Sensex hits seven-month high on positive GDP data

The S&P BSE Sensex ended up 46 points at 26,714 and the Nifty50 settled 20 points higher at 8,180.

Benchmark indices ended marginally higher amid profit booking at levels and weak global cues.

However, better than expected GDP data, FY16 fiscal deficit data which met expectations and good PMI data cheered investors’ sentiments.

The S&P BSE Sensex ended up 46 points at 26,714 and the Nifty50 settled 20 points higher at 8,180.

In the broader market, the BSE Midcap index slipped 0.3% while BSE Smallcap index up 0.2%.

Rohit Gadia, Founder & CEO, CapitalVia Global Research says, "Nifty in its daily chart has formed a Doji candlestick pattern. Important support is at 8150 and a move below this level trader should book profit from the existing long position. In such scenario trader is also advise to re-enter into the market again around 8000. As the medium term up trend is likely to resume around this level and it is very unlikely that market will drop significantly below this level. Especially at the present technical setup of the market which is extremely bullish. After a strong vertical move in last couple of trading session a consolidation or a short term correction is actually healthy for long term trend to strengthen". 

World shares started the new month on the back foot on Wednesday as sliding oil prices hurt energy-related shares and a raft of disappointing economic data dampened demand for riskier assets.

Oil prices fell over 1% as production from major Middle East exporters was expected to remain high.

Brent crude futures traded down 60 cents at $49.29 per barrel, with US crude down 51 cents at $48.59 a barrel.

MSCI world equity index, which tracks shares in 45 countries, shed 0.1 percent. Asian-Pacific shares outside Japan also shed 0.1%, while the Europe 600 index also fell 0.5%.

Shanghai finished in negative territory after rallying on Tuesday on expectations MSCI could add China's mainland stocks to its emerging market benchmark for the first time.

MACRO-ECONOMIC DATA

The country’s fiscal deficit for 2015-16 was Rs 5.32 lakh crore, about 99.5% of the government’s revised target of Rs 5.35 lakh crore, compared with 99.6% for the same period a year before, official data showed on Tuesday.

India’s gross domestic product (GDP) grew 7.6% in 2015-16, up from 7.2% a year ago. 

Growth in the eight core sectors jumped to 8.5% in April, due to a sharp pick-up in refinery products and a commensurate rise in electricity generation.

The Nikkei/Markit India Manufacturing Purchasing Managers' Index (PMI) - a composite indicator of manufacturing sector performance, stood at 50.7 in May as against 50.5 in April.

TAXATION

A slew of additional taxes announced in the Budget, including agriculture cess on services, equalisation levy, higher securities transaction tax on sale of options and tax collection at source on cash purchases for goods and services over Rs 2 lakh, will kick in from Wednesday.

The 0.5% Krishi Kalyan Cess (KKC) on all services increases the total tax chargeable on services to 15 per cent, making it expensive to dine out or travel.

STOCKS IN ACTION

Shares of Asian Paints rose 3% to a record high of Rs 1,017. Adani Port was the top Sensex gainer, up 5%.

Axis Bank came off its early highs and ended up 0.6% lower after Reserve Bank allowed Axis Bank to raise foreign shareholding to up to 62%, from the earlier limit of 49%. 

IT exporters staged a recovery after a correction in the previous session. TCS, Infosys and Wipro were up 0.6%-2% each.

Wipro, India's third largest software exporter, said it would raise salaries by an average 9.5 per cent for its Indian employees effective June, bettering Infosys and falling a bit short of Tata Consultancy Services.

Maruti Suzuki pared early gains and ended marginally lower. The car major maintained a double digit sales growth of 10% in the domestic market for May in spite of a production loss of approximately 7,500 units. Exports, however, declined 21% to 9,872 vehicles in May.

SBI, ICICI Bank and HDFC Bank slipped 1%-4%. According to Reserve Bank of India data, during this period the bank credit of PSBs - excluding State Bank of India and its associates - grew by a mere 1.4% compared with 7.8% in the corresponding period in FY15.

HDFC Bank, the country’s second-largest private sector lender, SmartBuy aims to double the spends on its marketplace. The stock slipped by 0.5%.

Reliance Communications was up almost 5% after the foreign institutional investors (FII) bought nearly 1% stake in Anil Ambani Group telecom company for about Rs 87 crore through open market. 

Among other shares, Gokaldas Exports rallied 17% after the company reported a standalone operating profit of Rs 39 crore for the quarter ended March 2016 (Q4FY16).

V-Guard Industries ended higher by 6% on the BSE on the back of heavy volumes.

Shares of aviation companies ended lower after oil marketing companies announced hike in aviation turbine fuel by over 9% from June 01, 2016. Jet Airways and Indigo ended 2%-4% lower.

PVR gained 2%, extending its 5% gain in past two trading sessions, after reporting lower consolidated net loss at Rs 10 crore for the fourth quarter ended March 31, 2016 (Q4FY16) compared to the same quarter last fiscal.

Ashok Leyland slipped 4% lower at Rs 105, falling 6.2% from intra-day high on the BSE, after the commercial vehicles major reported single digit growth in total sales for the month of May 2016.

SML Isuzu moved higher by 6.5% on the BSE after the company reported 37% year on year (YOY) growth in sales to 1,929 units in May 2016.