MARKET CONTINUES TO TRADE WITH ROBUST GAINS; EUROPEAN STOCKS OPENS HIGHER

The key equity indices traded with substantial gains in 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. All the sectorial indices on NSE were in the green with PSU bank, oil & gas and realty shares gaining the most.

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 13:30 IST, the barometer index, the S&P BSE Sensex climbed 2,333.64 points or 3.14% to 76,282.63. The Nifty 50 index soared 697.45 points or 3.1% to 23,228.15.

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 3.57% and the S&P BSE Small-Cap index gained 2.08%.

The market breadth was strong. On the BSE, 2,467 shares rose and 1,432 shares fell. A total of 152 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, 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.

Gainers & Losers:

Power Grid Corporation of India (up 10.21%), Adani Ports and Special Economic Zone (up 9.82%), State Bank of India (up 9.59%), NTPC (up 8.68%) and Shriram Finance (up 7.10%) were major Nifty gainers.

Eicher Motors (down 1.10%), LTIMindtree (down 0.84%), HCL Technologies (down 0.33%) and Asian Paints (down 0.30%) were major Nifty losers.

Eicher Motors declined 1.10%. The vehicles manufacturer�s unlisted subsidiary, VE Commercial Vehicles (VECV) reported 9.7% year over year increase in commercial vehicles (CV) sales to 6,901 units in May 2024.

Adani Ports and Special Economic Zone soared 9.82% after the company said that it has handled approximately 35.8 million metric tonnes (MMT) of cargo volumes in May 2024, which is almost flat on a year-over-year (YoY) basis.

Stocks in Spotlight:

Tata Motors advanced 2.56% after the auto major�s domestic and international vehicle sales for May 2024 stood at Rs 76,766 units, up 2.39% as compared with 74,973 units in May 2023.

Bajaj Auto rallied 3.39% after the company reported a marginal increase in total auto sales to 3,55,323 units in May 2024 as against 3,55,148 units in May 2023.

Ashok Leyland jumped 5.76% after the company�s total vehicle sales jumped 12% to 14,682 units in May 2024 from 13,134 units in May 2023.

Hero MotoCorp rose 0.90%. The company sold 498,123 units of motorcycles and scooters in May 2024, which is lower by 4.11% as compared with sales of 519,474 units recorded in May 2023.

NMDC added 2.84%. 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 11.98% 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.

Global Markets:

European stocks advanced while Most Asian stocks traded higher on Monday as investors anticipated a rate cut in Europe this week, potentially marking the first time the European Central Bank (ECB) eases policy ahead of the U.S. Federal Reserve. The ECB is widely expected to lower rates by 0.25% to 3.75% on Thursday.

Meanwhile, positive data emerged from China, a key driver for regional growth. The Caixin manufacturing Purchasing Managers` Index (PMI) for May came in at 51.7, indicating continued expansion in the sector. This suggests some resilience in the Chinese economy.

US stocks closed mostly positive on Friday, with the S&P 500 recovering from early losses to end the day in the green. The Dow Jones Industrial Average jumped 574.84 points, or 1.5%, to close at 38,686.32. The S&P 500 rose 0.8%, while the Nasdaq Composite slipped less than 0.1%.

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