SENSEX RALLIES 2507 PTS, NIFTY ENDS ABOVE 23,260 ON EXIT POLL CLUES, VIX COOLS TO 20.94

Domestic stocks soared today on exit poll euphoria! Buoyed by exit poll predictions of a strong BJP win, investors piled into Indian stocks, sending the Nifty50 above 23,250. PSU banks and energy stocks led the charge, with PSUs particularly happy about the potential for continued reforms. How long this rally lasts depends on the actual election results. A big win could trigger a flood of sidelined cash back into the market, fueled by optimism. In the coming weeks, all eyes will be on the 100 days measures list and final budget for further cues.

After the Lok Sabha Election 2024 concluded on Saturday, 1 June 2024, most exit polls predicted that the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) is expected to win over 350 of the 543 seats in the Lok Sabha. Three exit polls suggested that the NDA might make history by surpassing the 400-seat milestone. The final results of the Lok Sabha Election are scheduled to be announced on Tuesday, 4 June 2024.

The S&P BSE Sensex galloped 2,507.47 points or 3.39% to 76,468.78. The Nifty 50 index soared 733.20 points or 3.25% to 23,263.90.

Reliance Industries soared 5.65% to hit a record high of Rs 3029.90. State Bank of India climbed 9.12% to hit a record high of Rs 912.10.

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 2.05%.

The market breadth was positive. On the BSE, 2346 shares rose and 1615 shares fell. A total of 154 shares were unchanged.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, dropped 14.89% to 20.94.

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.

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, India`s Index of Eight Core Industries (ICI) jumped 6.2% (provisional) in April 2024 compared to last year. This positive growth was driven by strong performances in electricity, natural gas, coal, steel, and other key sectors. This upswing follows a revised January growth of 4.1% and puts the year-to-date increase at an impressive 7.6% (provisional).

Further, India`s forex reserves dipped $2.027 billion to $646.67 billion for the week ending May 24th, according to the RBI. All reserve components declined: foreign currency assets by $1.51 billion, gold by $482 million, and SDRs by $33 million.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper shed 0.49% to 6.952 as compared with previous close 6.953.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 83.1450, compared with its close of 83.4200 during the previous trading session.

MCX Gold futures for 5 June 2024 settlement was down 0.67% to Rs 71,403.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.05% to 104.73.

The United States 10-year bond yield slipped 0.89% to 4.472.

In the commodities market, Brent crude for August 2024 settlement fell 17 cents or 0.21% to $80.94 a barrel.

Global Markets:

Shares in Europe and Asia advanced 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%.

IPO Update:

The initial public offer (IPO) of Kronox Lab Sciences received 7,40,66,630 bids for shares as against 66,99,000 shares on offer. The issue was subscribed 11.06 times.

The issue opened for bidding on 3 June 2024 and it will close on 5 June 2024. The price band of the IPO is fixed between Rs 129 to Rs 136 per share. An investor can bid for a minimum of 110 equity shares and in multiples thereof.

Stocks in Spotlight:

The Nifty PSU Bank index soared 8.40% to 8,006.15. Bank of Baroda (up 12.08%), Central Bank of India (up 11.83%), State Bank of India (up 9.48%), Canara Bank (up 9.24%) and UCO Bank (up 8.60%) advanced.

Adani Ports and Special Economic Zone climbed 10.25% 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.

Angel One rallied 4.68% after the company said that its wholly owned subsidiary, Angel One Wealth has incorporated a wholly owned subsidiary, namely, Angel One Investment Services, on 30 May 2024.

REC surged 12.44% 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.

Bondada Engineering hit an upper circuit of 5% after the company announced that its board is scheduled to meet on 5 June, 2024 to consider raising funds via private placement basis.

Ashoka Buildcon rallied 6.57% 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.

InterGlobe Aviation added 2.90% after the media reports suggested that the company has agreed on a codeshare partnership with Japan Airlines (JAL) that will greatly benefit customers by providing more travel options between Japan and India.

NMDC advanced 2.92%. 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.

Ganesha Ecosphere rose 1.64% after the company said that its board has granted approval for making a strategic investment of Rs 16 crore in the equity share capital of RACE Eco Chain (RACE).

May Auto Sales:

Maruti Suzuki India rose 0.61%. The company announced that its total sales declined 1.98% year on year to 1,74,551 units in May 2024 as against 1,78,083 units sold in May 2023.

Mahindra & Mahindra (M&M) rallied 5.17% after the company announced that its overall auto sales for the month of May 2024 stood at 71,682 vehicles, registering a growth of 16.71% as against 61,415 vehicles sold in May 2023.

Tata Motors advanced 3% 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 gained 2.75% 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 5.54% 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 0.79%. 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.

Eicher Motors fell 1.19%. The vehicles manufacturer�s unlisted subsidiary, VE Commercial Vehicles (VECV) reported 9.7% increase year-over-year in commercial vehicles (CV) sales to 6,901 units in May 2024.

TVS Motor Company rose 3.28%. The company`s total sales jumped 12% to 369,914 units in May 2024 as compared with 330,609 units in May 2023.

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