Benchmarks snap three-day losing streak; Nifty regains 7000 level

Indian equity benchmarks snapped three-day losing streak as investors opted to buy beaten down but fundamentally strong stocks amid positive global cues. Sentiments got a boost after the Economic Survey said the government will likely meet its FY16 fiscal deficit target of 3.9 percent, while at the same time it also indicated that India's long run potential GDP growth is substantial, about 8 to 10 per cent. Presenting an optimistic picture of Indian economy, Chief Economic Adviser Arvind Subramanian's Economic Survey 2015-16 said that amidst the gloomy landscape of unusual volatility in the international economic environment, India stands as a haven of stability and an outpost of opportunity. The Economic Survey also talked about India's exports, which are in the negative zone since December 2014, and are expected to start picking up from the next fiscal. On the flipside, the survey enumerated three downside risks - turmoil in global economy could worsen the outlook of exports, contrary to expectations oil price rise would increase the drag from consumption and the most serious risk is the combination of these two factors. The survey also expressed concern over approval of GST Bill being elusive so far and the disinvestment programme falling short of targets. Meanwhile, market participants remained cautious on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 1466 crore on February 25, 2016.

On the global front, Asian stocks rose on Friday, as China's central bank chief said Beijing still has enough monetary firepower to keep the world's second-largest economy on track as G20 ministers gathered in Shanghai. But gains were limited as oil prices fell back and G20 financial leaders meeting in Shanghai offered mixed messages over the potential for new stimulus to stave off the risk of recession. Further, European stocks too climbed in early trade, with energy shares spearheading the move as oil prices gained.

Back home, the benchmark started the day on an optimistic note tracking the Asian peers which traded mostly in the green following the upbeat overnight cues from the Wall Street, while recovery in global crude oil prices also aided sentiment. The key indices remained choppy through the morning trades but saw a sudden spurt in buying in early afternoon trades post the Economic Survey 2016 tabled in the Parliament, reinstated confidence in the growth of Indian economy for the next two years. Second half of the session saw the key gauges capitalize on the momentum further and spurt to session’s highest levels in dying hour. However, a mild profit booking in dying moments of trade ensured that the key indices shut shops off the intraday highs. Eventually the NSE’s 50-share broadly followed index Nifty, settled with the gains of over half a percent below the crucial 7,050 support level, while Bombay Stock Exchange’s Sensitive Index Sensex ended with gains of around one hundred and eighty points, above the psychological 23,150 mark. On the BSE sectoral space, the Metal counter remained the top gainer in the space with over one and half percent gains followed by the Banking pocket which gained over a percent. On the flipside, the Consumer Durables and Auto sectors languished at the bottom of the table with losses of 0.16% and 0.08% respectively. The market breadth remained in favour of decliners, as there were 1023 shares on the gaining side against 1424 shares on the losing side, while 190 shares remained unchanged.

Finally, the BSE Sensex gained 178.30 points or 0.78% to 23154.30, while the CNX Nifty added 59.15 points or 0.85% to 7,029.75. 

The BSE Sensex touched a high and a low 23227.91 and 23021.94, respectively. The broader indices made a mixed closing; the BSE Mid cap index ended up by 0.30%, while Small cap index declined by 0.45%

The top gaining sectoral indices on the BSE were Metal up by 1.66%, Bankex up by 1.51%, Realty up by 1.47%, Capital Goods up by 1.12% and FMCG up by 1.06%, while Consumer Durables down by 0.16% and Auto down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 3.96%, SBI up by 2.86%, NTPC up by 2.41%, Larsen & Toubro up by 2.19% and Axis Bank up by 1.81%. On the flip side, Bajaj Auto down by 3.49%, Hero MotoCorp down by 2.41%, Lupin down by 1.73%, Bharti Airtel down by 1.52% and GAIL India down by 0.44% were the top losers.

Meanwhile, ahead of the Union Budget 2016-17, the domestic ratings agency India Ratings has said that the government can achieve 3.5 per cent fiscal deficit target for 2016-17 from spectrum auction amid concerns over the fiscal consolidation roadmap as there is a possibility of government making a windfall gain in its non-tax revenue account in case the spectrum sale takes place in FY17.

India Ratings however said that there is a likelihood of fiscal slippage in the current fiscal to 4.1 per cent as against the targeted 3.9 per cent due to lower than anticipated GDP growth. It said that at an absolute level, the government will be able to get the fiscal deficit at Rs 5.6 lakh crore, but the lower GDP growth will push the number higher in percentage terms.

It said that the Indian industry will also be keenly looking at the fiscal stance of the government, specifically for details on how additional spending can result in more capital investments. Further, it flagged that while capital expenditure increased in FY15's revised estimates, it is still stuck at 1.7 per cent of the GDP and there is a need to push it to 2 per cent.

On the sectoral front, the rating agency said that the infrastructure sector is likely to be a priority in the Union Budget but the government needs to provide alternative avenues for infra funding, an increase in the fund allocation for highways, a framework for revival of stalled projects and a road map for the road regulator. Further for the auto sector the budget may entail a provision for introduction of a 'scrappage' scheme for commercial vehicles and a reduction in excise duty on large cars and SUVs.

The CNX Nifty touched a high and low 7,052.90 and 6,985.10 respectively. 

The top gainers on Nifty were Coal India up by 4.16%, Hindalco up by 3.65%, SBI up by 3.36%, Vedanta up by 3.16% and NTPC up by 2.95%. On the flip side, Bajaj Auto down by 3.57%, Hero MotoCorp down by 2.68%, Lupin down by 1.93%, Bharti Airtel down by 1.26% and IDEA down by 1.08% were the top losers.

European markets were trading in green; UK’s FTSE 100 surged 74.97 points or 1.25% to 6,087.78, France’s CAC soared 86.42 points or 2.03% to 4,334.87 and Germany’s DAX was up by 213.51 points or 2.29% to 9,544.99.

Asian markets ended higher on Friday, as a firmer finish on Wall Street, oil's overnight gains, a weakening yen and soothing comments by Chinese authorities over the state of the economy and chances of more stimulus, helped prop up investor confidence, heading into the G20 finance ministers' meeting in Shanghai. Japanese shares ended higher as the yen retreated to the lower 113 range and tepid consumer price inflation data added pressure on the Bank of Japan to expand its massive monetary stimulus program. Chinese shares ended higher after tumbling as much as 6.4 percent on Thursday on fears of tighter liquidity and the cooling economy. Sentiment received a boost after China's central bank governor Zhou Xiaochuan said the country has more room to cushion the economy and that there is no reason for yuan to fall persistently.