Markets end at record highs

With global markets pushing ahead, enthused by strengthening US jobs market, and also due to prospects of European rate hike, Indian markets also continued the march ahead.

The benchmark indices ended at record highs on Friday, tracking upbeat trend in global markets, while back home hopes of good southwest monsoon rains also lifted sentiment.

The S&P BSE Sensex ended at 31,273, up 135 points, while the broader Nifty50 closed at 9,653, up 37 points.

In intraday trade, the 30-share Sensex gained as much as 195 points to touch a new high of 31,332, surpassing the previous milestone of 31,220 hit on May 29, while the broader Nifty50 rose as much as 16 points to reach a fresh high of 9,673, scaling last peak of 9,637 hit on May 29.

The broader market outperformed with the S&P BSE Midcap and the S&P BSE Smallcap indices adding 0.7% and 0.5%, respectively.

The breadth, indicating the overall health of the market, was strong. On the BSE, 1,449 shares rose and 1,237 shares declined. A total of 164 shares were unchanged.

"With global markets pushing ahead, enthused by strengthening US jobs market, and also due to prospects of European rate hike, Indian markets also continued the march ahead. Pharma, one of the main laggards during this year’s rally, also swung higher on FDA positivity.

US non-farm payrolls data later in the day would be watched, but all eyes are now on RBI rate decision next week, especially with soft GDP numbers raising the decibel for rate cut calls,” said Anand James, Chief Market Strategist, Geojit Financial Services.

Sectors and stocks

The Nifty Pharma index (up 1.6%), the top sectoral gainer, advanced for the fourth consecutive session, led by gains in Cadila Healthcare, Cipla, Divi's Lab, Aurobindo Pharma and Lupin, which rallied in the range of 2-4% on the NSE.

The Nifty Auto Index rose to a record level, rising as much as 0.93% to 10,992.70.

Hero MotoCorp hit a new high of Rs 3,849, up 3% at Rs 3,840 after the company reported 8.7% growth in sales at 633,884 units in May. The country's largest two-wheeler maker had sold 583,117 units in May 2016. The stock was the top Sensex gainer.

Bharti Airtel climbed as much as 3.9% on receiving approval from the capital markets regulator Sebi and stock exchanges for its merger with Telenor India. The stock settled at Rs 371, up 1%.

TVS Motor rose as much as 5.8% to an all-time high after posting a 16% rise in total sales for May on Thursday, while Hero MotoCorp also climbed 3.1% to hit a record high on strong two-wheeler sales in May. The stock ended flat at Rs 538.

GMR Infrastructure gained over 17.4% to Rs 17.65 in intraday trade after it announced a significant reduction in debt and turned profitable in the March quarter. The stock finished 13% higher at Rs 17.

Strong US job growth expected in May

US job growth likely remained strong in May, a further sign of an acceleration in economic activity that would effectively seal the case for an interest rate increase this month despite sluggish wage gains.

Non-farm payrolls probably increased by 185,000 jobs last month, according to a Reuters survey of economists, after surging 211,000 in April. May's projected increase would be in line with this year's 185,000 average monthly job growth.

The unemployment rate is forecast unchanged at a 10-year low of 4.4%. It has dropped four-tenths of a percentage point this year. The Labor Department will release its closely watched employment report on Friday, less than two weeks before the Federal Reserve's June 13-14 policy meeting.

Global markets

European markets opened higher. The pan-European Stoxx 600 was 0.6% higher with most sectors moving into positive territory. The UK's FTSE 100 hit a fresh record high as markets opened.

Asian markets also rose to their best levels in more than two years as positive data on US manufacturing and employment and buoyant European factory growth boosted investor optimism.

Japan's Nikkei gained 0.1.6%, Hong Kong's Hang Seng added 0.4%, while China's Shanghai Composite was little changed.

Photograph: Danish Siddiqui/Reuters