Indian equity benchmarks, recovering entire early losses, staged a smart comeback in the last leg of trade on Thursday and ended the session at their fresh record closing high levels, on hopes of BJP-led NDA winning the general elections. Earlier, key benchmark indices alternately swung between positive and negative terrain as investors remained cautious ahead of final results of elections on May 16, while markets seem to have more or less priced in the exit poll prediction of a majority for the BJP-led National Democratic Alliance (NDA) in the Lok Sabha.

But, volatility ruled the roost in dying hours of trade with the frontline gauges witnessing a sharp jump as sentiments remained up-beat after the annual rate of inflation, based on monthly WPI, easing at 5.20% in month of April, 2014, as compared to 5.70% for the March and 4.77% during the corresponding month of the previous year, as all three major components of the index – food, fuel and manufactured goods – recorded moderation in prices. However, February inflation figures were revised upwards to 5.03% against 4.68% earlier. Some support also came in to the markets after India Meteorological Department (IMD) has predicted that the conditions for the advancement of South west monsoon are favourable and it will be hitting Andamans much earlier than expected.

On the global front, Asian markets reversed most of the early losses and ended mostly in the green. Though, Japanese Nikkei witnessed profit taking while a stronger yen weighed on market sentiment. European shares were trading marginally lower in early deals with investors shrugging off Germany’s robust economic growth during the first quarter.

Back home, buying which emerged in late trade mainly helped the domestic equity markets to re-conquer their crucial 7,100 (Nifty) and 23,900 (Sensex) bastions. Some support came in from currency front, where the rupee firmed up against the dollar and was quoting at Rs 59.30 at the time of equity markets closing as compared to Tuesday’s close of Rs 59.68 on the back of strong inflows in the domestic equity market.

Meanwhile, recovery in banking counter too supported the sentiments, stocks like HDFC Bank, Axis Bank, Kotak Mahindra Bank, Yes Bank etc. edged higher after the RBI panel had recommended a one-licence policy for all banks, irrespective of the ownership pattern. Power stocks too traded with traction as the Centre has announced a nine-member panel, which will identify more blocks, in addition to already selected 54 mines, for sale through competitive bidding to expedite coal auction process. Additionally, tyre stocks too remained on buyers’ radar after Apollo Tyres reported better-than-expected Q4 numbers. The company’s fourth quarter consolidated net profit doubled to Rs 281.6 crore from Rs 141.7 crore in same quarter last year on strong growth in Europe business and strong operational performance.

The NSE’s 50-share broadly followed index Nifty surged by over twenty points to end comfortably above its psychological 7,100 support level, while Bombay Stock Exchange’s Sensitive Index — Sensex surged over ninety points to surpass the psychological 23,900 mark. However, broader markets struggled to get any traction during the session and ended the trade with a cut of around a percent. The market breadth remained in favour of decliners, as there were 1,156 shares on the gaining side against 1,743 shares on the losing side while 136 shares remain unchanged.

Finally, the BSE Sensex gained 90.48 points or 0.38%, to 23905.60, while the CNX Nifty was up by 14.40 points or 0.20%, to 7,123.15.

The BSE Sensex touched a high and a low of 23971.78 and 23742.75, respectively. The BSE Mid cap index was down by 0.83%, while the Small cap index lost 0.86%.

The top gainers on the Sensex were Tata Power up by 3.07%, NTPC up by 2.95%, ONGC up by 2.56%, Gail India up by 2.16% and Hindustan Unilever up by 2.08%. While Bajaj Auto down by 4.28%, Hindalco Inds down by 1.98%, SSLT down by 1.88%, Wipro down by 1.50% and Dr Reddys Lab down by 1.46% were the top losers in the index.

On the BSE Sectoral front, Consumer Durables up by 1.52%, Power up by 0.97%, Oil & Gas up by 0.95%, PSU up by 0.42% and FMCG up by 0.29% were the top gainers, while Realty down by 1.11%, Capital Goods down by 0.90%, Metal down by 0.71%, Teck down by 0.49% and Auto down by 0.46% were the top losers in the space.

Meanwhile, in order to promote the growth and global competitiveness of the IT industry, the National Association of Software and Services Companies (NASSCOM) has prepared a five-point agenda for the new Government formed on May 16. The NASSCOM’ s report suggested five measures including enabling innovation and support entrepreneurship, making the domestic investment easier and simpler, building new markets to promote the growth and global competitiveness of the IT industry, expanding existing markets and focusing on skill development.

The NASSCOM President R Chandrashekhar said that new government can use the strength of the Indian IT industry to achieve the development agenda within the country. Indian IT sector has grown in size and now has a global footprint and there is an opportunity for new government to expand sector’s global footprint, which in turn will also contribute to the domestic transformation and developmental agenda. He added that the new Government needs to ensure that the rules for opening and operating the small business are far simpler than earlier and should take measures for funding the start-ups, and connecting them with academics and research and development.

Information Technology (IT) has emerged as an industry that has not only transformed India’s image on the global platform, but also fuelled economic growth. Present, market size of Indian IT industry stand at around $50 billion and its contribution to Indian GDP has increased from just 1.2 percent in 90’s to around 8 percent in 2013. India is the only country that covers a wide range of segments of this industry such as IT Services, BPM, Engineering & R&D, Internet & Mobility and Software Products. Currently, the US, UK and other European markets contribute to around 90% of the total business of Indian IT sector.

The CNX Nifty touched a high and low of 7,152.55 and 7,082.55 respectively.

The top gainers of the Nifty were ONGC up by 3.36%, Tata Power Company up by 2.65%, GAIL (India) up by 2.59%, Power Grid Corporation of India up by 2.54% and NTPC up by 2.39%. On the other hand, Asian Paints down by 5.73%, Bajaj Auto down by 4.30%, Bank of Baroda down by 3.88%, NMDC down by 3.33% and United Spirits down by 2.43% were the top losers.

Most of the European markets were trading in red, France’s CAC 40 was down by 0.24% and Germany’s DAX was down by 0.04% while, United Kingdom’s FTSE 100 was up by 0.05%.

Asian Indices

Last Trade

Change in Points

Change in %

Shanghai Composite

2024.97

-22.94

-1.12

Hang Seng

22730.86

148.09

0.66

Jakarta Composite

KLSE Composite

1879.83

0.63

0.03

Nikkei 225

14298.21

-107.55

-0.75

Straits Times

 3272.49

13.40

0.41

KOSPI Composite

2010.20

-0.63

-0.03

Taiwan Weighted

8880.65

5.49

0.06