Market ends at all-time high on normal monsoon forecast

Fertiliser, FMCG and telecom counters lead the charge after IMD prediction

SENSEX HITS FRESH INTRA-DAY HIGH OF 30,271.60

STOCK MARKET sentiments were up on Wednesday as forecast of a normal monsoon led to widespread buying, taking benchmarks Sensex and Nifty indices to their all-time closing highs.

The BSE Sensex opened strong and continued its upward journey to hit a fresh intra-day high of 30,271.60 before ending at 30,248.17, up 314.92 points, or 1.05 per cent. The index broke its previous record closing of 30,133.35 reached on April 26. It also surpassed its intra-day peak of 30,184.22 recorded on April 27. The NSE Nifty, after hitting an all-time high of 9,414.75, settled higher by 90.45 points, or 0.97 per cent at 9,407.30. Nifty surpassed its previous record close of 9,359.90 on May 4, as well as the intra-day high of 9,377.10 hit on May 5.

Fertiliser, FMCG and telecom counters led the charge after the Indian Meteorological Department (IMD) said monsoon rainfall will be higher than forecast earlier, which would give a booster dose to the rural economy. “IMD’S latest upgrade on normal monsoon due to ease in El Nino effect has added optimism in the market, taking it to a new high. A good monsoon will raise the prospects of the Indian economy especially for FMCG and consumer durables sector,” said Vinod Nair, Head of Research, Geojit Financial Services.

Pankaj Pandey, Headresearch, ICICI Direct said “One needs to understand that the Indian economy is on a strong footing with relatively strong macroeconomic fundamentals, lower inflation/interest rate regime, possibility of a major reform such as GST and a favourable demography supporting sustainable growth. We believe that earning growth from here on would be the key factor driving the markets.”

The sentiment also got a boost after data showed that foreign funds, which were net sellers on the Indian bourses for the past few sessions, made fresh purchases in Tuesday’s trade, brokers said. FIIS bought shares worth net Rs 332.87 crore on Tuesday, as per provisional figures issued by stock exchanges.shares of RCF, FACT, Madras Fertilizer and Chambal Fertilisers and Chemicals surged by up to to 6.89 per cent. Among BSE’S sectoral indices, telecom stole the show by rising 4.59 per cent, while FMCG, auto and energy gained over a percent. IT and realty were the only laggards. Bharti Airtel was the biggest gainer in the Sensex pack, surging 7.87 per cent to Rs 372.70.

HUL rose by 4.60 per cent, HDFC 3.25 per cent, M&M 2.59 per cent, Reliance 2.17 per cent, Bajaj Auto 1.74 per cent, Axis Bank 1.68 per cent, Maruti 1.53 per cent, Cipla 1.49 per cent and Tata Motors 1.25 per cent.

Jayant Manglik, President, Religare Securities, said, “IMD’S latest update on monsoon triggered upbeat start which further strengthened with buying interest in index majors. Mostly, sectoral indices contributed to the rally. FMCG, media and auto topped the gainers list. Midcap and smallcap pack also witnessed renewed buying after a series of dull sessions.”

“A good monsoon will boost consumption and investment. It’s good forthe economy,” said a dealer. The monsoon this year could be ‘normal’ and bring 100 per cent rainfall instead of 96 per cent as predicted earlier, the IMD said.