Sensex Finally Conquers Mount 40,0003 min read . Updated: 03 Jun 2019, 03:49 PM IST
- The Nifty also closed above 12,000 for the first time
- Auto, IT, FMCG and metal stocks saw strong buying
Indian markets rose to record highs today, with both Sensex and Nifty hitting new milestones. The Sensex ended 553 points higher at 40,267, a record closing high. Over the past two weeks, Sensex had hit 40,000 intraday but could not manage to end above that level. The Sensex also hit a new intraday high of 40,308 today. Similarly, Nifty also took out the 12,000 level by settling at 12,088, up 1.4%. Intraday, the Nifty also set a new milestone of 12,103.
India's benchmark 10-year bond yield today dropped below 7% while the rupee also gained as a sharp decline in GDP growth in the March quarter firmed expectations for at least a quarter-point rate cut on Thursday.
India's economy grew at its slowest pace in more than four years in the January-March period, lagging China's growth pace for the first time in nearly two years, raising the chances the central bank will cut rates for a third straight meeting.
"What is more important for markets is monetary policy committee's guidance that the actual rate action," said Lakshmi Iyer, chief investment officer (debt) at Kotak Mahindra Asset Management company.
The continued drop in global crude oil prices amid concerns about a global slowdown as trade war tensions heat up, also aided market sentiment.
Many analysts also expect the government to take measures to boost economic growth. The Budget session of Parliament starts from June 17.
Auto stocks were in the limelight today with the Nifty Auto index rising 2%. Hero MotoCorp shares jumped 6% after the two-wheeler maker posted a sequential rise in monthly unit sales. Bajaj Auto jumped 4% after reporting higher monthly sales as compared to the same month of the previous year.
"Auto stocks are close to the bottom of their cycle and any turnaround in sales would give an upward thrust to the prices," said Umesh Mehta, head of research at Samco Securities.
Asian Paints, IndusInd Bank, HUL, Coal India, Maruti Suzuki, RIL, HDFC and TCS were among the other top gainers.
Harsha Upadhyaya, chief investment officer (equity) at Kotak Mahindra Asset Management, said a clearer-than-expected mandate might support the market in the near term, especially on capex and infrastructure-linked sectors.
The 50-share index has hit all time high touching 12,042.65. Nifty is up 119.85 points, or 1.01%.
TVS Motor today posted a marginal decline in total sales at 3,07,106 units in May. The company sold 3,09,865 units in the same month last year. Total two-wheeler sales during the month declined 1.27% to 2,94,326 units as against 2,98,135 units in May 2018. Shares were up 4% in afternoon trade.
Lakshmi Iyer, chief investment officer (debt) at Kotak Mahindra Asset Management Company, said: "Given the global as also domestic scenario, the RBI's monetary policy committee may well choose to gratify the markets with a benchmark rate cut. What is more important for markets is the MPC guidance that the actual rate action."
Shares of Bajaj Auto were up 4% in early noon trade after the company reported higher sales for May. Bajaj Auto reported a 3% year-on-year increase in sales to 419,235 units for the month.
India's manufacturing sector expanded at its quickest pace in three months in May on improved output and new orders, according to a private business survey which also showed a pick up in hiring. The survey found increased optimism about manufacturing activity over the coming year, probably helped as Prime Minister Narendra Modi scored a dramatic election victory on a mandate of business-friendly policies and a tough stand on national security.
Ashish Nanda, EVP and Business Head for PCG, Commodities and Currency Business at Kotak Securities, says from the medium term perspective he likes cement, capital goods and auto companies. Nifty has support at 11,600-11,750, he adds.
Shares of Asian Paints and Hero MotoCorp were up over 2% in early trade. Hero MotoCorp recorded a sequential increase in May sales compared to the previous month (April 2019).
The yield on 10-year government bond slipped below 7% first time since November 2017, as falling crude oil and slowing economic growth boosted speculations of monetary easing by the Reserve Bank of India (RBI) in its next bi-monthly policy.
Yield on India’s 10-year benchmark bonds fell 8 basis points at 9.10 am to 6.958%, the lowest since 21 November 2017.
The country's largest two-wheeler maker Hero MotoCorp on Sunday reported sales of 652,028 units of motorcycles and scooters in the month of May 2019. The company had sold 7,06,365 units in the corresponding month last year. The company however recorded a sequential increase in sales compared to the previous month (April 2019) when it sold 574,366 units of two-wheelers. Last month, Hero MotoCorp launched three new motorcycles -- XPulse 200, XPulse 200T and Xtreme 200S. Apart from these, it had also launched two scooters -- Maestro Edge 125 and Pleasure+ 110.
The country's largest carmaker Maruti Suzuki India on Saturday reported a 22% decline in sales at 1,34,641 units in May. The company had sold 1,72,512 units in May 2018, Maruti Suzuki India (MSI) said in a statement. Domestic sales declined by 23.1% to 1,25,552 units as against 1,63,200 units in the year ago month, it added.