Benchmarks extend winning streak to sixth straight session

Extending their winning streak to sixth straight session, Indian equity benchmarks ended the Wednesday’s trade with a gain of over half a percent. Frontline gauges, after a positive start, traded in tight band throughout the session, while buying in last leg of trade helped frontline gauges to reclaim their crucial 29,300 (Sensex) and 8,850 (Nifty) bastions. Sentiments remained up-beat as market participants indulged in enlarging positions on positive global cues and on hopes of faster economic reforms by the government and optimism over the forthcoming Budget.

Some support also came with the government initiative to further ease procedures for seeking permission of the Foreign Investment Promotion Board (FIPB) for foreign direct investment (FDI). Meanwhile, External Affairs Minister Sushma Swaraj said that the government will unveil more reforms in the coming days, including in the forthcoming budget this month to woo foreign investment and make India a manufacturing destination. Traders shrugged off the report of SBI Composite Index, an indicator for tracking India's manufacturing activity, registering a month-on-month decline to 48.3 in February 2015 from 52.1 in January 2015.

Global cues too remained supportive with European markets trading in green in early deals, buoyed by fresh optimism that Greece would reach an agreement with its lenders. Asian markets ended mostly in the green after Bank of Japan kept its monetary policy unchanged as expected.

Back home, domestic institutional investors (DIIs) bought shares worth a net Rs 280.77 crore on February 16 however, foreign portfolio investors sold shares worth a net Rs 182.80 crore during the previous trading session. Meanwhile, defence related stocks remained on buyers’ radar after Prime minister Narendra Modi making a strong pitch for military indigenisation, said that the country's defence industry was at the core of his ‘Make in India’ mission. Prime Minister said even a 20-25 per cent decrease in defence import can create 2 lakh jobs. Also, a 25 percent hike in domestic defence output can create 1 lakh skilled jobs.

Additionally, select stocks from auto and financial counters edged higher on hopes that the government will give a strong thrust to the reform agenda in upcoming budget which along with benign inflation data may provide the cue to the central bank to cut key rates further. Meanwhile, telecom stocks gave a mixed response to report of aggressive deposit of earnest money for the spectrum auction of next month by Reliance Industries’ telecom arm Reliance Jio. While Tata Communication and Idea cellular ended up by over a percent, Bharti Airtel and RCom lost over two percent.

The NSE’s 50-share broadly followed index Nifty rose by around sisty points to end above the psychological 8,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred and eighty points to finish above its psychological 29,300 mark. Broader markets too traded with traction and ended the session in the green with a gain of around a percentage point. The market breadth remained in favor of advances, as there were 1,634 shares on the gaining side against 1,283 shares on the losing side while 111 shares remain unchanged.

Finally, the BSE Sensex surged 184.38 points or 0.63% to 29320.26, while the CNX Nifty gained 59.75 points or 0.68% to 8869.10.

The BSE Sensex touched a high and a low of 29411.32 and 29126.91, respectively. The BSE Mid cap index was up by 0.84%, while Small cap index up by 1.04%.

The top gainers on the Sensex were HDFC up by 2.96%, Tata Power up by 2.50%, TCS up by 1.88%, Tata Motors up by 1.59% and Mahindra & Mahindra up by 1.52%. On the flip side, Hero MotoCorp down by 5.09%, Sesa Sterlite down by 3.19%, Bharti Airtel down by 2.43%, ONGC down by 2.32% and Bajaj Auto down by 0.97% were the top losers.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.81%, Power up by 1.45%, Capital Goods up by 1.34%, IT up by 1.09% and Auto up by 0.89% while, Metal down by 0.72%, Realty down by 0.39%, Oil & Gas down by 0.38% and Infrastructure down by 0.16% were the few losing indices on BSE.

Meanwhile, in good news to companies seeking approval for foreign direct investment (FDI), the government has further eased procedures for seeking permission of the Foreign Investment Promotion Board (FIPB) for FDI; companies can now e-file a single copy application with the FIPB. The move aimed at ease of doing business in the country will improve business environment.

The Finance Ministry launched an upgraded and secure portal for e-filing of FDI applications, where applicants will have to submit only a single copy of the application for records with the FIPB Secretariat instead of 15-18 copies being filed earlier.

A Finance Ministry statement said that since the communication between the applicant, FIPB and other departments are online, any queries raised by the user would be replied through online mode. All the correspondence including updates/decisions will be communicated through SMS/emails, eliminating physical delivery and loss of time due to postal delays. Not only this, the applicants would also get SMS/email alerts related to the queries raised by the administrative ministries, inclusion of the proposal in the scheduled FIPB meeting and decisions.

The CNX Nifty touched a high and low of 8894.30 and 8808.90 respectively.

The top gainers on Nifty were HDFC up by 3.15%, Tata Power up by 2.56%, HCL Tech up by 2.43%, ACC up by 2.41% and Jindal Steel & Power up by 2.10%. On the flip side, Hero MotoCorp down by 5.04%, NMDC down by 4.35%, DLF down by 3.57%, Sesa Sterlite down by 3.00% and Bharti Airtel down by 2.59% were the top losers.

European Markets were trading in the green; Germany’s DAX gained 0.47%, UK’s FTSE 100 rose by 0.04% and France’s CAC was up 0.79%.

The Asian indices ended mostly in green on Wednesday, as pessimism about the Greek debt saga receded somewhat. Shanghai Stock Exchange and Seoul Composite were closed today on account of ‘Lunar New Year’ holiday, while Taiwan Stock Exchange was closed on account of ‘Lunar New Year’s Eve’ holiday. The Bank of Japan decided by an 8 to 1 vote to leave the bank’s policy target unchanged and upgraded its assessment of exports and factory output, while warning consumption has been hit by a April 2014 sales tax hike. On the monetary policy target, the BoJ repeated it will conduct money market operations so that the monetary base will increase at an annual pace of about 80 trillion yen and that its financial asset purchases will also proceed after they expanded on October 31.

Annual inflation in Malaysia fell to a more than five-year low of 1.0 percent in January as oil prices skidded, but economists do not expect the central bank to follow others and respond by cutting interest rates. Central banks around the world have been taking advantage of easing inflation to cut rates to shore up flagging growth, but Malaysia’s economy has defied sliding oil and commodity prices, growing much faster than expected in the fourth quarter.