rs 3267 crore in Q4 March 2016 over Q4 March 2015. The company's earnings before interest, taxation, depreciation and amortization (EBITDA) declined 56.9% to Rs 219 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 24 May 2016.
Gujarat State Fertilizers & Chemicals (GSFC) slumped 6.4% after net profit dropped 49.5% to Rs 32.57 crore on 30.2% rise in total income to Rs 1715,30 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 24 May 2016.
Bajaj Finserv edged higher after announcing Q4 results. The stock was up 1.97%. Bajaj Finserv's consolidated net profit fell 26.75% to Rs 517.95 crore on 6.67% growth in total income to Rs 2567.18 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 24 May 2016. During the year ended 31 March 2016 (FY 2016), Bajaj Allianz Life Insurance Company transferred surplus in the policyholders' revenue account based on its audited interim financial statements and to the extent permissible as per the applicable regulations, to the shareholders' account on a quarterly basis, as against the past practice of transferring such surplus at the close of the financial year. Consequently, the results for Q4 March 2016 are not comparable.
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