Key benchmark indices held firm after extending gains in mid-afternoon trade. At 14:18 IST, the barometer index, the S&P BSE Sensex, was up 440.89 points or 1.75% at 25,586.48. The gains for the Nifty 50 index were lower than the Sensex's gains in percentage terms. The Nifty was currently up 127.70 points or 1.66% at 7,836.65. A confluence of positive factors viz. forecast of good rains during the June-September 2016 southwest season, further easing of consumer price inflation raising hopes of further rate cut from the Reserve Bank of India, rebound in industrial production and gains in global stocks aided the latest rally on the domestic bourses.
The Sensex jumped 468.73 points or 1.86% at the day's high of 25,614.32 in mid-afternoon trade, its highest level since 6 January 2016. The barometer index gained 212.83 points or 0.84% at the day's low of 25,358.42 in early trade. The Nifty rose 139.80 points or 1.81% at the day's high of 7,848.75 in mid-afternoon trade, its highest level since 4 January 2016. The index rose 63.25 points or 0.82% at the day's low of 7,772.20 in early trade.
In overseas stock markets, Asian and European stocks edged higher after the latest data showed stronger-than-expected growth in China's exports. China is the world's second biggest economy after the United States. In mainland China, the Shanghai Composite settled 1.44% higher. In Hong Kong, the Hang Seng index closed 3.19% higher. China's exports rose 11.5% in March year-over-year in dollar terms. Imports declined 7.6%, compared with February's 13.8% drop. Japanese stocks rose as the yen weakened against the dollar. The Nikkei 225 Average settled 2.84% higher. The yen has weakened after hitting 17-month high against the dollar early this week. Strength in the local currency hurts the competitiveness of Japanese exporters.
US stocks gained yesterday, 12 April 2016, led by energy companies after news reports said Saudi Arabia and Russia were working toward an agreement to cut oil production. The world's major crude oil producers led by Russia and Saudi Arabia have convened a meeting on Sunday, 17 April 2016, in Doha, Qatar to discuss measures to stabilise prices, including a proposal to freeze output. Iran has ruled out freezing output until its production recovers to pre-sanction levels.
Closer home, the broad market depicted strength. There were almost two gainers against every loser on BSE. 1,686 shares rose and 875 shares fell. A total of 133 shares were unchanged. The BSE Mid-Cap index was currently up 1.16%. The BSE Small-Cap index was currently up 1.28%. Both these indices underperformed the Sensex.
FMCG stocks gained after India's weather department predicted good rains during the June-September 2016 southwest season. Tata Global Beverages (up 1.31%), Britannia Industries (up 2.27%), Jyothy Laboratories (up 0.35%), Procter & Gamble Hygiene and Health Care (up 0.27%), Hindustan Unilever (HUL) (up 1.99%), Dabur India (up 2.12%), Colgate Palmolive India (up 1.95%) and Godrej Consumer Products (up 1.02%) gained. Nestle India (down 1.42%), Marico (down 2.02%), GlaxoSmithkline Consumer Healthcare (down 0.72%) and Bajaj Corp (down 3.52%) declined. FMCG firms derive substantial revenue from rural India.
Index heavyweight and cigarette major ITC rose 1.92% to Rs 328.85. The stock hit high of Rs 329.30 and low of Rs 323.90 so far during the day.
Realty stocks rose on hopes that the Reserve Bank of India could ease interest rates further after latest data showed that consumer price inflation eased to a six-month low in March. DLF (up 2.51%), D B Realty (up 2.76%), Sobha (up 1.24%), Indiabulls Real Estate (up 2.13%), Unitech (up 1.79%), NBCC (up 1.18%), Godrej Properties (up 1.21%), Housing Development & Infrastructure (HDIL) (up 3.85%), and Oberoi Realty (up 1.76%) edged higher. Lower interest rates may help revive demand for properties. Purchases of both residential and commercial property are largely driven by finance.
Sanghvi Forging & Engineering rose 5.83% after the company said it has bagged orders worth Rs 12 crore. The announcement was made after market hours yesterday, 12 April 2016. The fresh orders have come from oil & gas and power sectors. The majority of the orders received by the company are for its new heavy open die forging plant. The company's total order book size as on 13 April 2016 is Rs 40 crore and out of this around 75% is domestic and rest is from export orders, the company said.
The India Meteorological Department (IMD) said in its initial monsoon forecast that the southwest monsoon is likely to be 106% of the Long Period Average (LPA) during the four-month period from June to September 2016, with an error margin of plus/minus 5%. According to the weather office, there is 34% probability of above normal rains, 30% probability each of excess and normal rains, 5% probability of below normal rains and 1% probability of deficient rains. The IMD's announcement hit the market after trading hours yesterday, 12 April 2016.
As the sea surface temperature conditions over the Pacific and Indian Oceans, particularly the ENSO conditions over the Pacific (El Nino or La Nina) are known to have strong influence on the Indian summer monsoon, IMD is carefully monitoring the sea surface conditions over the Pacific and the Indian oceans. The latest forecast from the Monsoon Mission Coupled Climate Model points to El Nino conditions weakening to moderate to weak levels during the first half of the monsoon season and ENSO neutral conditions likely to get established thereafter, the weather office said in a statement.
The IMD will issue an updated monsoon forecast in June 2016 as a part of the second stage forecast. Along with the updated forecast, the IMD will issue separate forecasts for rainfall in July and August and the distribution of rainfall over the four geographical regions of India.
On the macro front, the latest data showed that inflation based on consumer price index (CPI) dipped to six-month low of 4.83% in March 2016, with the index easing for second straight month. The CPI inflation for February 2016 was revised slightly upward to 5.26% from the provisional figure of 5.18% reported earlier. The core CPI inflation fell to 4.54% in March 2016 from 4.79% in February 2016.
Another data showed that industrial production rose 2% in February 2016 over February 2015, snapping consistent decline for last three straight months. The mining output posted healthy 5% growth, while electricity generation improved 9.6% contributing to the overall growth in industrial output in February 2016. The output of the manufacturing sector improved 0.7% in February 2016. Both the CPI and industrial production data were announced after market hours yesterday, 12 April 2016.
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