Benchmarks snap three days losing streak; Nifty regains 6,750 mark

Boisterous benchmarks, snapping three days losing streak, staged an enthusiastic performance on Thursday by rallying over one and a half percentage point and breaking lots of psychological levels in their northward rally. Sentiments remained up-beat since start, as key bourses opened with decent gains and there appeared not even an iota of profit booking in the session and the benchmarks managed to fervently gain from strength to strength as investors continued their hunt for fundamentally strong stocks. Investors’ confidence got boost after Standard and Poor’s said it may upgrade India’s sovereign outlook if the government that is elected next month addresses some of the country’s economic challenges, including approving the proposed goods and services tax. Some support also came after the Reserve Bank of India (RBI) fully sold Rs 20,000 crore ($3.31 billion) worth of debt on offer, accomplishing the country’s biggest-ever auction.

Also, better-than-expected fourth quarter earnings from Tata Consultancy Services (TCS) and HCL Tech’s Q3 stellar performance boosted sentiment. TCS reported a 48.2% jump in consolidated net profit to Rs 5,357.6 crore for the quarter ended March 31, helped by growth in Europe and APAC and investments in digital technologies, while HCL Technologies posted a jump of 69.67% in its net profit at Rs 1412.54 crore for the quarter ended March 31, 2014 as compared to Rs 832.96 crore for the same quarter in the previous year.

On the global front, supportive cues from US markets provided much needed support to local markets and sentiments remained up-beat on the back of positive remarks by Federal Reserve Chairman Janet Yellen who insisted again that the Fed will remain highly accommodative until employment and inflation reach healthier levels. Asian markets exhibited mixed trend on Thursday, however European counters were trading in the red in early deals.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Frontline gauges comfortably settled above their crucial 6,750 (Nifty) and 22,600 (Sensex) bastions. Appreciation in Indian rupee too supported the sentiments. Meanwhile, PSU oil marketing companies like, BPCL, HPCL and IOC traded with traction, as the loss on sale of diesel has been trimmed by 44 paise to Rs 5.49 a litre after appreciation in the value of the rupee made imports cheaper. Additionally, shares of tyre companies’ viz. Apollo Tyres, Ceat, Goodyear India, JK Tyre Industries, Balkrishna Industries and TVS Srichakra edged higher on expectations of higher revenue growth during the current fiscal.

The NSE’s 50-share broadly followed index Nifty surged by over hundred points to end above the psychological 6,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex zoomed by over three hundred and fifty points to surpass the psychological 22,600 mark. Broader markets too traded neck-to-neck with benchmarks and ended the session with a gain of around one and a half percent. The market breadth remained in favor of advances, as there were 1,724 shares on the gaining side against 1,050 shares on the losing side while 144 shares remain unchanged.

Finally, the BSE Sensex surged by 351.61 points or 1.58%, to settle at 22628.84, while the CNX Nifty gained 104.10 points or 1.56% to settle at 6,779.40.

The BSE Sensex touched a high and a low of 22648.69 and 22312.19, respectively. The BSE Mid cap index was up by 1.47%, while the Small cap index gained 1.43%.

The top gainers on the Sensex were Hindalco Inds up by 4.40%, Tata Motors up by 4.24%, ICICI Bank up by 3.25%, BHEL up by 3.10% and SBI up by 2.96%. While HDFC Bank down by 0.92%, was the only loser in the index.

On the BSE Sectoral front, Realty up by 2.79%, Auto up by 2.25%, Metal up by 1.85%, Power up by 1.81% and Oil & Gas up by 1.79%, were the top gainers, while there were no losers in the space.

Meanwhile, after a miserable performance in the previous fiscal, the National Highways Authority of India (NHAI) is ready with new work plan for current financial year and planned to award around 5,000-km highway contracts in FY15.

As per the NHAI work plan, about 2,300 km of highway projects with a total project cost of over Rs 15,000 crore will be awarded through cash contracts, or Engineering, Procurement, Construction (EPC) mode and 3,000 km projects with cost of over Rs 35,000 crore to be bid via the public-private partnership (PPP) mode. However, the NHAI’s work plan reflects the continual gloom in the sector. NHAI is likely to award projects through EPC mode if it is able to acquire 90% of the land. On the other hand, final award on PPP mode would depend on the market response. So far, bidders’ response to PPP mode remained poor and NHAI would convert PPP to the EPC mode if no bids are received. If PPP projects have to be converted to the EPC mode, then NHAI's financial capacity would have to be examined. Over the past few month, developers’ interest towards PPP mode projects has declined as raising equity for highways PPPs has become difficult. Over the past few years, road sector is struggling with slowdown and the NHAI had blamed the issues like financial stress, land acquisition delays and environmental clearances and enhanced construction risk for the current downturn in the sector. During FY14, NHAI has managed to award around 500 km of road projects, while in FY13 only 1,116 km of projects were awarded against a target of 9,500 km.

The CNX Nifty touched a high and low of 6,783.05 and 6,684.40 respectively.

The top gainers of the Nifty were Tata Motors up by 4.63%, Hindalco Industries up by 4.47%, Jindal Steel & Power up by 4.08%, Ambuja Cements up by 3.97% and ICICI Bank up by 3.39%. On the other hand, HDFC Bank down by 1.10%, Power Grid Corporation of India down by 0.84% and United Spirits down by 0.69% were the only losers.

The European markets were trading in red, France's CAC 40 was down by 0.26%, Germany's DAX was down by 0.25% and United Kingdom's FTSE 100 was down by 0.11%.

The Asian markets concluded Thursday’s trade mostly in green following a third straight rally on Wall Street. Bank of Japan Governor Haruhiko Kuroda stated that aggressive easy policy launched last April will continue and will take Japan out of years of deflation. Kuroda added that the outlook for consumer prices was up, with the year-on-year rate in core consumer prices expected to be around 1.25% for some time, not including a sales tax hike on April 1 to 8% from 5%. Kuroda enlightened that BOJ’s mantra will continue with quantitative and qualitative easing, aiming to achieve the price stability target of 2%, by 2015. Japanese Household Confidence rose to a seasonally adjusted annual rate of 37.5.

China’s slump in property sales and construction is spurring speculation that the government’s four-year-old campaign of real-estate controls will start to crack. The value and volume of home sales in China fell more quickly in the first three months of this year from the January-February period as parties continued to adopt a wait-and-see stance. The value of new homes sold across the country shed 7.7% from the same period a year earlier to 1.1 trillion yuan ($177 billion) during the first quarter. In the first two months of the year, the value fell 5% year on year. The volume of new homes sold fell 5.7% from a year ago to 178.3 million square meters while it shed 1.2% in the first two months.