Post session - Quick review

Indian equity markets staged substantial resilience amid murky inflation numbers combined with detested Railway budget, as speculators drawing positive global leads, continued to go long on their position. Choppiness remained the key feature of the trade today, although the barometer gauges protracted their northbound journey for the fourth consecutive session on Wednesday, but, they failed to hoard them entirely, as the gains which were witnessed in the early deals, halved till the end of the session.

The 30-share index, which had gained almost 668 points in the past three days, after piercing through the 18,000 points psychological level, retreated to end off it. However, the widely followed index of NSE-Nifty- found good support around the 5450 bastion, and managed to stay above it, with slender gains of over 25 point. 

The paring gains could be blamed to the decline of Small Cap index, which slipped over 0.25% to conclude near the 6850 level. Barring few stocks like Bartronics (up over 3%) and TCI (up over 1%) the railway stocks were disappointed by Railway Budget 2012. Heavy selling in the railway stocks saw the broader market trading with mixed sentiment as BSE Midcap index concluded with gains above the 0.25%. Some of the railway stocks like Kalindee Rail (down over 7%), Titagarh Wagons (down over 5%), Kernex Micro (down over 6%) and Stone India (down over 7%) suffered major losses during afternoon session.

Snapping a populist trend to help mend the finances of a creaking network that is a bottleneck for growth in Asia's third-largest economy, the railway minister today proposed the first hike in passenger fares in ten years and the highest ever annual plan outlay for the railways at Rs 60,100 crore, of which Rs 15,000 crore he said, would be from market borrowing. The rail minister proposed a 30 paisa per km hike for AC first class travel, a 15 paisa per km hike for AC second tier and a 10 paisa per km hike for AC third tier.

Meanwhile, shifting the focus to macro’s, India's headline inflation picked up for the first time in five months on higher food prices, giving the Reserve Bank of India (RBI) a reason to hold off on a much-awaited interest rate cut when it reviews its policy on Thursday. The wholesale price index, India's main gauge of inflation, edged up 6.95 percent in February from a year earlier. The data, released by the government, was higher than the 6.79% average forecast, after a provisional rise of 6.55 percent in January. However, despite the disappointment on the home turf, global markets kept the local equity markets in fine fettle. Asian stock markets concluded higher on Wednesday, powered by the biggest gains of the year on Wall Street after the US Federal Reserve gave a reasonably upbeat assessment of the economy and made no mention of a need for extraordinary monetary easing policies. Other good news from the US that drove the markets higher included a retail sales report showing a gain of 1.1 per cent last month. The government also revised its estimates higher for December and January.

Meanwhile, the European shares too provided required impetus to local equity markets. European shares rose early on Wednesday to reach fresh 33-week highs, led by financials as the US Federal Reserve improved its economic outlook for the world's largest economy and said most US banks had passed its stress tests.

Back on the home turf, the BSE Sensex gained 127.08 points or 0.71% and settled at 17,940.70. The index touched a high and a low of 18,040.69 and 17,837.22 respectively. 21 stocks advanced against 8 declining ones while 1 stock remained unchanged on the index (Provisional). The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1397:1503 while 151 scrips remained unchanged. (Provisional)

The BSE Mid-cap index gained 0.35% while Small-cap index was down by 0.29%. (Provisional)

On the BSE Sectoral front, Bankex up 2.12%, Capital Goods up 1.87%, PSU up 1.39%, Power up 1.18% and FMCG up 1.03% were the top gainers while Realty down 0.98%, IT down 0.69%, TECk down 0.51%, Consumer Durables down 0.13% and Metal down 0.07% were the only losers.

The top gainers on the Sensex were L&T up 2.82%, NTPC up 2.80%, ICICI Bank up 2.75%, Hindalco Industries up 2.23% and M&M up 2.21%.

On the flip side, TCS down 3.54%, Wipro down 1.62%, DLF down 1.23%, Tata Steel down 1.05% and Bajaj Auto down 0.97% were the top losers in the index. (Provisional)

Meanwhile, the government is most likely to overshoot its targeted fiscal deficit of 4.6% of GDP this fiscal and should be near the 5.7-5.8% mark as estimated by Federation of Indian Chambers of Commerce and Industry (FICCI). Further it may be around the 5.2% mark in the next fiscal.

As per FICCI, the estimates are based on detailed government revenue expenditure trends. It has predicted the government might have to resort to some one time revenue mobilization if it wants to bring the deficit below 5% in the next fiscal. The government can hope to increase its one time revenues through inflows from 2G /4G. It has also advised the government to increase its tax rate and also bring agricultural income under the tax bracket to increase its revenue receipts.

It has further estimated that a revenue mobilisation of around Rs 40,000 - Rs 50,000 crore and more can bring down the fiscal deficit from 5.2% to below 5% in next fiscal. Finance Minister Pranab Mukherjee will present the Union Budget for 2012-13 fiscal on March 16. The upcoming budget is likely to be a challenge in terms of falling revenue receipts, inelastic expenditure and a stubborn fiscal deficit. Combined with this will be the challenge of reviving the economy in a sluggish world scenario.   India VIX, a gauge for market’s short term expectation of volatility lost 0.12% at 24.72 from its previous close of 24.75 on Tuesday. (Provisional)

The S&P CNX Nifty gain 35.45 points or 0.65% to settle at 5,464.95. The index touched high and low of 5,499.40 and 5,437.80 respectively. 30 stocks advanced against 20 declining ones on the index. (Provisional)

The top gainers on the Nifty were PNB up 5.30%, Axis Bank up 2.71%, NTPC up 2.63%, BPCL up 2.56% and L&T up 2.56%.On the other hand, TCS down 3.55%, JP Associates down 3.35%, Reliance Communications down 1.60%, Tata Steel down 1.34% and Wipro down 1.26% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 0.74%, Germany's DAX up 0.98% and Britain’s FTSE 100 up 0.38%.

Buoyed by positive economic data from US, most of the Asian equity indices continued their northward journey for yet another day on Wednesday. The US retail sales for February, which rose at their fastest pace in five months, and positive stress tests for 15 of the 19 largest US banks helped push stocks on Wall Street to multiyear closing highs. Meanwhile, Japanese Nikkei average climbed over 1.5 percent to close above 10,000 level for the first time in seven months as Japanese exporters continued to benefit from the yen’s weakness; Toyota Motor advanced 2.3 percent and Sony jumped 4.7 percent. However, Hong Kong pared most of its early gains and was down by 0.15 percent on Wednesday while Shanghai fell 2.63 percent after Chinese Premier Wen Jiabao warned of a risk of a property bubble, denting hopes of an easing of tight real estate rules.