Benchmarks extend winning streak for second straight session

Extending their winning streak for the second day in a row, Indian equity benchmarks ended the session with a gain of over a percent on Thursday. It turned out to be a rather volatile day of trade as the indices rebounded after drifting to lower levels in the noon session and sustained position build up was witnessed across the board. Sentiments got a boost after global ratings agency Moody's Investors Service rehashed faith in the Indian economy. According to agency, country’s economy will grow at 7.5% in 2016 and 2017 as it is relatively less exposed to external headwinds, like China slowdown, and will benefit from lower commodity prices.  Some support also came with the report that India's current account deficit (CAD), is likely to narrow to 0.7 per cent of GDP in the current financial year from 1.3 per cent in FY'15. However, investor remained cautious with the report that foreign Institutional Investors (FIIs) continued their selling spree as they sold net Rs 560 crore on February 17, 2015.

On the global front, Asian markets ended in green on Thursday as crude oil prices advanced on hopes that the big oil producers will cap the output in order to tackle the supply glut. Chinese stocks ended higher, as investors expect Beijing to unveil fresh stimulus to support the slowing economy, while Japan’s Nikkei gained, shrugging off bigger-than-expected declines in exports and imports in January. Meanwhile, European stocks wobbled on Thursday, trying to find a steady footing after hitting their best level this month, on account of some disappointing company results and weakness in miner’s shares.

Back home, the benchmark got off to a rollicking opening as investors rejoiced after crude oil prices extended gains on hopes that big producers will cap production. Sentiment was also buoyed by a rise on Wall Street, where U.S. shares advanced for the third straight day, helped by some recovery in oil prices and encouraging economic data. The indices in no time climbed to intraday highs and traded around the psychological 23,700 (Sensex) and 7,200 (Nifty) levels through the morning trades. But the optimism soon started showing signs of easing and profit booking in few sectors and mixed trade in European markets weighed down the local bourses. Yet, final hour buying ensured that the key indices not shut shops near the intraday highs. Eventually the NSE’s 50-share broadly followed index Nifty, convalesced by over a percent to settle below the crucial 7,200 support level while Bombay Stock Exchange’s Sensitive Index, Sensex accumulated over two hundred and fifty points and closed below the psychological 23,650 mark. Moreover, the broader markets too participated in the rally and closed with gains of over half percent.

On the BSE sectoral space, hefty buying was evident across the board as not even a single sectoral index went home in the negative territory. Investors piled up hefty positions in IT counter which rocketed by around two percent, while the Capital Goods index too moved higher by over one and half percent. Meanwhile, shares of oil exploration & production companies such as Cairn India, ONGC and Oil India surged after witnessing a sharp surge in global crude oil prices, while Railway related companies rallied after the reports that cabinet committee on economic affairs approved construction of six railway lines and a railway bridge. Good buying was also observed in pharma stocks on report that department of Pharmaceuticals under the Ministry of Chemicals and Fertilizers is expected to come out with a new bulk drug policy in less than a month with an objective to grow the Indian pharmaceuticals sector to a $200 billion industry by 2030.

The market breadth remained in favour of advance, as there were 1421 shares on the gaining side against 1114 shares on the losing side, while 148 shares remained unchanged.

Finally, the BSE Sensex surged by 267.35 points or 1.14% to 23649.22, while the CNX Nifty rose 83.30 points or 1.17% to 7,191.75. 

The BSE Sensex touched a high and a low 23735.35 and 23448.21, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 0.63%, while Small cap index gained 0.59%

The top gaining sectoral indices on the BSE were IT up by 1.94%, TECK up by 1.90%, Capital Goods up by 1.59%, FMCG up by 1.52% and Oil & Gas up by 1.22%, while there were no losers on BSE sectoral space.

The top gainers on the Sensex were Dr. Reddys Lab up by 4.52%, ONGC up by 4.50%, Hero MotoCorp up by 3.85%, ICICI Bank up by 2.83% and Lupin up by 2.68%. On the flip side, Maruti Suzuki down by 2.53%, Asian Paints down by 2.09%, BHEL down by 1.84%, Axis Bank down by 1.39% and Reliance Industries down by 1.19% were the top losers.

Meanwhile, the Ministry of Mines has finalized a draft National Mineral Exploration Policy (NMEP) which has outlined a slew of measures for accelerating mineral exploration in the country. The policy has proposed to select the private explorer through a competitive bidding process conducted through an electronic auction.  It further proposed that private entities would be engaged to carry out regional and detailed exploration work with the right to a certain share in revenue from mining operation after the electronic auction of the mineral block discovered by the private explorer.

Moreover, the draft of the NMEP proposed to allow private companies to carry out exploration of mineral bearing areas in return for a share of the royalty given to state governments. The share of revenue to the state governments will be paid by way of royalty which would be accruing. However, the decision on whether the revenue share would be paid in form of a lumpsum or annuity through the lease period of the mine has been kept open-ended.

Meanwhile, Mines Minister Narendra Tomar has launched the Geological Survey of India’s ‘Uncover’ project. The project will be implemented in two selected areas of the country and is focused on probing for deep seated or concealed mineral deposits. The Geological Survey of India has identified 100 blocks covering 12,000 sq km which can be given to private explorer. The blocks have prospects of various minerals, including gold, iron, tin/tungsten and other strategic minerals. The Ministry of Mines will take “further action” with regard to handing them over to private explorers.

The CNX Nifty touched a high and low 7,215.10 and 7,127.85 respectively. 

The top gainers on Nifty were Dr. Reddys Lab up by 4.43%, Hindalco up by 4.18%, Cairn India up by 3.69%, ONGC up by 3.62% and Hero MotoCorp up by 3.62%. On the flip side, Maruti Suzuki down by 2.75%, Asian Paints down by 2.45%, BHEL down by 2.32%, Reliance Industries down by 1.62% and Axis Bank down by 1.46% were the top losers.

European markets were trading mostly in green; France’s CAC increased 14.19 points or 0.34% to 4,247.66 and Germany’s DAX was up by 32.9 points or 0.35% to 9,410.11. On the flip side, UK’s FTSE 100 was down by 27.87 points or 0.46% to 6,002.45.

Asian markets ended mostly higher on Thursday, after US stocks posted their biggest three-day gain since August overnight, buoyed by a jump in oil prices, upbeat US industrial production data and signs the Federal Reserve could slow the pace of US interest rate hikes. Minutes from the Federal Reserve's January meeting suggested that participants were concerned about the downside risks posed by the recent tightening of global financial conditions and discussed altering their earlier views of the appropriate path for interest rates, if needed. Japanese shares ended higher, shrugging off bigger-than-expected declines in exports and imports in January. Hong Kong stocks climbed more than 2 percent on Thursday, aided by a surge in energy shares. However, Chinese shares surrendered early gains to end slightly lower as inflation data painted a mixed picture of the economy. While consumer inflation edged up to 1.8 percent last month, fueled by rising food prices ahead of the Lunar New Year, the producer price deflation hit a record long streak in January, declining for the 47th straight month.