Benchmarks snap five days losing streak; Nifty regains 8,400 mark

Snapping their five days losing streak, Indian equity benchmarks ended the volatile day of trade with a gain of over three fourth of a percent on Wednesday. Markets opened higher and remained rangebound during the first half of the trading session only to fall sharply in late noon trades, spooked by a weak monsoon forecast. The first forecast of Monsoon rains, released today by Indian Meteorological Department (IMD), predicted that the rainfall during the season may fall below normal adding to the worries over the possible build-up of an El Nino condition in South Asian region threatening severe to moderate disruption of rains. However, hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending near intraday high levels, recapturing their crucial 27,850 (Sensex) and 8,400 (Nifty) bastions.

Domestic sentiment was propped up on value-buying in blue-chips after five straight session of losses. Some support also came in with reports that Finance Minister Arun Jaitley will meet his state counterparts to discuss the roadmap for rolling out Goods and Services Tax (GST) from April 2016. Later, the state ministers will discuss amongst themselves various issues relating to the implementation of the new indirect regime.

On the global front, European markets made a sluggish start as investors looked to Greece’s debt crisis and lurch towards possible default as an excuse to cash in gains chalked up earlier in the week. Asian equity indices ended mixed on Wednesday as lackluster cues from Wall Street overnight and lower crude oil prices kept investors on edge. While Chinese and Japanese shares outperformed to hit multi-year highs, the underlying mood remained cautious elsewhere across the Asia-Pacific region after recent gains, driven by Chinese stimulus measures to spur lending and combat a slowing economy.

Back home, rally in metals counter supported the sentiments after World Steel Association (WSA) said that India retained its position as the world's third-largest steel producer in the month of March. Public sector oil marketing companies (OMCs) too edged higher after Brent crude oil futures extended previous session’s losses after Saudi Arabia announced the end of its military campaign in Yemen, easing tensions in the Middle East, and traders expected another weekly build in US crude stockpiles. Additionally, sugar stocks remained on buyers’ radar on reports that the government is likely to raise sugar import duty. On the flip side, software and metal counters remained in somber mood, after India’s third largest software services firm Wipro posted a net profit of Rs 2,286.5 crore in January-March 2015, modestly higher by 2.1 per cent than Rs 2,239.1 crore a year-ago, missing the street estimates.

The NSE’s 50-share broadly followed index Nifty rose by over fifty points and ended above the psychological 8,400 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over two hundred and ten points to finish above the psychological 27,850 mark. Broader markets struggled to get any traction and ended the session mixed. The market breadth remained in favor of decliners, as there were 1,359 shares on the gaining side against 1,382 shares on the losing side while 131 shares remain unchanged.

Finally, the BSE Sensex surged 214.09 points or 0.77% to 27890.13, while the CNX Nifty gained 51.95 points or 0.62% to 8429.70.

The BSE Sensex touched a high and a low of 27947.26 and 27385.48, respectively. The BSE Mid cap index was up by 0.38%, while Small cap index down by 0.04%.

The top gainers on the Sensex were Hindustan Unilever up by 3.59%, Hero MotoCorp up by 3.40%, Larsen & Toubro up by 3.29%, Axis Bank up by 3.19% and Dr. Reddys Lab up by 3.04%. On the flip side, Wipro down by 6.01%, ONGC down by 2.61%, SBI down by 1.71%, Maruti Suzuki down by 0.78% and Tata Motors down by 0.72% were the top losers.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.88%, Healthcare up by 1.20%, Bankex up by 0.78%, FMCG up by 0.52% and Metal up by 0.46%, while IT down by 0.67%, TECK down by 0.42%, Oil & Gas down by 0.41%, PSU down by 0.41%, INFRA down by 0.21% were the losing indices on BSE.

Meanwhile, in order to formulate a policy for promoting bulk drug manufacturing in the country, the government has been evaluating recommendations of a committee formed to study issues related to critical active pharmaceutical ingredients (APIs). The government, while taking various measures for promoting ‘Make in India’ initiative in pharmaceutical sector had constituted a committee under the chairmanship of Secretary, Department of Health Research in this direction.

The committee, among many other things recommended establishment of Mega Parks for APIs with common facilities such as common effluent treatment plants, testing facilities, captive power plants/assured power supply by state systems, common utilities /services such as storage, testing laboratories, IPR management, designing, guest houses/accommodation etc maintained by a separate special purpose vehicles (SPV).

Basically, the policy is being contemplated to reduce dependence on imports. This could be done so by making changes to the existing regulations to promote medical devices production is being chalked out by the Centre. Notably, the measures, in various stages of formulation, are focused on providing impetus to the pharmaceutical industry and making medicines as well as medical devices affordable and accessible.

The CNX Nifty touched a high and low of 8449.95 and 8284.70 respectively.

The top gainers on Nifty were Hindustan Unilever up by 4.19%, ACC up by 4.13%, Larsen & Toubro up by 3.58%, Axis Bank up by 3.58% and Hero MotoCorp up by 3.46%. On the flip side, Wipro down by 5.93%, ONGC down by 2.61%, Cairn India down by 1.89%, SBI down by 1.85% and ZEEL down by 1.40% were the top losers.

European Markets were trading in the red; Germany's DAX was down by 1.21%, France's CAC was down by 0.73% and UK's FTSE 100 was down by 0.69%.

The Asian markets made a mixed closing on Wednesday and traders in the region remained concerned about the cash-strapped Greece which may default on its debt, with any positive solution looking remote since the Germans refused to release additional bailout funds without a credible reform plan from Greece. However, the Tokyo and Shanghai markets showed good upmove with Chinese stocks ending with gains of over 2 percent to a new seven-year peak. Japan’s Nikkei too rose 1 percent to a high not seen since April 2000, after country’s March trade data showed a surplus of Yen 229.3 billion, the first surplus in 33 months. Exports rose 8.5%, matching expectations and imports declined 14.5%, more than the 12.8% fall seen. Hong Kong shares also rose while South Korean, Australian, Malaysian and Indonesian stocks fell.