Benchmarks snap three days losing streak

Snapping three days losing streak, Indian equity benchmarks staged an enthusiastic performance on Thursday, by rallying around a percentage point and breaking lots of psychological levels in their northward rally. Sentiments remained positive since beginning of the trade and there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong but oversold stocks. Sentiments remained up-beat after the International Monetary Fund (IMF) in its annual assessment report for the India has raised its growth forecast for the current fiscal to 7.2 percent. Moreover, global rating agency Moody’s has retained India’s stable outlook on the sovereign rating at Baa3, citing the country's large and diversified economy and healthy private savings rate.

Some support also came in with the statement of Revenue Secretary that the GST rollout is on track. He has also said that the roadmap for the removal of corporate tax exemptions announced in the Union Budget are also set to be announced during the course of this year. Meanwhile, Indirect tax revenue (provisional) collections have increased to Rs 4,78,630 crore during April-February 2014-15, an increase of 7.4 percent over the corresponding period in the previous fiscal.

On the global front, European counters were trading mostly in the red in early deals tracking dip on Wall Street as worries grew about the timing of a Federal Reserve interest rate hike and dollar strength further dampened the outlook for US earnings. However, Asian markets ended mostly in the green as surprise interest rate cut by South Korea's central bank aided sentiments. The Bank of Korea’s monetary policy committee cut its base rate by 25 basis points to a record low of 1.75%, its first cut in five months.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Frontline indices managed to settle near intraday high levels with Sensex recapturing its crucial 28,900 bastion, while Nifty ended near its crucial 8,800 mark. Recovery in Indian rupee too supported the sentiments. The rupee firmed up against the US dollar and was trading at 62.55 at the time of equity markets closing as compared to Wednesday’s close of 62.78, tracking gains in domestic equity markets.

Meanwhile, buying in banking counters too aided the sentiments after the government signaled that it is ready to allow lenders raise funds from the market to meet their capital needs. FMCG counter too edged higher, led by ITC which rallied on buzz of likely cigarette price hike. Telecom stocks continued its northward journey for third straight session after bidding intensity slowed in past few days in the ongoing auction of 2G and 3G telecom spectrum. Additionally, insurance companies gained on expectations the Upper House of Parliament would vote on legislation proposing to increase the foreign investment limit in insurers to 49 per cent from 26 per cent as early as Thursday.

The NSE’s 50-share broadly followed index Nifty rose by around eighty points and ended above the psychological 8,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by over two hundred and seventy points to finish above the psychological 28,900 mark. Broader markets too traded with traction and ended the session with a gain of around a percentage point. The market breadth remained in favour of advances, as there were 1,643 shares on the gaining side against 1,229 shares on the losing side while 141 shares remain unchanged.

Finally, the BSE Sensex surged by 271.24 points or 0.95% to 28930.41, while the CNX Nifty soared by 76.05 points or 0.87% to 8,776.00.

The BSE Sensex touched a high and a low of 28971.01and 28772.71, respectively. The BSE Mid cap index was up by 1.19%, while Small cap index was up by 0.90%.

The top gainers on the Sensex were Sesa Sterlite up by 3.63%, NTPC up by 3.54%, Hindalco up by 3.37%, Sun Pharma up by 2.46% and ITC up by 2.35%. On the flip side, Dr. Reddys Lab down by 1.40%, Coal India down by 1.23%, Mahindra & Mahindra down by 1.06%, Bajaj Auto down by 1.01% and Hindustan Unilever down by 0.73% were the top losers.

The gaining sectoral indices on the BSE were Power up by 2.27%, INFRA up by 1.90%, Realty up by 1.53%, Consumer Durables up by 1.49% and Metal up by 1.43% while, there were no losers.

Meanwhile, a bill that seeks to raise foreign investment in the insurance sector will be taken up in the Rajya Sabha on Thursday and is expected to sail through following the government's agreement to the opposition's demand to refer two other contentious bills, the Mines and Minerals (Development and Regulation) Bill and Coal Mines (Special Provisions) Bill, to select committees in the upper House.

Formally called the 'Insurance Laws (Amendment) Bill' and rechristened as 'Insurance Laws (Amendment) bill, 2015', the bill seeks to amend the Insurance Act, 1938 and the General Insurance Business (Nationalization) Act 1972 and the Insurance Regulatory and Development Authority (IRDA) Act, 1999. It aims at increasing the cap on foreign direct investment (FDI) in the public sector insurance companies from 26 to 49 per cent was passed by Lok Sabha last week. The amendment is expected to bring in much needed additional equity to the tune of Rs 25,000 crore to the insurance sector.

Notably, Congress had earlier indicated that it will not obstruct the passage of the Insurance Bill as it was in principle the UPA's 'baby'. The bill, one of the key reform legislations, has been pending since 2008.

The CNX Nifty touched a high and low of 8,787.20 and 8,732.90 respectively.

The top gainers on Nifty were Cairn India up by 4.83%, SSLT up by 4.57%, NTPC up by 3.41%, Hindalco Industries up by 3.18% and DLF up by 2.83%. On the flip side, Tech Mahindra down by 2.11%, Mahindra & Mahindra down by 1.53%, Bajaj Auto down by 1.36%, Dr. Reddy's Laboratories down by 1.12% and Coal India down by 1.02% were the top losers.

Most of European Markets were trading in the red; Germany's DAX was down by 0.16% and France's CAC was down by 0.12% while UK's FTSE 100 was up by 0.77%.

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.