Indian equities close flat, but indices touch new highs

Mumbai, June 5 (IANS) Trading on a sluggish note, the Indian equity markets on Monday closed flat and yet were lifted marginally to a new high for the second consecutive session, both intra-day and at the end of the day.

According to market observers, positive macro-economic data, coupled with inflow of foreign funds and healthy buying in consumer durables, capital goods and banking stocks kept investors' sentiments upbeat.

However, caution prevailed ahead of the Reserve Bank of India's two-day monetary policy review that begins on Tuesday.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) closed at a new high of 9,675.10 points -- up 21.60 points or 0.22 per cent -- after touching a record intra-day high of 9,687.20 points.

The 30-scrip Sensitive Index (Sensex) of the BSE, closed at a fresh high of 31,309.49 points -- up 36.20 points or 0.12 per cent, from it's previous close at 31,273.29 points.

It touched a new high of 31,355.42 points intra-day.

The BSE market breadth was bullish -- with 1,428 advances and 1,248 declines.

The broader market indices outperformed the Sensex, with the S&P BSE mid-cap index up by 0.15 per cent and the small-cap index by 0.65 per cent.

"Markets surged higher on Monday to new life highs. Interest rate sensitive realty stocks rose ahead of the RBI's monetary policy review this week," Deepak Jasani, Head - Retail Research, HDFC Securities, told IANS.

"Key indices gained for the second day in a row today. Market sentiment was boosted after a private business survey showed activity in India's services industry accelerated in May."

The seasonally adjusted Nikkei India Services PMI Business Activity Index released during market hours showed that India's service sector recovered in May due to a faster pace of new business generation and registered a higher rate of expansion at 52.2, up from April's 50.2.

Anand James, Chief Market Strategist, Geojit Financial Services, said: "Banks hauled indices higher, helped by increased optimism over NPA (non-performing assets) resolution, while GST (Goods and Services Tax) rates announced over the weekend were also instrumental in fuelling a few stock rallies in the mid-cap space."

"However, global cues were mixed, following soft NFP figure as well as upcoming UK elections," James added.

On the currency front, the rupee strengthened by eight paise to 64.36 per US dollar from its previous close of 64.44.

In investments, provisional data with the exchanges showed that foreign institutional investors (FIIs) purchased stocks worth Rs 476.64 crore, while domestic institutional investors (DIIs) bought scrips worth Rs 13.62 crore.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, stock specific movement was seen in the market post second half of the trading session.

"Jewellery stocks witnessed huge volume and price appreciation after tax rate on jewellery was decided at three per cent lower than expectation of five per cent. Consumer durables sector was the most positive and ended with gains of 5.81 per cent," Desai told IANS.

"The sectors which were laggards were metal and healthcare. The market is in wait-and-watch mode. Expectations of change in credit policy on 7th June is low."

Sector-wise, the S&P consumer durables index surged by 909.66 points, the capital goods index rose by 141.59 points, and the banking index was up by 93.92 points.

On the other hand, the S&P BSE metal index fell by 61.89 points, the healthcare index by 7.59 points, and the utilities index was down by 5.12 points.

Major Sensex gainers on Monday were: Bajaj Auto, up 1.92 per cent at Rs 2,900.70; Tata Consultancy Services (TCS), up 1.53 per cent at Rs 2,601.05; Larsen and Toubro (LT), up 1.15 per cent at Rs 1,804.65; Axis Bank, up 1.02 per cent at Rs 513.05; and Adani Ports, up 1.02 per cent at Rs 360.90.

Major Sensex losers were: Coal India, down 1.67 per cent at Rs 264.30; Gail, down 1.09 per cent at Rs 397.90; Infosys, down 0.95 per cent at Rs 960.20; Dr. Reddy's Lab, down 0.72 per cent at Rs 2,534.95; and Lupin, down 0.56 per cent at Rs 1,158.60.