Post Session: Quick Review

Snapping three consecutive sessions’ losing streak, Indian equity markets staged a sharp recovery on Thursday, puffing up gains of around a percent which lifted both Sensex and Nifty above psychologically crucial 28,900 and 8,750 levels respectively. Lower level buying activities after three straight sessions of drubbing, notably ahead of the release of crucial macro-economic data later in the day in the backdrop of positive global set-up mainly aided the sentiment. On the macro-front, the CPI is estimated to inch up to 5.26 percent compared to 5.11 percent in the previous month, while IIP for January is expected to come in at a growth of around 0.5 percent versus 1.7 percent month-on-month. The session turned out to be extremely encouraging as bourses after making a gap-up start, steadily went on gaining ground, uptill the last hour of trade wherein accelerated momentum was witnessed that took the markets to day’s high point. The session also turned out to be blissful for broader indices, which went home with gains of around a percent.

Sentiment was largely buttressed after International Monetary Fund (IMF) in its annual assessment report for the country, raised its growth forecast for India in current fiscal to 7.2 percent, while participants also drew heart from the report of Global rating agency Moody’s retaining India’s stable outlook on the sovereign rating at Baa3, citing the country's large and diversified economy and healthy private savings rate. 

On the global front, Stocks in Japan and China led most Asian shares higher on Thursday despite ongoing investor concern in the US over a possible interest rate rise by the US Federal Reserve. Investor relief at the news that the International Monetary Fund had agreed to put $10bn into Ukraine's struggling economy, over the next 12 months, also helped drive Japan's shares higher. Meanwhile, European shares rose in early trading today, shrugging off a dip on Wall Street and extending their sharp gains made in the previous session, helped by forecast-beating results from K+S and Boskalis.

Closer home, with the buying activity being broad-based in nature, all the sectoral indices on BSE concluded into positive territory, nevertheless prominent gainers were the stocks belonging from Power, Infrastructure and Realty counters. Meanwhile, buying resumed in the PSU banking stocks after the government signaled that it is ready to allow lenders raise funds from the market to meet their capital needs. Shares of Oriental Bank, Bank of India, Punjab National Bank, IDBI Bank and Bank of Baroda were up over 1 per cent each. Additionally, Insurance stocks rose after the Congress party agreed to support passage of the insurance bill in Rajya Sabha which seeks to raise the foreign direct investment (FDI) cap in insurance ventures from the existing 26% to 49%. Meanwhile, FMCG counter’s gains were led by ITC stocks which rallied on buzz of likely cigarette price hike. Moreover, four telecom stocks rose for yet another session after bidding intensity slowed in past few days in the ongoing auction of 2G and 3G telecom spectrum. The overall market breadth on BSE was in the favour of advances which thumped decliners in the ratio of 1639:1232; while 142 shares remained unchanged.

The BSE Sensex concluded at 28930.41, up by 271.24 points or 0.95% after trading in a range of 28772.71 and 28971.01. There were 24 stocks advancing against 6 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.19%, while Small cap index up by 0.90%. (Provisional)

The gaining sectoral indices on the BSE were Power up by 2.27%, Infrastructure up by 1.90%, Realty up by 1.53%, Consumer Durables up by 1.49% and Metal up by 1.43% (Provisional)

The top gainers on the Sensex were Sesa Sterlite up by 4.27%, NTPC up by 3.21%, Hindalco up by 2.84%, Sun Pharma Inds. up by 2.50% and BHEL up by 2.39%. On the flip side, Dr. Reddys Lab down by 1.17%, Bajaj Auto down by 1.11%, Coal India down by 1.11%, Mahindra & Mahindra down by 0.93% and Hindustan Unilever down by 0.77% were the top losers. (Provisional)

Meanwhile, the government has initiated the evaluation process for 43 mines to be allocated to state run companies and CPSUs. In total 29 applicants, including SAIL, NTPC, Neyveli Lignite, Singareni Collieries, Goa Industrial Corporation and electricity undertakings of states like Uttar Pradesh, Chhattisgarh, Bihar, Andhra Pradesh, Jharkhand, Haryana Gujarat, Maharashtra, Rajasthan and Punjab among others are in the race to grab these mines. Of the 43 mines, 42 are reserved for power sector and one is for steel sector.

The government has reconstituted the high level inter-ministerial panel with slight modifications to ensure smooth auction and allotment of 204 cancelled coal blocks. Further, government is meeting up chief secretaries of concerned states in order to facilitate smooth transfer of rights and title etc in these coal mines to successful allottees. Mines under production fall under schedule II category, while those ready-to-produce fall under schedule III category.

Notably, Coal Secretary Anil Swarup had earlier this month received 107 applications from various applicants for 43 coal blocks. Among all, Palma Gare Palma Sector II mine in Chhattisgarh has secured nine applications, which is the highest for single block and the companies which applied for this block included the likes of NTPC, Singareni Collieries Company, Andhra Pradesh Power Generation Corporation and Gujarat State Electricity Corporation.

The government had earlier invited applications for 36 coal blocks for allotment but later decided to add more mines, in all allotting 43 mines to PSUs.

India VIX, a gauge for markets short term expectation of volatility declined 2.61% at 14.73 from its previous close of 15.13 on Wednesday. (Provisional)

The CNX Nifty settled at 8776.00, up by 76.05 points or 0.87% after trading in a range of 8732.90 and 8787.20. There were 39 stocks advancing against 11 stocks declining on the index. (Provisional)

The top gainers on Nifty were Cairn India up by 4.56%, Sesa Sterlite up by 4.10%, NTPC up by 3.87%, Hindalco up by 3.49% and DLF up by 3.03%. On the flip side, Tech Mahindra down by 2.21%, Mahindra & Mahindra down by 1.52%, Coal India down by 1.25%, Bajaj Auto down by 1.22% and Dr. Reddys Lab down by 1.01% were the top losers. (Provisional)

European Markets were trading mostly in the red; Germany's DAX decreased 0.38% and France's CAC was down by 0.27%, while UK's FTSE 100 was up by 0.72%.

The Asian markets ended mostly in green on Thursday, as anxiety over US rate hike eases. Chinese banks extended 1.02 trillion yuan ($162.9 billion) of new loans in February, well above market expectations, while growth in broad money supply quickened, taking some heat off the central bank as it seeks to boost flagging economic growth. Total social financing, a broader measure of overall liquidity in the economy, fell to 1.35 trillion yuan in February, versus 2.05 trillion yuan in January. Big Japanese manufacturers grew less optimistic in January-March and they expect business conditions to worsen in the following quarter, a government survey showed, underscoring the economy’s fragile recovery from recession. According to the joint survey by the Ministry of Finance and the Cabinet Office, the business survey index (BSI) of sentiment at large manufacturers stood at plus 2.4 in January-March, compared with plus 8.1 in the prior three months. Japanese Household Confidence rose to a seasonally adjusted annual rate of 40.7, from 39.1 in the preceding month.

South Korea unexpectedly lowered its benchmark interest rate to a record low of 1.75%, joining central banks from Europe to India in efforts to revitalize sluggish economic growth. The quarter percentage point cut was the first interest rate cut by the Bank of Korea in five months. But the central bank stated that South Korea’s economic growth and inflation this year will be lower than expected. Malaysian Industrial Production fell to a seasonally adjusted annual rate of 7.0%, from 7.4% in the preceding month.