Benchmarks end at new closing high levels; Nifty surpasses 8,950 mark

Extending their previous session’s jubilation, Indian equity benchmarks ended the volatile day of trade with a gain of around half a percent after the Union Budget tabled by Finance Minister Arun Jaitley reduced corporate tax and announced a timeline to implement the General Sales Tax. Sentiments were also buttressed as FM promised lower-than-expected borrowing despite raising the fiscal deficit target and as Jaitley announced several measures to woo foreign investors, who have been the backbone of the current rally that has seen Indian stocks outperform most emerging markets. FM deferred the dreaded General Anti Avoidance Rule (GAAR) by two years and proposed to extend a concessionary rate of 5% for so-called withholding taxes on debt investments by foreign investors by two years, until July 1, 2017.

After a gap-up opening, domestic markets succumbed to profit-booking after the HSBC Manufacturing Purchasing Managers’ Index (PMI), compiled by Markit fell for the second consecutive month, to 51.2 in February from 52.9 in January implying that manufacturing activity expanded at its slowest pace in five months in February on slowdown in new orders dragging overall output. However, recovery in last leg of trade help markets to end at lifetime high closing levels.

Positive opening in European markets too supported the sentiments. CAC, DAX and FTSE were trading higher in early deals, with a boost from merger activity in the telecoms sector offset by falls in media group Vivendi. Moreover, China's rate cut and more than expected manufacturing index provided a boost to Asian stocks. The manufacturing sector in China expanded at a faster pace than originally reported in February, the latest survey from HSBC said on Monday with a revised PMI reading of 50.7. That's up from 49.7 in January, and it was even higher than last month's flash estimate of 50.1.

Back home, sentiments also remained up-beat on report that foreign portfolio investors (FPIs) bought shares worth a net Rs 614.03 crore on Saturday, as per provisional data. Meanwhile stocks related to infra space edged higher with the announcement of different measures in the budget, there is proposal to set up 5 ultra mega power projects, each of 4000MW and Tax-free bonds for projects in rail road and irrigation. Government has also said to revitalize the PPP model for infra with taking maximum risk. Moreover, stocks related to cement space surged with most of the frontline companies ending at their lifetime high on expectation of demand in the wake of Rs 70,000 crore additional investments in infrastructure proposed in the Budget. Additionally, shares of state-owned oil marketing companies edged higher by 3-5% after they hiked prices of transport fuels such as petrol and diesel by over Rs 3 per litre which came into effect from Saturday midnight.

The NSE’s 50-share broadly followed index Nifty rose by over fifty points and ended above the psychological 8,950 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by around hundred points to finish above the psychological 29,450 mark. Broader markets too traded with traction and ended the session with a gain of around half a percent. The market breadth remained in favour of advances, as there were 1,510 shares on the gaining side against 1,328 shares on the losing side while 121 shares remain unchanged.

Finally, the BSE Sensex surged by 97.64 points or 0.33% to 29459.14, while the CNX Nifty soared by 54.90 points or 0.62% to 8,956.75.

The BSE Sensex touched a high and a low of 29576.32 and 29259.77, respectively. The BSE Mid cap index was up by 1.31%, while Small cap index was up by 0.93%.

The top gainers on the Sensex were Axis Bank up by 5.64%, Cipla up by 4.96%, BHEL up by 4.44%, Larsen & Toubro up by 4.34% and Hindustan Unilever up by 2.80%. On the flip side, ITC down by 4.97%, Bajaj Auto down by 4.03%, Bharti Airtel down by 2.18%, Hero MotoCorp down by 2.16% and Tata Motors down by 1.60% were the top losers.

The top gaining sectoral indices on the BSE were Capital Goods up by 3.58%, Healthcare up by 1.87%, Bankex up by 1.81%, Power up by 1.46% and Infrastructure up by 1.15% while FMCG down by 1.89%, Consumer Durables down by 1.16%, Realty down by 0.30%, Auto down by 0.29% and TECK down by 0.23% were the losing indices on BSE.

Meanwhile, in a move that can lower the tariff charges, the Telecom Regulatory Authority of India (TRAI) has proposed a sharp cut of about 35 percent for making calls and up to 80 percent for sending messages while roaming.

As per the latest draft amendment of Telecommunication Tariff Order, the telecom regulator has proposed to cut down maximum charges that can be imposed on outgoing local calls during roaming to 65 paise per minute, from ceiling rate of Re 1 per minute and it has also proposed to cut STD call rates during roaming to Re 1 per minute, from maximum charge of Rs 1.5 per minute.

TRAI has said that local SMS should be charged 20 paise maximum compared Rs 1 that can be charged at present while roaming. TRAI has proposed 25 paise per STD SMS sent by customers when they are roaming, compared to the ceiling tariff of Rs 1.5 per SMS now.

Through the amendment order, the TRAI aims to reduce the ceiling tariffs for national roaming services; it has sought comments from stakeholders by March 13, following which it will issue the final order.

The CNX Nifty touched a high and low of 8,972.35 and 8,885.45 respectively.

The top gainers on Nifty were UltraTech Cement up by 7.70%, Ambuja Cements up by 6.73%, Axis Bank up by 6.11%, Grasim Industries up by 5.99% and Cipla up by 5.92%. On the flip side, ITC down by 5.04%, Jindal Steel & Power down by 4.11%, Bajaj Auto down by 3.50%, Hero MotoCorp down by 2.11% and Bharti Airtel down by 2.11% were the top losers.

Most of the European Markets were trading in the green; Germany's DAX was up by 0.33% and UK's FTSE 100 was up by 0.34% while France's CAC was down by 0.17%.

The Asian markets ended mostly in green on Monday, as China’s weekend interest rate cut partially offset soft US data. Activity in China’s factory sector edged up to a seven-month high in February but export orders shrank and deflationary pressures persisted, a private business survey showed, adding to the view that yet more interest rate cuts will be needed. A survey showed the HSBC/Markit Purchasing Managers’ Index (PMI) climbed to 50.7 in February - the strongest level since July - from 49.7 in January, as overall new orders picked up. Chinese policymakers are embarking on their biggest easing campaign since the depths of the global crisis as the world’s second-largest economy is weighed down by a cooling property market, high debt levels and excess factory capacity. The People’s Bank of China cut interest rates, in the latest effort to support the economy as its momentum slows. The move was its third major policy easing since late November and came just days before the annual meeting of the country’s parliament. Thailand CPI fell to a seasonally adjusted annual rate of -0.52%, from -0.41% in the preceding month. Indonesian Inflation fell to a seasonally adjusted 6.29%, from 6.96% in the preceding month. South Korean Industrial Production rose to a seasonally adjusted annual rate of 1.8%, from 1.1% in the preceding month whose figure was revised up from 0.4%.