The key equity indices extended gains and hit the day’s in mid-morning trade. The Nifty traded above the 22,400 level. Auto shares advanced after declining in the past trading session.
At 11:30 IST, the barometer index, the S&P BSE Sensex was surged 1,623.46 points or 2.26% to 73,708.60. The Nifty 50 index jumped 532.20 points or 2.43% to 22,416.70.
In the broader market, The S&P BSE Mid-Cap index gained 3.22% and the S&P BSE Small-Cap index rallied 3.22%.
The market breadth was positive. On the BSE, 2,138 shares rose and 1,462 shares fell. A total of 131 shares were unchanged.
The NSE’s India VIX, a gauge of the market’s expectation of volatility over the near term, slumped 28.61% to 19.10.
Economy:
The seasonally adjusted HSBC India Services Business Activity Index remained comfortably above the neutral mark of 50.0 in May, highlighting a sharp upturn in output. That said, the headline figure fell from 60.8 in April to 60.2, its lowest mark since last December.
Growth was reportedly supported by rising sales, productivity gains and demand strength. The upturn was somewhat hampered by competitive and price pressures.
May data showed that robust increases in new business intakes continued to underpin output growth across India’s service economy. Rates of expansion eased to the slowest in the calendar year-to-date, however, amid fierce competition, price pressures and a severe heatwave. Both input costs and output charges rose to greater extents.
Concurrently, new orders from international markets expanded at the steepest pace since the inception of this series nearly ten years ago. Another positive takeaway was a rebound in business confidence to its strongest in eight months.
Like for output, new orders rose at a substantial pace that was nonetheless the slowest in the calendar year-to-date. One area that improved substantially in May was new export orders, with growth climbing to the fastest seen since the inception of the series in September 2014.
Indian private sector output rose sharply halfway through the first quarter, despite another loss of growth momentum. The HSBC India Composite Output Index slipped from 61.5 in April to 60.5 in May, highlighting the slowest rate of expansion since last December. There were softer increases in both factory production and services activity.
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