Mumbai: The Sensex and Nifty were buoyant on Monday on strongly positive global cues, higher PMI numbers and a hope that RBI would not raise its policy rates in its credit policy announcement on Tuesday.
This will be RBI governor Raghuram Rajan’s first policy announcement since the Narendra Modi government has taken over. There is a lot of expectation that he would maintain a status quo to give the new government a chance to take fiscal measures to curb inflation as also steps to improve the supple side constraints.
The Chinese PMI data expanded at the fastest pace in five months, rose to 50.8 in May from 50.4 in the previous month, giving a boost to Asian and European stocks.
A PMI figure above 50 indicates growth while a lower reading means contraction.
The Sensex closed up 467.51 points at 24,684.85 while the Nifty soared 132.55 points to close at 7,362.50.
Sanjeev Zarbade, vice-president, private client group research, Kotak Securities said global cues were positive following record highs for the S&P 500 and the Dow Jones Industrial Average last week. Data released showed China’s factory activity also expanded at its fastest pace in five months in May.
“Markets would now look forward to the monetary policy Tuesday. In addition to this, progress of monsoons and later on Union Budget would be the important events in the near term,” he said.
Alex Mathews, head research, Geojit BNP Paribas Financial Services Ltd attributed the rally on Monday to FII activity that pepped up on Friday as they bought equities worth Rs 2,977.62 crore.
The HSBC manufacturing purchasing managers’ index stood at 51.4 for the month under review from 51.3 in the previous month. The new orders sub index which includes orders from both domestic and aboard rose to a three month high kept the market buoyant, he said.
Capital goods and banking (ahead of credit policy) were the major sectoral gainers with sales of shares worth 4.93 per cent and 3.28 per cent respectively and on the losers edge were health care and FMCG, which closed down around 0.92 per cent and 0.82 per cent.
L&T was the top gainer 6.23 per cent on the Sensex on the back of better than expected Q4 results while the oil and gas sector were robust on the diesel hike.
