Benchmarks extend rally for second straight session; Sensex regains 28,500 mark

Extending their previous session northward journey, Indian equity benchmarks ended the session with a gain of around a percentage point. Buying activity which took place during second half of trade mainly drove the markets higher with Sensex and Nifty recapturing their crucial 28,500 and 8,650 levels respectively. Markets traded near their neutral lines in first half as investors remained on sidelines expecting the central bank to maintain status quo on key rates at its policy meet tomorrow. However, frontline gauges gained momentum in the latter half of the trading session to end nearly a percent higher amid renewed buying interest in defensives led by Sun Pharmaceutical. Some support also came with report that, foreign institutional investors were net buyers in equities to the tune of Rs 210 crore on Wednesday.

Meanwhile, investors shrugged off weak service Purchasing Managers' Index (PMI) data. On the macro-front, growth in India's pivotal services industry lost some momentum in March as input prices rose at the fastest pace in nearly a year with HSBC Services PMI easing to 53.0 in March from February’s eight-month high of 53.9. Nevertheless, positive global set-up also aided the sentiment.

Global cues too remained supportive with Asian shares ending mostly higher as a dismal US jobs report led investors to pare bets the US Federal Reserve would hike interest rates anytime soon. Labor Department data showed U.S. employers added just 126,000 jobs in March, the fewest in more than a year. Meanwhile, Major European markets were closed from Friday to Monday for the Easter holiday, reopening on Tuesday.

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. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 62.20 per dollar at the time of equity market closing against the previous close of 62.49 on the Interbank Foreign Exchange.

Meanwhile, buying in healthcare counter too aided the sentiments led by over 8% surge in Sun Pharma following the completion of the merger of Ranbaxy Laboratories with itself. Stocks related to Consumer Durables counter remained on buyers’ radar on expectations that the government will move the GST Constitutional Amendment Bill in the Lok Sabha soon. Power stocks too remained in limelight as the government has extended till June-end short-term supply of coal to power plants, which had lost their mines after the Supreme Court cancelled licences of 204 blocks last year. However, banking stocks traded mixed after recent polls forecasted that the central bank would maintain status quo on interest rates due to unseasonal rainfall which has destroyed crops and is likely to put pressure on the inflation.

The NSE's 50-share broadly followed index Nifty rose by over seventy points and ended above the psychological 8,650 support level, while Bombay Stock Exchange's Sensitive Index -- Sensex surged by over two hundred and forty points to finish above the psychological 28,500 mark. Broader markets too traded with traction throughout the trade and ended the session with a gain of over a percentage point. The market breadth remained in favor of advances, as there were 1,812 shares on the gaining side against 921 shares on the losing side while 110 shares remain unchanged.

Finally, the BSE Sensex soared by 244.32 points or 0.86% to 28504.46, while the CNX Nifty surged by 73.65 points or 0.86% to 8,659.90.

The BSE Sensex touched a high and a low of 28530.81and 28221.99, respectively. The BSE Mid cap index was up by 1.11%, while Small cap index was up by 1.37%.

The top gainers on the Sensex were Sun Pharma Inds. up by 8.34%, Dr. Reddys Lab up by 4.33%, GAIL India up by 3.77%, Cipla up by 3.59% and ONGC up by 3.48%. On the flip side, Tata Steel down by 1.84%, Wipro down by 1.75%, Reliance Industries down by 1.26%, Coal India down by 0.72% and Tata Power down by 0.64% were the top losers.

The gaining sectoral indices on the BSE were Realty up by 6.43%, Healthcare up by 4.84%, FMCG up by 2.35%, Consumer Durables up by 2.06%, Capital Goods up by 1.40% and Oil & Gas up by 1.26% while, Metal down by 0.40% and Bankex down by 0.01% were the losing indices on BSE.

Meanwhile President Pranab Mukherjee has assented to the re-promulgation of the Land Ordinance, which came into effect from April 5 after the Union Cabinet gave its approval for such repromulgation in its meeting. President Pranab Mukherjee had signed the ordinance as recommended by the union cabinet on March 31.

The fresh ordinance, which is the 11th by the Narendra Modi government, incorporates nine amendments that were part of the bill passed in Lok Sabha last month. The amendments include removal of social infrastructure from the five categories exempted earlier (defence, rural infrastructure, affordable housing, industrial corridors and infrastructure & social infrastructure, including Public-Private-Partnership projects where the Government owns the land). Other important amendment is about dropping an earlier proposal of the Government acquiring land for private hospitals and private educational institutions.

To enable re-promulgation of the ordinance, the government last week got the Rajya Sabha prorogued. Under the Constitution at least one of the Houses has to be prorogued for government to issue an ordinance, as an ordinance cannot be issued when Parliament is in session. The pending measure, titled Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill that was passed in Lok Sabha sought to replace the ordinance that was promulgated in December but the government faced the opposition roadblock in Rajya Sabha and could not get converted into a legislation.

Now, the Centre will have to replace the Ordinance by a Law of Parliament when the Rajya Sabha assembles again later this month to complete the Budget exercise. If the Centre again fails to get the Bill passed in the Upper House, it can re-promulgate the Ordinance again as there is no cap on number of times an Ordinance can be issued.

 The CNX Nifty touched a high and low of 8,667.55 and 8,573.75 respectively.

The top gainers on Nifty were Sun Pharmaceuticals Industries up by 8.95%, Dr. Reddy's Laboratories up by 4.55%, GAIL (India) up by 4.22%, Cairn India up by 4.03% and ONGC up by 3.82%. On the flip side, PNB down by 2.04%, Wipro down by 2.03%, Tata Steel down by 1.93%, Reliance Industries down by 1.48% and IndusInd Bank down by 1.22% were the top losers.

The Asian markets closed mostly in green on Monday, after a dismal US jobs report pushed down US Treasury yields as investors pared bets that US Federal Reserve would hike interest rates anytime soon. The stock market of China, Hong Kong and Taiwan were closed today on account of trading holiday. For Prime Minister Shinzo Abe’s economic revival plan to work, pulling Japan out of decades of stagnation and deflation, companies need to be willing to use that cash for new investment in a way they have so far baulked at in the more than two years since he took office. Japan’s index of leading economic indicators rose to a seasonally adjusted 105.3.