Euphoric bulls paint D-Street in deep green; Sensex surges over 2%

Coming after celebrations of ‘Holi’ - the festival of colors, Dalal Street got painted in deep green as market bulls took the upside triggers to cover the significant pile of short positions that got build in the week. The frontline indices surged on large volumes as investors’ appetite for riskier asset classes like equities got a boost, after the recent brutal risk aversion, as reports signaled that debt laden Greece closed in on a crucial debt-swap in order to avert an onerous debt debacle.

After a day’s break, euphoric investors resorted to hefty across the board bottom fishing, taking the frontline gauges beyond the psychological 17,500 (Sensex) and 5,300 (Nifty) levels. The local bourses amassed over two percent gains and comprehensively outperformed all the global peers after the Greek debt deal progress caught bears on the wrong foot.

Though some profit booking around the psychological 17,500 (Sensex) and 5,350 (Nifty) levels in late morning trades brought the key indices lower, however the gauges recovered soon after IMF head Christine Lagarde voiced her optimism over the Greek debt deal stating the risk of crisis in the Euro-zone has been removed, with the Greek rescue efforts seeing progress.

Back home, rating agency Moody’s cautioned that a failure to narrow fiscal deficits could endanger India’s credit strengths and could eventually compromise the country's macro-economic profile. However, investors not only shrugged the rating agency’s words of caution but also the India’s trade data for February which showed imports continued to outpace exports in February due to weak demand from major exports markets like the US and Europe, thus widening trade deficit which would in turn worsen India's current account deficit and further weaken the rupee.

But domestic investors at large have shifted their focus towards the RBI's March credit policy review meet in which they expect the central bank to ease liquidity condition to spur economic growth while the Union Budget 2012-13, which is scheduled to be unveiled on March 16, 2012, too is being eyed for further direction.

On the BSE sectoral space, across the board buying was evident with the Metal counter leading the space after rallying over 4.5% followed by the Capital Goods pocket which jumped 3.75%. The defensive FMCG index remained the only chink in the armor with marginal loss. In the meantime, the successful listing of shares of MCX, which ended at Rs 1,297 a premium of 25% over the issue price of Rs 1,032, was indicative of the strong sentiments prevailing in local markets.

The NSE’s 50-share broadly followed index Nifty, settled with triple digit gains just below the psychological 5,350 support level while Bombay Stock Exchange’s Sensitive Index - Sensex accumulated over three hundred and fifty points and closed above the psychological 17,500 mark. Moreover, the broader markets too gained traction in the session and ended with strong gains. But the Small Cap index once again underperformed all its larger peers with relatively smaller gains.

The markets surged on weak volumes of over Rs 1.18 lakh core while the turnover for NSE F&O segment remained on the lower side as compared to that on Wednesday at over Rs 0.92 lakh crore. The market breadth remained extremely optimistic as there were 1845 shares on the gaining side against 989 shares on the losing side while 113 shares remained unchanged.

Finally, the BSE Sensex gained 357.72 points or 2.09% to settle at 17,503.24, while the S&P CNX Nifty increased by 113.10 points or 2.17% to close at 5,333.55.

The BSE Sensex touched a high and a low of 17,531.62 and 17,325.82 respectively. The BSE Mid cap and Small cap indices were up by 2.16% and 1.35% respectively.

The major gainers on the Sensex were Jindal Steel up 6.83%, Tata Steel up by 6.74%, ICICI Bank up by 6.22%, L&T up by 5.27%, Sterlite Inds up by 4.66%. While Wipro down by 1.63%, ITC down by 0.74%, Infosys down by 0.69%, Hindustan Unilever down by 0.59%, GAIL (India) down by 0.34 were the major losers on the index.

On the BSE sectoral the gaining indices were Metal up by 4.69%, Consumer Goods up by 3.75%, Bankex up by 3.66%, Consumer Durable up by 2.92%, Realty up by 2.73% while FMCG down by 0.12% remained the lone loser.

Meanwhile, advocating greater collaboration between India and the US, Indian ambassador Nirupama Rao has called for co-operation between the countries in areas of infrastructure, research, education and health. Pointing out India’s need to develop its infrastructure, Rao stated that clean energy and fuel are two areas where mutually beneficial deals can be worked out. Also education and health are areas which present tremendous opportunities.

India in the next five years will mobilize up to $100 million in public and private sector funds to facilitate research and development in breakthrough technologies. Several proposals have been received by the Centre, and the first awards are likely to be announced within this month. The two governments thus can engage intensively to increase collaboration and unleash the full potential of US-India innovation.

As per Rao, the two nations are uniquely positioned to pool their talent to address President Obama's innovation strategy and for this it is necessary that skilled manpower be allowed to travel between the nations. She pointed out that India's supply base offers leverages in product design and development for not just the Indian market but for the world market.

Describing India and the US as natural allies, Rao said the relationship between the two countries is in a state of constant evolution in a rapidly changing world scenario. Hence there is a need to promote a dynamic network of partnerships and strengthen them through bilateral investments and technology cooperation. 

The S&P CNX Nifty touched a high and low of 5,342.30 and 5,291.60 respectively.

The top gainers on the Nifty were Jindal Steel up 8.05%, Tata Steel up by 7.50%, ICICI Bank up by 6.48%, IDFC up by 5.77%, L&T up by 5.29%. On the flip side, Wipro down by 2.22%, R Power down by 1.84%, Infosys down by 0.95%, Siemens down by 0.87%, ITC down by 0.81% were the top losers on the index.

The European markets were trading mixed, France's CAC 40 was down 0.08%, Britain’s FTSE 100 down 0.06%, while Germany's DAX was up by 0.19%.

Most of the Asian equities ended the session in the positive terrain on last trading day of the week after Greece announced that it had managed to convince a high proportion of its private creditors -- 85.8 percent -- to accept steep losses on their Greek bonds, staving off an imminent default. The ministry also said it intended to force the remaining holdouts to participate. Moreover, ease in Chinese inflation too supported the sentiments.

Meanwhile, Chinese benchmark Shanghai Composite ended up 0.8 percent on Friday, buoyed by the country’s lower-than-expected consumer price index data for February. The country’s consumer price index rose 3.2 percent on year in February, slower than the 4.5 percent on-year rise in January. While, Hong Kong shares ended higher in thin Friday trade, bolstered by financials and growth-sensitive sectors after a slew of weaker-than-expected China data that is expected to give Beijing more room to ease policy to boost growth. In addition, the Nikkei closed up 1.70 percent at 9,929.74 after trading as high as 10,007.62, as some investors pocketed gains ahead of the US February jobs data.