Benchmarks trade jubilantly as RBI cuts repo rate

Indian equity benchmarks have made a gap-up opening and are trading jubilantly on the back of surprise rate cut by the RBI. The central bank has reduced Repo rate by 0.25% to 7.50%. Some profit booking too can be expected taking cues from the global markets. Some support also came in with foreign portfolio investors (FPIs) bought shares worth a net Rs 772.92 crore on March 3, 2015, as per provisional data. However, some concern came in with Chief Economic Adviser Arvind Subramanian’s statement that the ambitious 8.1-8.5 percent economic growth projected for the next fiscal in Finance Minister Arun Jaitley's Budget is more like a 'statistical and not a real number'.

On the global front, the US markets ended lower in last session, mainly on profit booking, with the losses on the day, the Nasdaq dipped back below the 5,000 level. Sentiments were also weighed down by news of disappointing auto sales from Ford, General Motors and Chrysler, hurt by the harsh winter weather. The Asian markets were trading mostly in the red at this point of time, led by the Japanese market which is down by over half a percent in early deals as the yen held gains against the dollar.

Back home, on the sectoral front, realty, banking and fast moving consumer goods witnessed the maximum gain in trade, while metal and oil and gas remained the only losers on the BSE sectoral space. The broader indices too were trading with traction, while the market breadth on the BSE was negative; there were 1245 shares on the gaining side against 694 shares on the losing side while 73 shares remain unchanged.

The BSE Sensex is currently trading at 29891.96, up by 298.23 points or 1.01% after trading in a range of 29840.33 and 30024.74. There were 22 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.58%, while Small cap index up by 0.53%.

The gaining sectoral indices on the BSE were Realty up by 2.27%, Bankex up by 1.73%, FMCG up by 1.31%, Capital Goods up by 1.01% and Infrastructure up by 0.94% while, Metal down by 0.20% and Oil & Gas down by 0.01% were the only losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.40%, Tata Motors up by 2.11%, ITC up by 2.08%, SBI up by 2.05% and HDFC up by 1.84%. On the flip side, Coal India down by 0.95%, Wipro down by 0.63%, Hindalco down by 0.51%, GAIL India down by 0.45% and Dr. Reddys Lab down by 0.45% were the top losers.

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 is currently trading at 9076.10, up by 79.85 points or 0.89% after trading in a range of 9059.65 and 9119.20. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were DLF up by 3.14%, PNB up by 2.92%, Kotak Mahindra Bank up by 2.52%, Bank of Baroda up by 2.48% and Tata Motors up by 2.19%. On the flip side, Coal India down by 0.97%, Grasim Industries down by 0.92%, Hindalco down by 0.82%, Wipro down by 0.57% and GAIL India down by 0.57% were the top losers.

Asian markets were trading mostly in the red; Nikkei 225 declined 125.03 points or 0.66% to 18,690.13, Hang Seng slipped 79.45 points or 0.32% to 24,623.33, Jakarta Composite decreased 16.05 points or 0.29% to 5,458.57, Shanghai Composite shed 5.33 points or 0.16% to 3,257.72 and KOSPI Index was down by 3.56 points or 0.18% to 1,997.82.

FTSE Bursa Malaysia KLCI increased 0.77 points or 0.04% to 1,822.02, Straits Times rose 4.35 points or 0.13% to 3,426.46 and Taiwan Weighted was up by 10.2 points or 0.11% to 9,615.97.