Post Session: Quick Review

Wednesday proved to be a handy day of trade for Indian equity benchmarks where frontline gauges wiped off  entire early losses to end not only with a gain of over three fourth of a percent but also regained their crucial 7,100 (Nifty) and 23,300 (Sensex) bastions, as traders went for bargain hunting amid firm European cues. Initially, markets exhibited some jerky movement lacking any major supportive cues. Traders remained concerned with exporters body FIEO’s observation after exports fell for the 14th month in a row, that the country may end up with outbound shipments of $260 billion in 2015-16, sharply lower than the $ 310.5 billion mark achieved in the previous fiscal. Market participants also remained wary as global crude oil prices continue to remain volatile after the world’s largest oil producers Russia and Saudi Arabia dampened prospects of a supply cut by deciding to freeze oil output.

Key gauges reversed momentum and entered into green terrain in last leg of trade as investors opted to buy beaten down but fundamentally strong stocks. Some support came with Union Commerce and Industry Minister Nirmala Sitharaman’s statement that that the FDI inflows in the country are improving day by day and more and more investments are coming from sectors other than IT and ITeS.

Firm opening in European counters too aided sentiments. CAC, DAX and FTSE were trading with gains of over a percent in early deals, as investors looked forward to less volatile trading, a day after world stocks recorded one of their biggest rallies in years and oil prices swung in a 10 percent range. Investors cheered the latest earnings reports, chief among them French bank Credit Agricole’s promise of stable investor returns and a solid capital base. Asian markets ended mostly in red after an oil output freeze by Saudi Arabia and Russia disappointed investors.

Closer home, gains remained capped upto certain extent as rupee fell to near record lows against the dollar on Wednesday, forcing the Reserve Bank of India (RBI) to intervene to stem further falls on a tough day for Asian currencies. Reports that overseas investors sold $164.83 million of shares on February 15, taking this year's outflow to $2.3 billion, too limited upside. Meanwhile, banking stocks remained under pressure after the Standard & Poor's Ratings Services has said that Capital requirements of PSU banks for provisioning of bad loans are likely to shoot up exposing them to possible downgrades. It said that PSU lenders are in a weaker position on the capitalisation front than their private sector peers and may find it difficult to raise capital given their weak performance

The NSE’s 50-share broadly followed index Nifty surged by over sixty points to end above the psychological 7,100 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex gained by around one hundred and ninety points to finish near its psychological 23,400 mark. Broader markets too traded in-line with benchmarks and ended the session with a gain of around quarter a percent.

The market breadth remained in favor of decliners, as there were 1,127 shares on the gaining side against 1,421 shares on the losing side while 148 shares remain unchanged. (Provisional)

The BSE Sensex ended at 23381.87, up by 189.90 points or 0.82% after trading in a range of 22920.84 and 23434.91. There were 22 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.47%, while Small cap index up by 0.21%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 1.57%, Energy up by 1.41%, Oil & Gas up by 1.40%, Industrials up by 1.28% and Auto up by 1.03%, while Consumer Durables down by 2.34%, Bankex down by 0.23% and Finance down by 0.07% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Adani Ports & Special up by 5.84%, Dr. Reddys Lab up by 4.19%, Tata Motors up by 3.46%, Sun Pharma up by 3.37% and Tata Steel up by 2.86%. On the flip side, ICICI Bank down by 2.62%, Lupin down by 1.97%, Coal India down by 1.79%, Cipla down by 0.94% and Axis Bank down by 0.48% were the top losers. (Provisional)

Meanwhile, with a view to bring interest on small savings in line with market rates, the government has slashed interest rate on short-term post office saving deposits by 0.25 percent. This advantage has been withdrawn with effect from April 1, 2016 and henceforth the rates would be revised every quarter and would be decided on the 15th of the preceding month. Besides, the compounding of interest, which is biannual in the case of 10-year National Saving Certificate, 5-year National Saving Certificate and KVP, shall be done on an annual basis from April 1. The Finance Ministry said that small saving interest rates are perceived to limit the banking sector’s ability to lower deposit rates in response to the monetary policy of the Reserve Bank of India. This move would help the economy move to a lower overall interest rate regime eventually and thereby help all, particularly low-income and salaried classes.

Besides, Sukanya Samriddhi Yojana, Senior Citizen Savings Scheme and the Monthly Income Scheme (MIS) which command 0.75 per cent, 1 per cent and 0.25 per cent higher interest rate respectively than G-secs will remain untouched as they are linked to social security goals. Similarly, long-term instruments such as 5-year term deposit and similar tenure National Saving Certificates as well as Public Provident Fund (PPF) have been left unchanged. Currently, PPF deposits get 8.7 per cent interest rate while girl child scheme Sukanya Samriddhi Yojana commands 9.2 per cent. MIS gets 8.4 per cent interest rate.

At present Post office savings of 1, 2 and 3 year term deposits, Kisan Vikas Patra (KVP) as well as 5-year Recurring Deposits till now earned 0.25 per cent higher interest than the Government securities of similar tenures.

The government has also permitted pre-mature closure of PPF accounts in genuine cases, like cases of serious ailment, higher education of children. This shall be permitted with a penalty of 1 per cent reduction in interest payable on the whole deposit and only for the accounts having completed five years from the date of opening.

The CNX Nifty ended at 7108.45, up by 60.20 points or 0.85% after trading in a range of 6960.65 and 7123.70. There were 37 stocks advancing against 13 stocks declining on the index. (Provisional)

The top gainers on Nifty were Adani Ports & Special up by 6.06%, Bank of Baroda up by 5.69%, Vedanta up by 4.27%, BPCL up by 3.99% and Dr. Reddys Lab up by 3.68%. On the flip side, ICICI Bank down by 2.98%, Yes Bank down by 1.84%, Coal India down by 1.60%, Lupin down by 1.15% and Cipla down by 0.94% were the top losers. (Provisional)

European markets were trading in green; France’s CAC surged 58.23 points or 1.42% to 4,168.89, UK’s FTSE 100 increased 70.21 points or 1.2% to 5,932.38 and Germany’s DAX was up by 120.36 points or 1.32% to 9,255.47.

Asian markets ended mostly lower on Wednesday after two sessions of solid gains, while oil prices swung higher as the market reconsidered the chances of a meaningful deal to restrict supply later in the year. Japanese stocks fell in choppy trade as the yen broke from its fragile weakening trend against the US dollar after a rebound in crude oil prices fizzled and revived demand for the safe-haven Japanese currency. Chinese shares hit a fresh three-week high, as demand for infrastructure shares helped the market maintain a rebound fuelled by economic stimulus hopes after media reports suggested that the National Development and Reform Commission plans to offer 400 billion yuan ($61 billion) this quarter to fund local government's infrastructure projects.