Post Session: Quick Review

Indian markets recovered some ground on the final day of the week after witnessing a sharp cut in last session, though the new series too witnessed huge round of volatility similar to the one that expired in last session. Benchmarks after making a positive start despite sluggish global cues moved past their crucial psychological levels of 25200 (Sensex) and 7500 (Nifty). Traders got the support of Reserve Bank of India Governor Raghuram Rajan’s statement that stable govt will fortify financial sector though he cautioned that supply side issues need to be solved to help monetary policy bring down inflation.

The global cues were not very supportive for the local markets, as the US indices closed modestly in red on interest rate hike concern and as few of the economic reports announced missed the expectations. The rate hike worries kept weighing the Asian indices too although for the week, most Asian markets eked out small gains. However, the local markets got a boost with positive start of the European markets after the release of upbeat French consumer spending data.  

Back home, benchmarks recovered in second half to post modest gains for the day and almost ended flat for the week, but not before a bout of volatility during mid of the day dragged the markets to intraday low.  But traders went for buying on budget hopes and as the Brent crude fell below $113 a barrel, on track for its biggest weekly loss since January on reduced concerns over exports from strife-torn Iraq. Banking sector remained the underperformer as RBI said that risks to the stability of Indian banks have increased in the six months ended 30 March, as asset quality stress remains high and lenders are weighed down by the slow pace of economic expansion and high inflation. Oil & Gas companies like Reliance Industries, ONGC extended their somberness for the second day albeit modestly, after the Cabinet Committee on Economic Affairs (CCEA) on Wednesday decided to defer the gas price hike by another three months. Also, there was some concern after a report that at least 11 people are feared killed and 15 suffered burn injuries in a big explosion at GAIL’s pipeline at Nagaram village in East Godavari district of Andhra Pradesh. There was last hour spurt in the realty and IT stocks that supported the markets to move higher for the day. Stocks like Unitech, HDIL etc. gained anywhere between 2-5 percent for the day.While strong 3QFY14 results from Accenture raised hopes of better business environment for the IT industry.

The BSE Sensex gained 37.25 points or 0.15% to settle at 25099.92. The index touched a high and a low of 25209.61  and 25032.94 respectively. Among the 30-share Sensex, 12 stocks gained, while 18 declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.27% and 0.41% respectively. (Provisional) 

On the BSE sectoral front, Healthcare up by 2.48%, IT up by 2.45%, TECk up by 1.78%, realty up by 0.80% and Consumer Durables up by 0.77% were the top gainers, while Metal down by 1.30%, Auto down by 0.54%, Bankex down by 0.46% and Capital Goods down by 0.36% were the losers in the space. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 3.97%, TCS up by 3.85%, Cipla up by 2.59%, Wipro up by 1.90% and Dr Reddy’s up by 1.80%. On the flip side, the key losers were Hindalco down by 2.63%, BHEL down by 2.57%, Bharti Airtel down by 2.08%, SSLT down by 1.78% and M&M down by 1.69%. (Provisional)

Meanwhile, highlighting agriculture as a critical sector for India's economy, Industry body Assocham has suggested a slew of short- and long-term measures to provide impetus to agriculture sector.  Industry body has stated that sector has the potential to take India’s gross domestic product (GDP) to 8% and create millions of jobs in rural areas. Besides the sector’s growth would create a surge in consumption-based demand in India, giving the manufacturing and services sectors a boost as well. Agricultural sector, which comprises around 15% of the GDP, expanded at 4.7% in the reported fiscal year as compared to the marginal growth at 1.4% in the FY13.

Assocham suggested the government to adopt an enabling policy environment, modern technology and boost supply-chain efficiency to address food inflation, encourage investment-led growth and ensure food security. In order to enhance supply chain efficiencies, the Agricultural Produce Market Committee (APMC) Act should be implemented in all states.  Further, there is need to replace direct cash transfers and investment subsidies, input-based subsidies to farmers with low-cost credit and linking the MGNREGA to agriculture for asset creation.

Industry Chamber also urged the government to develop effective communication systems between farmers and laboratories by setting up broadband connections and regional Kisan TV channels. Better communication system will help to disseminate real time data along with adoption of a scientific approach to roll out biotechnology applications for better yield and nutrition. Assocham also suggested permitting 100 percent foreign direct investment (FDI) in food processing.

Assocham also recommended the government to take measure for encouraging high value agriculture like horticulture, floriculture, fisheries, poultry and dairy which in turn will enhance job creation in the country. It also suggested that agri-exports be revamped through consistent and stable trade policies and focus on integrated food processing clusters for high-value exports.  

India VIX, a gauge for markets short term volatility expectation declined by 0.42% at 17.62 from its previous close of 17.70 on Thursday. (Provisional)

The CNX Nifty moved up by 15.60 points or 0.21% to settle at 7,508.80. The index touched high and low of 7,538.75 and 7,482.30 respectively. Out of 50 stocks on Nifty, 22 stocks ended in the green, while 28 were in red. (Provisional)

The major gainers of the Nifty were tech Mahindra up by 4.09%, TCS up by 4.01%, Sunpharma up by 3.87%, Powergrid 3.39% and Cipla up by 3.22%. On the flip side, the key losers were MCDOWELL-N down by 3.77%, Ultra Tech down by 3.76%, BHEL down by 2.73%, Hindalco down by 2.66% and M&M down by 2.13%. (Provisional)

European markets were trading in green; UK’s FTSE 100 up by 0.11%, Germany’s DAX up by 0.12% and France’s CAC 40 was up by 0.21%.

The Asian markets concluded Friday’s trade mostly in red, with the benchmark index paring its seventh straight weekly gain, as a Federal Reserve official stated that US may raise interest rates by March. Japanese retail sales rose to a seasonally adjusted annual rate of -0.4%, from -4.4% in the preceding month. Japanese Household Spending fell to a seasonally adjusted -8.0%, from -4.6% in the preceding month. Tokyo’s core CPI, which excludes fresh food costs remained unchanged at an annualized rate of 2.8%. Japan’s unemployment rate fell unexpectedly last month. The Statistics Bureau stated that the percentage of the total work force that is unemployed and actively seeking employment during the previous month fell to a seasonally adjusted 3.5%, from 3.6% in the preceding month. Japan’s National Core CPI rose to a seasonally adjusted 3.4%, from 3.2% in the preceding month. Thai Industrial Production fell to a seasonally adjusted -4.1%, from -3.9% in the preceding month.