Fag-end buying lifts markets higher; Nifty settles above 22,400 mark

In a highly volatile session, Indian equity benchmarks fluctuated between gains and losses and finally saw a sharp rebound in fag-end on Thursday, led by gains in Capital Goods, Industrials and Consumer Durables stocks. Trading was volatile due to expiry of weekly index options on the NSE. Markets made an optimistic start as traders took support with report that India's monsoon is forecast to hit the Kerala coast in the southwest on May 31, offering relief to farmers after below average rainfall last year. The monsoon, the lifeblood of the country's $3.5 trillion economy, delivers nearly 70% of the rain that India needs to water farms and recharge reservoirs and aquifers. Nearly half of India's farmland, without any irrigation cover, depends on the annual June-September rains to grow a number of crops. However, the initial gains diminished quickly and markets witnessed sharp fluctuations on both sides as some cautiousness prevailed due to uncertainty surrounding the general election results. Some pessimism also came as the provisional data showed that foreign portfolio investors (FPIs) sold shares worth Rs 2,832.83 crore in the Indian equity market on May 15, 2024. So far in May, the FIIs have been aggressive sellers and reportedly build high short positions in the derivatives market. 

However, widespread buying in the closing hour of session saw key indices notch up significant gains. Traders found solace with the National Sample Survey Office (NSSO) report showing that the unemployment rate for people aged 15 years and above in urban areas declined to 6.7 per cent in the January-March period from 6.8 per cent a year ago. Traders also took a note of report by the Federation of All India Farmer Associations (FAIFA) stating that the number of startups in agriculture and allied sectors has risen to over 7,000 in the last nine years due to a conducive business environment and government support. It said before 2014-15, there were less than 50 startups in agriculture and allied sectors. 

On the global front, European markets were trading lower as investors awaited comments from Federal Reserve officials for additional clues on the rate outlook. Asian markets settled higher on Thursday after Wall Street's three major indexes notched record closes overnight on optimism that inflation is heading back in the right direction and that there will be two interest rate cuts by the U.S. Federal Reserve in 2024. 

Finally, the BSE Sensex rose 676.69 points or 0.93% to 73,663.72, and the CNX Nifty was up by 203.30 points or 0.92% points to 22,403.85. 

The BSE Sensex touched high and low of 73,749.47 and 72,529.97 respectively. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.07%, while Small cap index was up by 0.85%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.05%, Industrials up by 1.99%, Consumer Durables up by 1.90%, TECK up by 1.66% and Realty up by 1.59%, while Utilities down by 0.03% was the lone losing index on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.05%, Tech Mahindra up by 2.66%, Bharti Airtel up by 2.53%, Infosys up by 2.26% and Titan Company up by 2.17%. On the flip side, Maruti Suzuki down by 2.16%, Tata Motors down by 1.15%, SBI down by 1.04%, Power Grid Corporation down by 0.78% and Indusind Bank down by 0.56% were the top losers.

Meanwhile, the Federation of All India Farmer Associations (FAIFA) in its report titled 'Transformation of India's Agriculture' has said that the number of startups in agriculture and allied sectors has risen to over 7,000 in the last nine years due to a conducive business environment and government support. Before 2014-15, there were less than 50 startups in agriculture and allied sectors. 

According to the report, the Department of Agriculture & Farmers' Welfare (DA&FW) is implementing the 'Innovation and Agri-Entrepreneurship Development' programme under Rashtriya Krishi Vikas Yojana (RKVY) from 2018-19 to promote innovation and agri-entrepreneurship by providing financial support and nurturing an incubation ecosystem. Five Knowledge Partners (KPs) and 24 RKVY- Agribusiness Incubators (R-ABIs) have been appointed by the Department for incubation of startups and implementation of this programme across the country during 2018-19, which is sufficient to cater to current requirements. The report commended the government's decade-long efforts, acknowledging a comprehensive approach that has borne fruit. From initiatives supporting farmers' income, agricultural insurance schemes and expanded irrigation coverage to promoting organic farming, empowering women farmers, bolstering infrastructure and digitising services, the government has embraced a holistic strategy in championing the cause of the farmers.

It also stated that key policy initiatives like the Pradhan Mantri Kisan Maandhan Yojana (PM-KMY), Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) and Pradhan Mantri Fasal Bima Yojana (PMFBY) have played pivotal roles in extending financial and income support to farmers. The comprehensive crop insurance policy serves as a vital shield for farmers, offering protection against unforeseeable natural calamities thereby safeguarding their livelihoods and preventing financial ruin.

The CNX Nifty traded in a range of 22,432.25 and 22,054.55. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.98%, Tata Consumer Product up by 2.76%, Bharti Airtel up by 2.60%, LTIMindtree up by 2.47% and Tech Mahindra up by 2.31%. On the flip side, Maruti Suzuki down by 2.15%, SBI down by 0.98%, Tata Motors down by 0.86%, Power Grid Corp down by 0.81% and BPCL down by 0.81% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 23.55 points or 0.28% to 8,422.25, France’s CAC fell 35.85 points or 0.44% to 8,204.14 and Germany’s DAX lost 37.86 points or 0.2% to 18,831.50.

Asian markets settled higher on Thursday after Wall Street's record gains overnight with optimism that US inflation is heading back in the right direction and that there will be two interest rate cuts by the US Federal Reserve this year. Data showed that retail sales in the US remained steady in April, while consumer prices rose less than expected and the core CPI slowed. Japanese shares rose as weak GDP data for the January-March quarter fuelled fresh doubts over the timing of BOJ rate hikes. Moreover, Chinese shares gained marginally after reports of government plans to buy unsold homes to save property market.