Local market end the range bound day of trade on a positive note

Monday’s trading session was clearly of consolidation as the Indian frontline equity indices appeared a bit fatigued and remained in tight band throughout the day. Nevertheless, the benchmarks managed to extend the winning momentum for the fourth consecutive day of trade as local sentiments continued to show signs of improvement. Traders took some encouragement with the Economic Affairs Secretary Shaktikanta Das’s statement that the Union Budget 2016-17 will try to address the key challenges of the economy and give an impetus to growth. He also added that the government is committed to not only maintain the 7.6 per cent growth but also improve it. Higher growth will lead to job creation, more economic activities and development.  Furthermore, some encouragement also spread by Finance Ministry with the proclamation that the quality of government expenditure has improved significantly in the current fiscal and is resulting in high growth. According to CGA data, it was 74.4 per cent of Budget Estimate at the end of December, as compared to 61.3 per cent a year ago. However, market participants remained cautious with the report that overseas investors have pulled out a massive Rs 4,600 crore from the Indian capital markets this month so far, primarily on account of continuous fall in crude oil prices and fears of a global slowdown. Meanwhile, all eyes would be on the Budget session of Parliament that will be commencing on February 23 and will focus largely on the financial business of the government. The Rail Budget will be unveiled on Thursday, economic survey on Friday and the Union Budget next Monday.

On the global front, Asian share markets ended mostly higher, extending last week’s gains, as Investors are hoping this week's meeting of finance ministers from the Group of 20 major rich and developing economies will spur moves to shore up global growth. Sentiments also improved in the region along with China shares, which jumped as investors welcomed Beijing’s decision to replace the top securities regulator and on signs that the government was stepping up its economic stimulus efforts. European shares rose on Monday, with gains in miners underpinning the market and investors shrugging off worries about Britain's potential exit from the European Union.

Back home, the benchmark got off to a soft start as the indices showed signs of consolidation in early trade. But the frontline indices slowly started gathering steam and surged by around quarter a percent by late morning trades. But the indices failed to capitalize on the initial momentum and continued to trade in a tight range for most part of the day. Eventually the NSE’s 50-share broadly followed index Nifty, settled with the gains of over a quarter percent below the crucial 7,250 support level, while Bombay Stock Exchange’s Sensitive Index Sensex ended with gains of around eighty points, above the psychological 23,750 mark. On the BSE sectoral space, the Oil & Gas counter remained the top gainer in the space with around a percent gains followed by the Realty pocket which gained over half a percent.  Fertilizer, Cement and railway shares saw buying interest on anticipation of higher spending on these sectors in the forthcoming budget. On the flipside, the Power and IT sectors languished at the bottom of the table with losses of 0.33% and 0.27% respectively. The market breadth remained in favour of advance, as there were 1390 shares on the gaining side against 1158 shares on the losing side, while 153 shares remained unchanged.

Finally, the BSE Sensex gained 79.64 points or 0.34% to 23788.79, while the CNX Nifty added 23.80 points or 0.33% to 7,234.55. 

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 0.75%, while Small cap index gained 0.46%

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.97%, Realty up by 0.71%, Metal up by 0.56%, Bankex up by 0.49% and FMCG up by 0.48%, while Power down by 0.33%, IT down by 0.27% and TECK down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 4.02%, Sun Pharma Inds. up by 2.16%, Asian Paints up by 2.01%, Reliance Industries up by 1.90% and Lupin up by 1.57%. On the flip side, NTPC down by 2.05%, ITC down by 1.72%, Maruti Suzuki down by 1.61%, Adani Ports &Special down by 1.39% and GAIL India down by 1.29% were the top losers.

Meanwhile, with a view to attract more overseas inflows, the government is contemplating a proposal to permit 49 percent Foreign Direct investments (FDI) via automatic route in the insurance sector. The government could announce this decision in the forthcoming Budget. This move would help in improving ease of doing business.

Currently, FDI as much as 26% is permitted by means of automatic approval route. For FDI as much as 49%, the approval of FIPB is required. Apart from Insurance Regulatory and Development Authority (IRDAI), RBI is also looking at and the management is in the hands of Indian then the government may do away with the FIPB approval route. At present, there are 52 insurance companies operating in India, of which 24 are in the life insurance business and 28 in the general insurance. State-owned General Insurance Corporation (GIC), in addition, is the sole national reinsurer.

India has received $4.5 billion foreign direct investment (FDI), recording a whopping 114 percent growth during December 2015 which was more than double against the same period in 2014. During the period, the sectors which attracted FDI include computer software and hardware, trading, services, automobile and telecommunications. India receives maximum FDI from Singapore, Mauritius, the Netherlands and Japan.

The CNX Nifty touched a high and low 7,252.40 and 7,200.70 respectively. 

The top gainers on Nifty were Hindustan Unilever up by 3.67%, Bosch up by 3.10%, Ultratech Cement up by 2.54%, Sun Pharma up by 2.22% and Asian Paint up by 2.04%. On the flip side, Tech Mahindra down by 2.16%, NTPC down by 2.16%, ITC down by 1.82%, Gail down by 1.67% and Adani Ports &Special down by 1.60% were the top losers.

European markets were trading in green; France’s CAC surged 65.93 points or 1.56% to 4,288.97, UK’s FTSE 100 increased 71.34 points or 1.2% to 6,021.57 and Germany’s DAX was up by 156.86 points or 1.67% to 9,544.91.

Asian markets ended mostly higher on Monday, extending last week's advance, as the yen weakened after the release of disappointing manufacturing data, oil prices stabilized and investors welcomed news over the weekend that China's top securities regulator has been replaced. China stocks ended higher, led by property and resources shares, as investors welcomed Beijing's decision to replace the top securities regulator and on signs the government was stepping up its economic stimulus efforts. China removed the head of its securities regulator, Xiao Gang, and replaced him with Liu Shiyu, a veteran of China's central bank and chairman of Agricultural Bank of China, to oversee the world's second-largest stock market in the wake of last summer's slump that saw Xiao blamed for mismanagement. Japanese shares reversed early declines, as the yen's retreat helped investors shrug off disappointing manufacturing data. Activity in Japan's manufacturing activity slowed sharply in February as new export orders contracted at the fastest pace in three years, a preliminary report from Nikkei revealed with a PMI score of 50.2, down from January's final reading of 52.3.