Benchmarks manage to keep head above water; Sensex recaptures 29,000 mark

Tuesday turned out to be choppy day of trade for Indian equity benchmarks as investors opted to remain on sidelines ahead of key events including Economic Survey, Railway Budget and Union Budget, along with the expiry of February series due later during the week. Though, key gages managed to keep their head above water with Sensex recapturing its crucial 29,000 mark. Some support came with President Pranab Mukherjee’s statement while addressing the joint session of parliament that the latest estimates of India’s gross domestic product (GDP) growth making it the fastest growing large economy in the world, is Narendra Modi-led government’s most significant achievement till date.

However, gains remained capped after Standard and Poor’s said the government must deliver on its reform promises, as low income levels and weak fiscal indicators were constraining the sovereign’s credit worthiness compared to its peers. Gains also remained limited due to falls in resource stocks such as Reliance Industries on fears lower crude oil prices would hurt margins, while coal users were down on profit-taking after recent rally during coal block auctions.

On the global front, European markets were trading mostly in the red in early deals, taking a breather after several indexes set multi-year highs on the previous day. Most of the Asian equity indices ended in the green led by gains in Japanese Nikkei, which rose for a fifth straight day on Tuesday and scored another 15-year high after the yen weakened.

Back home, appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 62.28 per dollar at the time of equity market closing against the Monday’s close of 62.32 on the Interbank Foreign Exchange. Furthermore, foreign portfolio investors (FPIs) bought shares worth a net Rs 601.91 crore on Monday, as per provisional data released by the stock exchanges.

Meanwhile, public sector oil marketing companies (OMCs) viz. HPCL and BPCL edged higher after crude oil prices dropped. However, telecom stocks range off after Telecom Regulatory Authority of India (TRAI) in a move to boost fixed line phone connections in the country, removed charges that a landline service provider has to pay to the other service providers for transmitting its customers’ phone calls. Moreover, PSU bank stocks led decline in bank stocks after the bank employees’ unions and bank managements, under the aegis of the Indian Banks' Association (IBA), at a meeting held yesterday, 23 February 2015, agreed 15% wage hike as part of an industry-wide wage settlement.

The NSE’s 50-share broadly followed index Nifty rose by just seven points to hold the psychological 8,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by around thirty points to finish above the psychological 29,000 mark. Broader markets, however, struggled to get any traction and ended the session in red with a cut of around half a percent. The market breadth remained in favor of decliners, as there were 1,142 shares on the gaining side against 1,712 shares on the losing side while 129 shares remain unchanged.

Finally, the BSE Sensex rose by 29.55 points or 0.10% to 29004.66, while the CNX Nifty gained 7.15 points or 0.08% to 8762.10.

The BSE Sensex touched a high and a low of 29130.67 and 28875.94, respectively. The BSE Mid cap index was down 0.19%, while Small cap index was down by 0.78%.

The top gainers on the Sensex were Hindustan Unilever up by 3.15%, Larsen & Toubro up by 2.03%, BHEL up by 1.78%, ITC up by 1.46% and Cipla up by 1.23%. On the flip side, Sesa Sterlite down by 3.49%, ONGC down by 2.98%, Tata Steel down by 2.08%, Tata Motors down by 1.55% and Reliance Industries down by 1.10% were the top losers.

The top gaining sectoral indices on the BSE were FMCG up by 1.45%, Capital Goods up by 1.09%, Realty up by 0.56%, IT up by 0.37% and Infrastructure up by 0.29%, while Oil & Gas down by 1.15%, Metal down by 1.10%, PSU down by 0.52%, Auto down by 0.30% and Bankex down by 0.10% were the losing indices on BSE.

Meanwhile, addressing the joint sitting of Parliament at the start of the Budget Session, President Pranab Mukherjee underscored India had emerged as the fastest growing large economy with a promising future. He acknowledged sustained efforts and series of policy initiatives taken by the government to put back the economy to the high growth trajectory, with an estimated growth of 7.4% in 2014-15.

He highlighted measures taken by the government to improve ease of doing business, ending financial untouchability and containing inflation with a view of stimulating economy and also lauded government’s decisive measures to help lower the inflation to 'record low' and also boost capital markets.

Emphasizing to some of the major initiatives taken by the government for improving ease of doing business, Mukherjee pointed to the government’s efforts in streamlining various entry and exit regulations and introducing the process of filing online applications for various corporate activities.

Further, the president assured that Center would expedite implementation of the recommendations of the Financial Sector Legislative Reforms Commission (FSLRC) and simplify the indirect tax regime, broaden the tax base and result in better compliance.

He also appreciated government’s efforts for ‘Make in India’ initiative and passing Insurance Laws (Amendment) Ordinance, 2014, which promulgated enhancing the foreign equity cap from 26% to 49%, while safeguarding Indian ownership and control, besides SEBI’s new Foreign Portfolio Investment norms that have established a unified, simple regulatory framework.

The CNX Nifty touched a high and low of 8800.50 and 8726.75 respectively.

The top gainers on Nifty were Hindustan Unilever up by 3.11%, Kotak Mahindra Bank up by 2.54%, Zee Entertainment up by 2.44%, BPCL up by 2.39% and Larsen & Toubro up by 2.02%. On the flip side, Jindal Steel & Power down by 4.24%, Sesa Sterlite down by 3.73%, Cairn India down by 3.55%, Bank of Baroda down by 3.07% and ONGC down by 3.02% were the top losers.

European Markets were trading mostly in the green; Germany’s DAX declined 0.05% and France’s CAC was down by 0.04%, while UK’s FTSE 100 was up by 0.02%.

The Asian indices ended mostly in green on Tuesday, while China is in the last day of a week-long Lunar New Year holiday, with investors eyeing Greece to pass reforms needed to secure further euro zone loans. Hong Kong Financial Secretary John Tsang will present the 2015-16 Budget to the Legislative Council tomorrow. The key proposals will be available for collection at the Home Affairs Department’s 20 Public Enquiry Service Centres, and at a counter at the footbridge entrance to the Central Government Offices at Tamar opposite Admiralty Centre. Indonesian fixed income markets are signaling that policy rates will be cut at least once more within the next few months - even if economists remain divided over the prospect. Bank Indonesia surprised last week when it cut policy rates, saying the drop in oil prices had helped ease concerns about inflation. Japan’s Corporate Services Price Index (CSPI) fell to a seasonally adjusted annual rate of 3.4%, from 3.5% in the preceding month whose figure was revised down from 3.6%.