Benchmarks extend winning streak for fourth straight session

Extending their winning streak to fourth straight day, Indian equity benchmarks ended the Tuesday’s session at their all time closing high levels with Sensex and Nifty ending just shy of their crucial 29,600 and 9,000 levels respectively as sentiments remained up-beat on sustained inflow of foreign capital amid growth-oriented and market-friendly measures in the Budget. Markets traded choppy in early deals on the back of weak economic data, as after lower manufacturing numbers, growth in eight core industries has slowed down to 1.8% in January, its lowest in last 13 months, due to negative expansion in crude oil and natural gas. Also, the global rating agency S&P ruled out a rating upgrade for India within a year while Fitch said the government's fiscal consolidation strategy spelt out in Budget is “less aspiring” than in the past.

However, markets gained momentum in second half of the session with Nifty touching record high level of 9,000 on persistent buying, mainly in healthcare, consumer durables IT and energy stocks with Reliance contributing the most to the gains after LIC increased its stake in the company. Sentiment also remained upbeat on hopes the government’s move to make no distinction between foreign direct investment and foreign portfolio investment would raise India’s weight in MSCI indexes. Moreover, traders await clarity on the central bank’s stance on rate cuts after formally adopting inflation targeting and the government pushed fiscal deficit target by a year to focus on infrastructure spending.

Global cues too remained supportive with European counters making a firm start as better-than-expected German retail sales further buoyed investors days before the European Central Bank kicks off a trillion-euro bond-buying programme. Asian markets ended higher on Tuesday, bolstered by another record day on Wall Street, while a resurgent yen helped knock the US dollar index off an 11-year high.

Back home, stocks related to infra space continued to edged higher for second straight day 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. Shares of insurance companies, like Reliance Capital, Religare Enterprises, Bajaj Finserv, HDFC, Max India and Aditya Birla Nuvo edged higher on reports of government introducing Insurance Bill in Lok Sabha today. The Insurance Bill, which intends to raise foreign investment in the insurance sector to 49% from 26%, will replace the Ordinance issued last year.

On the flip side, auto stocks edged lower on reporting their monthly sales figures. Additionally, banking stocks lost steam on uncertainty over when Reserve Bank of India would ease rates after it formally adopted inflation targeting and the government pushed its fiscal deficit target by year to focus on infrastructure spending.

The NSE’s 50-share broadly followed index Nifty ended higher by around forty points to end just shy of its psychological 9,000 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex edged higher by over one hundred and thirty points to end tad below the psychological 29,600 mark. The broader markets too traded with traction and ended the session with a gain of over a percent. The market breadth remained in favour of advances, as there were 1678 shares on the gaining side against 1,175 shares on the losing side while 144 shares remain unchanged.

Finally, the BSE Sensex surged by 134.59 points or 0.46% to 29593.73, while the CNX Nifty soared by 39.50 points or 0.44% to 8,996.25.

The BSE Sensex touched a high and a low of 29636.86 and 29364.87, respectively. The BSE Mid cap index was up by 1.18%, while Small cap index was up by 1.39%.

The top gainers on the Sensex were Reliance Industries up by 4.39%, TCS up by 3.92%, Bajaj Auto up by 2.18%, Cipla up by 2.14% and Sun Pharma up by 2.01%. On the flip side, Coal India down by 3.89%, Mahindra & Mahindra down by 3.26%, Axis Bank down by 2.34%, Tata Motors down by 1.63% and NTPC down by 0.72% were the top losers.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.21%, IT up by 1.45%, Healthcare up by 1.33%, TECK up by 1.27%, and Consumer Durables up by 0.59% while Realty down by 1.19%, Auto down by 0.86%, Metal down by 0.65%, Bankex down by 0.27% and PSU down by 0.16% were the losing indices on BSE.

Meanwhile, in order to improve infrastructure and bring down rampant poverty, Finance Minister Arun Jaitley highlighted that India's economy needs to reach an annual growth rate of 9-10% and then sustain that activity more than a decade.

Jaitley, after presenting a budget that focused on boosting growth before taking on structural reforms, underscored that in order to achieve this goal, the $2 trillion South Asian economy needs to find investment from outside. He admitted that investment available within the country, including bank's ability to finance was modest and therefore the country would require money from wherever it was available.

The Finance Minister used China as an example of what high growth rates could achieve over a decades-long period. He emphasized that if the country could reach 8% growth and then boost it to the 9-10% range than the economy could achieve better infrastructure and bring down poverty rates at a faster pace.

'Union Budget 2015-16' was the first full- fledged budget since Prime Minister Narendra Modi`s landslide election victory last May. It promised higher investment in India`s decrepit roads and railways, while offering the carrot of tax cuts to global companies but the stick of tighter rules to get business tycoons to invest at home rather than put away wealth overseas.

The CNX Nifty touched a high and low of 9,008.40 and 8,925.55 respectively.

The top gainers on Nifty were TCS up by 4.33%, Reliance Industries up by 4.15%, Bank of Baroda up by 3.34%, Jindal Steel & Power up by 2.81% and PNB up by 2.65%. On the flip side, Mahindra & Mahindra down by 3.74%, Axis Bank down by 2.31%, Tata Motors down by 2.05%, DLF down by 1.97% and Ambuja Cements down by 1.91% were the top losers.

European Markets were trading in the green; Germany's DAX was up by 0.26%, UK's FTSE 100 was up by 0.17% and France's CAC was up by 0.27%.

The Asian markets ended mixed on Tuesday, while, Chinese markets tumbled as investor excitement over a weekend interest rate cut waned, with a flood of new initial public offerings (IPO) fanning concerns about tighter liquidity. The era of ultra-easy money is drawing to an end for Singapore mortgage holders, with domestic interest rates rising at their fastest pace in a decade in a country that already ranks among the world’s most expensive places to live. South Korea’s annual inflation in February slowest to a 16-year low as the recent collapse in global oil pressured consumer prices, backing expectations for another rate cut to ward off deflation in Asia’s fourth-largest economy. The consumer price index rose 0.5% in February year-on-year, cooling from 0.8% in January. Japan’s Average Cash Earnings remained unchanged at a seasonally adjusted 1.3%, compared to the preceding quarter whose figure was revised down from 1.6% while Japan’s Monetary Base fell to 36.7%, from 37.4% in the preceding month.