Benchmarks add quarter percent gain; Nifty recaptures 7,200 mark

Indian equity benchmarks ended the choppy day of trade with gain of around a quarter percent on Friday with frontline gauges recapturing their crucial 23,700 (Sensex) and 7,200 (Nifty) levels. Traders took some encouragement with Moody's Investors Services’ report that Indian economy will grow at 7.5 percent 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 in from report that foreign portfolio investors (FPIs) bought shares worth a net Rs 419 crore on February 18, 2016. However, investors remained cautious with the report that Oil prices has reversed earlier gains on Thursday following a rise in US stockpiles but look set to post their first rise in three weeks after the battered market took heart from a tentative deal by major producers to freeze output at January highs. Meanwhile, Fitch Ratings stated that many PSU banks’ profitability taking a big hit, their credit profile will come under pressure unless they are adequately capitalized. It pointed to significant quarterly losses at several large public sector banks (PSBs) last week, underscoring long-standing balance-sheet and capital risks stemming from legacy issues pertaining to poor asset quality and weak provisioning.

On the global front, Asian markets slipped from near three-week highs on Friday, as a rally in oil prices reversed and investors remained cautious about the outlook for the global economy. OECD cut its global growth forecasts and the minutes of the European Central Bank's January meeting showed growth and inflation risks are on the rise in the euro area, weighing down Asian shares. European markets trading mixed, trimmed weekly gains, as investors assessed corporate earnings amid renewed concerns about global growth. Banks, miners and energy shares slid, with the Stoxx Europe 600 Index following oil lower after a report showing US crude inventories advanced to an 86-year high.

Back home, after getting a gap down opening, Indian benchmark indices recovered from the day’s low and continued trade around neutral line for most part of the session, though some sharp selling was witnessed in noon session, which pushed the indices to lower levels, but final hour buying followed by some short covering, helped the indices to end session above neutral line. Eventually the NSE’s 50-share broadly followed index Nifty, settled with the gains of over a quarter percent above the crucial 7,200 support level, while Bombay Stock Exchange’s Sensitive Index Sense added fifty nine points and closed above the psychological 23,700 mark. On the BSE sectoral space, the Auto counter remained the top gainer in the space with around a percent gains followed by the TECK pocket which gained over half a percent. On the flipside, the Oil & Gas and Capital Goods sectors languished at the bottom of the table with losses of 1% and 0.16% respectively, being the only laggards in the space. The market breadth remained in favour of advance, as there were 1302 shares on the gaining side against 1204 shares on the losing side, while 136 shares remained unchanged.

Finally, the BSE Sensex gained 59.93 points or 0.25% to 23709.15, while the CNX Nifty added 19 points or 0.26% to 7,210.75. 

The BSE Sensex touched a high and a low 23735.35 and 23448.21, respectively. The broader indices made a mixed closing; the BSE Mid cap index ended down by 0.12%, while Small cap index gained 0.16%

The top gaining sectoral indices on the BSE were Auto up by 0.87%, TECK up by 0.56%, Power up by 0.41%, IT up by 0.40% and Bankex up by 0.33%, while Oil & Gas down by 1% and Capital Goods down by 0.16% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 3.20%, SBI up by 3.20%, Asian Paints up by 2.17%, Bajaj Auto up by 2.14% and NTPC up by 1.84%. On the flip side, Maruti Suzuki down by 2.02%, BHEL down by 1.83%, Coal India down by 1.50%, Axis Bank down by 1.37% and Dr. Reddys Lab down by 1.06% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has rejected the Non Banking Financial Companies' (NBFCs) plea for undertaking the point of presence (POP) services for National Pension System (NPS). NBFCs had sought the central bank's approval for undertaking such services under the Pension Fund Regulatory and Development Authority for NPS. The central bank has examined the proposals and it has been decided, in public interest that NBFCs shall not undertake point of presence services for National Pension System.

The pension scheme is distributed through authorized entities called points of presence (POP) and almost all the banks are enrolled to act as POP. They are the first points of interaction of the pension subscriber with the NPS architecture under the Pension Fund Regulatory and Development Authority. The authorized branches of a POP, called point of presence service providers (POPSP), act as collection points and extend a number of customer services to NPS subscribers.

With an aim to provide financial security to every citizen by encouraging them to start contributing towards the old age saving, the NPS has been launched. The National Pension System, regulated by PFRDA is an attempt towards providing adequate retirement income to every citizen of India. NPS means the contributory pension system whereby contributions from subscribers along with matching contributions from respective governments as an employer, are collected and accumulated in an individual pension account.

The CNX Nifty touched a high and low 7,226.85 and 7,145.95 respectively. 

The top gainers on Nifty were PNB up by 4.83%, State Bank of India up by 3.19%, Hero MotoCorp up by 3.14%, Bosch up by 3.02% and Asian Paints up by 2.48%. On the flip side, BPCL down by 3.22%, Maruti Suzuki down by 2.41%, BHEL down by 1.93%, Vedanta down by 1.91% and Coal India down by 1.70% were the top losers.

European markets were trading mostly in red; Germany’s DAX decreased 22.6 points or 0.24% to 9,441.04 and France’s CAC was down by 0.59 points or 0.01% to 4,239.17, while UK’s FTSE 100 was up by 4.81 points or 0.08% to 5,976.76.

Asian markets ended mostly lower on Friday, as a rally in oil prices reversed. The Organisation for Economic Co-operation and Development (OECD) cut its global growth forecasts and the minutes of the European Central Bank's January meeting showed growth and inflation risks are on the rise in the euro area, too weighed on Asian shares. Japanese shares ended lower on the yen's appreciation that triggered selling of export-linked issues amid weak sentiments brought by declines in the overnight US market. China's shares inched down as the People's Bank of China said it would intervene daily to influence the money supply. Hong Kong stocks tracked global markets lower as energy shares pulled back.