INDICES TRADE WITH ROBUST GAINS; BANK SHARES ADVANCE

The headline equity indices continued to trade in narrow range with major gains in mid-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. Bank shares witnessed buying demand for the third consecutive trading session.

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 14:30 IST, the barometer index, the S&P BSE Sensex climbed 2,381.27 points or 3.16% to 76,312.33. The Nifty 50 index soared 692 points or 3.07% to 23,222.70

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 3.54% and the S&P BSE Small-Cap index gained 2.13%.

The market breadth was strong. On the BSE, 2,423 shares rose and 1,506 shares fell. A total of 147 shares were unchanged.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, dropped 17.29% to 20.35.

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, India�s 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.

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

Buzzing Index:

The Nifty Bank index surged 3.69% to 50,792.20. The index rallied 4.72% in three consecutives trading sessions.

Bank of Baroda (up 11.91%), State Bank of India (up 9.25%), Punjab National Bank (up 5.95%), IndusInd Bank (up 4.85%), Axis Bank (up 4.55%), Bandhan Bank (up 3.82%), IDFC First Bank (up 2.88%), HDFC Bank (up 2.76%), ICICI Bank (up 2.35%) and Federal Bank (up 1.97%) advanced.

Numbers to Track:

The yield on India`s 10-year benchmark federal fell 0.42% to 6.957 as compared with previous close 6.986.

In the foreign exchange market, the rupee is edged higher against the dollar. The partially convertible rupee was hovering at 83.1200, compared with its close of 83.4200 during the previous trading session.

MCX Gold futures for 5 June 2024 settlement declined 0.47% to Rs 71,550.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.04% to 104.71.

The United States 10-year bond yield fell 0.89% to 4.476.

In the commodities market, Brent crude for Aug 2024 settlement gained 23 cents or 0.28% to $ 81.34 a barrel.

Stocks in Spotlight:

Ashoka Buildcon rallied 6.93% after it emerged declared as the lowest (L-1) bidder for the two projects awarded by Maharashtra State Road Development Corporation (MSRDC) aggregating up to Rs 2,152.72 crore.

Steel Strips Wheels (SSWL) shed 0.02%. The company achieved net turnover of Rs 342.04 crore in May 2024, down 4.26% as compared with Rs 357.27 crore in May 2023.

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