Markets make gap-up opening following CRR cut

Sentiments continued to remain bullish for second day in a row and Indian benchmarks have extended their previous sessions’ rally with a gap-up opening following the cash reserve ratio (CRR) cut by the Reserve Bank of India (RBI) on Friday. Globally, the US markets moved higher marginally on Friday on getting good jobs data, the non-farm payrolls climbed more than expected however, most of the Asian counters were trading in the red at this point of time. Back home, the RBI, after the market hours on Friday has cut the CRR, the share of deposits that banks must hold with it, by 75 basis points to 4.75 percent. This reduction, which will inject around Rs 48,000 crore of primary liquidity into the banking system, has come ahead of RBI policy review meet on March 15 will give boost to the banking and rate sensitive sectors. Moreover, stocks in the consumer durable, banking, software, capital goods, technology, refinery, auto, and metal sectors led the rally while, fast moving consumer goods remained the lone loser on the BSE sectoral space. The broader indices were trading in-line with benchmarks. The market breadth on the BSE was positive; there were 395 shares on the gaining side against 108 shares on the losing side while 12 shares remained unchanged.

The BSE Sensex opened at 17,772.10; about 269 points higher compared to its previous closing of 17,503.24, and has touched a low of 17,616.55 while high remained its opening.

The index is currently trading at 17,622.53, up by 119.29 points or 0.68%. There were 20 stocks advancing against 10 declines on the index.

The overall market breadth has made a strong start with 76.70% stocks advancing against 20.97% declines. The broader indices too were trading in-line with benchmarks; the BSE Mid cap and Small cap indices rose 0.62% and 0.42% respectively.

The top gaining sectoral indices on the BSE were, CD up by 1.97%, CG up by 1.45%, Bankex up by 1.38%, Metal up by 1.18% and PSU up by 0.95%. While, FMCG down by 0.24% remained the lone loser on the index.

The top gainers on the Sensex were SBI up by 3.32%, L&T up by 2.07%, ICICI Bank up by 1.90%, Tata Steel up by 1.40% and BHEL up by 1.26%.

On the flip side, Cipla down by 1.69%, ITC down by 0.50%, HDFC Bank down by 0.44%, Maruti Suzuki down by 0.39% and DLF down by 0.27% remained the top losers on the Sensex.

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 opened at 5,420.10; about 87 points higher compared to its previous closing of 5333.55, and has touched a high and a low of 5,421.90 and 5,361.05 respectively.

The index is currently trading at 5,366.80, higher by 33.25 points or 0.62%. There were 36 stocks advancing against 14 declines on the index.

The top gainers of the Nifty were SBI up by 3.04%, IDFC up by 2.26%, Axis Bank up by 2.24%, L&T up by 2.12% and PNB up by 2.07%.

On the flip side, Cipla down by 1.50%, ACC down by 1.30%, ITC down by 0.58%, Tata Motors down by 0.55% and HDFC Bank down by 0.45% remained the top losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite was down 9.53 points or 0.39% to 2,429.93, Hang Seng was down 56.58 points or 0.27% to 21,029.42, Jakarta Composite was down 5.44 points or 0.14% to 3,986.10, KLSE Composite was down 10.20 points or 0.65% to 1,568.80, Seoul Composite was down 12.07 points or 0.60% to 2,006.23 and Taiwan Weighted was down by 30.70 points or 0.38% to 7,985.31.

On the flip side, Nikkei 225 was up 29.69 points or 0.30% to 9,959.43 and Straits Times was up by 4.53 points or 0.15% to 2,967.68.