Bulls rule D-Street! Sensex closes at record high; Nifty ends above 9500

Bulls ran amok on a day which saw expiry of May series’ derivatives contracts. The Sensex soared to fresh record closing high, while the Nifty managed to reclaim its 9500-mark and settled above that milestone.

The Street saw steady gains of about half a percent till post noon, which could have been due to the prevailing bullish sentiment taking over post the market’s subdued performance in the past six trading sessions.

However, this surge intensified later, as the market witnessed a sudden and sharp surge due to heavy buying by investors. Experts believe that the renewed interest could have been on the back of short covering ahead of the expiry as well as FOMC’s minutes of the meeting which hinted at a gradual rate hike based on economic data. Steady earnings momentum as well as better forecast for the monsoon by Skymet, too, boosted stocks.

Back home, midcaps were back in action, after its corrective phase for the past six sessions. The midcap index gained over a percent, snapping its losing streak.

Meanwhile, the rally was also bolstered by private banks as well as PSU lenders; their indices gained nearly 3 percent, while positive momentum in IT, infrastructure and metals also aided the upsurge.

The only segment to sulk were the pharmaceutical companies, which plummeted on the back of negative news flow and weak sectoral outlook. Lupin, which reported dismal March quarter figures, was subject to heavy selling as the stock closed with cuts of 7 percent.

A double whammy for the company were the observations given by the US Food and Drug Administration (FDA) at its Indore plant, which strained the stock. The bearishness spilled over to other pharma stocks such as Cipla, Dr Reddy’s Laboratories and Sun Pharma, collectively bringing down the niche indices on Nifty and Sensex to its 52-week lows.

“An indication of a gradual rate hike in the FOMC minutes gave impetus to the global indices, which instilled energy in the domestic markets. Banks’ swing higher was solid, as traders cut short positions with expectations rising on NPA resolution measures shortly,” Anand James, Chief Market Strategist, Geojit Financial Services said in a statement.

On the stock-specific front, investors reacted to the results of several companies, along with news flow.

Videocon continued with its trend of hitting the lower circuit, with investors looking to dump the stock based on negative news flow. The stock hit 10 percent lower circuit on Thursday after Central Bank of India declared the company as a non-performing asset in the first quarter of FY18. The bank has one of the highest exposures to the consumer durables and oil company at Rs 2,700 crore.

Bharat Financial Inclusion gained around 10 percent after Credit Suisse upgraded the stock to outperform on Thursday and raised its 12-months target price to Rs 800 from Rs 760 earlier post Q4 results. The microfinance lender reported a net loss of Rs 234.92 crore for the quarter ended March 31, 2017, mainly due to write-offs of Rs 334.56 crore.

Dish TV plummeted over 11 percent intraday on Thursday after investors turned cautious on the stock post dismal Q4 numbers. The Direct-to-home operator reported a consolidated net loss of Rs 28.33 crore for the fourth quarter ended March 31, hit by revenue fall.

Shares of Max Financial Services saw volatile movements as the stock lost 2 percent intraday after opening nearly 2 percent higher on the possibility of delay in its merger with HDFC Life. It closed with losses of around a percent.

Investors were spooked by the development of a likely delay in the merger after Attorney General Mukul Rohtagi returned the HDFC-Max Life merger proposal back to the Insurance Regulatory and Development Authority of India without giving any opinion. The insurance regulator had sought AG’s opinion for legal validity of the proposal.

Pharmaceutical stocks bled for the second consecutive session on the back of negative news flow for large-cap companies as well as negative outlook for the sector. Both the pharma indices on Sensex and Nifty plunged to their 52-week lows, eroding a massive chunk of investors’ wealth.

Meanwhile, private banks turned out to be huge contributors, as ICICI Bank and HDFC Bank, among others, ended over 3 percent higher. Investors could have bought into the sector expecting better results from the government’s new NPA resolution decision.

Going forward, the Street would look forward to cues from the results front of several companies. FMCG major ITC will be reporting its numbers along with DLF.

“Consumer goods and agro-based sectors have also started to show strength which is expected to continue, taking cues from IMD’s report on early monsoon,” James’ statement added.