Stock Market: No recession signs’ cheers bring equity animal spirit in game

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By S Jha

New Delhi, June 2: It’s party time in the stock markets. At least, this is the message emerging from the American bourses in the afternoon trade on Friday, with bourses flying on the back of the Congressional and Senate clearance of the debt deal, as well as the US economy adding more jobs, while confidence is growing that now it’s the turn of the Federal Reserve to press the pause button on the rate hike.

Dow Jones was up by over two per cent to net a gain of more than 700 points to head to a high of several months. Nasdaq was also trending up along with S&P. The Indian equity market participants may be turning in their beds for an early Monday morning of the indices to see the impact on the bourses even while the Nifty shrugged off the sideways theme in the late hour on Friday.

The US job market for 14^th straight week reported positive data to dim the fear of recession in the largest economy of the world. The impact is already visible on the smallcap and midcap IT firms, which have been trending for the past few days, as Cyient also logged in a smart gain on Friday.

Nifty and Bank Nifty carried their sideways theme from Thursday to finally take a direction in the late hour on Friday. Bank Nifty led the market onto the green territory. Earlier, reports that China will come out with a stimulus package to bring life in the real-estate in the Communist country brought life in the metal sector, which in second half session gained most of the strength, with Hindalco leading the show. For over two years, Hindalco has been the leader in the metal space and it trends firmly to any positive cues. The bullish sentiments spread to the midcap and smallcap metal space also, with the likes of Graphite, HEG, Llyods Steel gaining smartly.

The realty sector extended their gains on Friday also. DLF, Indiabulls real-estate were the gainers. Home First Finance, a smart mover among the housing finance companies, also gained smartly. In the rail space, Titagarh Wagons gained. The firm has been trending up after its consortium bagged a contract to manufacture Vande Bharat trains. The institutional action in the cash market was muted on Friday.