Post Session: Quick Review

Buying activity which took place during second half of trade mainly drove the markets higher and key domestic benchmarks managed to keep their head above on Friday, as investors opted to buy beaten down but fundamentally strong stocks after four continuous days of drubbing. After making a positive start markets soon languished into red, as investors opted to stay away from risky assets ahead of Consumer Price Index (CPI) and Index of Industrial Production (IIP) data scheduled to be released later in the day. Markets magnified losses and even went on to test important psychological 22,600 (Sensex) and 6,900 (Nifty) levels, but the key gauges got some support near those intraday low levels as they made spectacular recovery from thereon to end up with marginal gains.

Some support came in with Reserve Bank of India (RBI) Governor Raghuram Rajan’s statement that the ongoing clean-up of bank balance sheets will help spur economic growth and improve the lenders’ profitability. He has also said that while the profitability of some banks may be impaired in the short-run, the system, once cleaned, will be able to support economic growth in a sustainable and profitable way. Also, the RBI assured banks that it would inject adequate cash in view of the tight liquidity conditions in the market.

Firm opening in European counters too provided some support to domestic markets. CAC, DAX and FTSE all were trading with a gain of around one and a half percent in early deals, rebounding from the previous session's steep losses, with encouraging results from Commerzbank and a rally in oil prices helping banks and commodity-related stocks to regain ground. However, Asian markets ended mostly in red as mounting concerns over the health of European banks further threatened a global economic outlook already under strain from falling oil prices and slowdown in China and other emerging markets.

Back home, recovery in Indian rupee too aided sentiments. The rupee appreciated by 8 paise to trade at 68.22 against the dollar at the time of equity markets closing at the Interbank Foreign Exchange market. Some support also came after Union Finance Minister Arun Jaitley assured markets that banks are suitably equipped to deal with the issue of non-performing assets (NPAs). He also added that the government is committed to helping banks with capital infusion.

Auto counters ended higher despite report that domestic passenger car sales fell for the first time in 15 months after logging a marginally dip to 1,68,303 units in January as against 1,69,527 units in the year-ago period. However, banking stocks continued their southward journey for yet another day after State Bank of India (SBI) and Punjab National Bank (PNB) reported weak set of Q3 numbers. Meanwhile, shares of newly-listed company, TeamLease Services, got good response from market participants as it ended with a gain of over 21% as against its initial public offer (IPO) price of Rs 850 per share on the bourses.

The NSE’s 50-share broadly followed index -- Nifty -- rose marginally to hold the psychological 6,950 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- increased by over thirty points to finish near the psychological 23,000 mark. However, broader markets underperformed benchmarks and ended the session with a cut of around a percent.  The market breadth remained in the favour off decliners, as there were 881 shares on the gaining side against 1,699 shares on the losing side while 133 shares remain unchanged. (Provisional)

The BSE Sensex ended at 22986.12, up by 34.29 points or 0.15% after trading in a range of 22600.39 and 23161.15. There were 15 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.78%, while Small cap index down by 1.21%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 5.56%, Auto up by 1.72%, TECK up by 1.02%, Utilities up by 0.61% and FMCG up by 0.39% while, Capital Goods down by 3.05%, Oil & Gas down by 2.47%, PSU down by 1.63%, Realty down by 1.26% and Metal down by 1.25% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors up by 8.34%, Bharti Airtel up by 5.40%, Mahindra & Mahindra up by 3.77%, Axis Bank up by 3.52% and NTPC up by 2.44%. On the flip side, BHEL down by 13.13%, Adani Ports &Special down by 5.20%, ONGC down by 4.56%, Larsen & Toubro down by 3.53% and Tata Steel down by 3.18% were the top losers. (Provisional)

Meanwhile, the government is set to align interest rates on small savings schemes with market rates and revise them on a quarterly basis, effective from April 1. Economic Affairs Secretary Shaktikanta Das has said that the decision has been taken and the executive order and notification will be issued in a day or two. Currently, Small savings rates are linked to government securities’ interest rates which are readjusted every year.

Das further said that the alignment of interest rates of the schemes will be done with G-sec rates of comparable maturities and added that the interest rate reduction would mostly affect schemes at the lower end of the maturity curve. The rates under the girl child scheme Sukanya Samriddhi Yojana and the senior citizen scheme will remain unaltered. Besides he said that whatever spreads they have over the G-Sec rates will not be altered. Similarly, all long term savings more than five years will continue to have the existing spreads.

Das further said that the Finance Ministry has finalized suggestions that were made by various stakeholders, including banks and other ministries and brought it up during the pre-budget meetings with country’s top banks and leading economists suggesting changes in the small savings rate.

At present, the returns on small savings schemes are benchmarked to the yield on government securities. Small savings schemes include the National Savings Scheme, Kisan Vikas Patra, post office deposits, and Public Provident Fund. The interest rates for these schemes range from 8.4 per cent for a one-year deposit to 9.3 per cent for the five-year Senior Citizen Savings Scheme.  Earlier, on Sept 29, following the rate cut by Reserve Bank of India,  Finance Minister Arun Jaitley had announced that the centre would review small savings schemes to enable transmission of the central bank’s rate cut by banks.

The CNX Nifty ended at 6980.95, up by 4.60 points or 0.07% after trading in a range of 6869.00 and 7034.80. There were 24 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were Idea Cellular up by 8.40%, Tata Motors up by 7.96%, Bharti Airtel up by 5.13%, Cairn India up by 4.07% and Axis Bank up by 3.69%. On the flip side, BHEL down by 13.14%, BPCL down by 5.50%, ONGC down by 4.87%, Adani Ports &Special down by 4.71% and PNB down by 4.41% were the top losers. (Provisional)

European markets were trading in green; France’s CAC increased 52.37 points or 1.34% to 3,949.08, UK’s FTSE 100 surged 89.03 points or 1.61% to 5,626.00 and Germany’s DAX was up by 120.06 points or 1.37% to 8,872.93.

Asian markets ended mostly lower on Friday as concerns about the health of European banks further threatened a global economy already under strain from falling oil prices and slowdowns in China and other emerging markets. Japanese shares stumbled to a fresh 16-month low in heavy trade and posted the biggest weekly drop since 2008 as investors scrambled to dump risky assets after the dollar dived to a 15-month low against the yen. The markets in China and Taiwan remained closed for the Lunar New Year holiday.