Markets hold firmly into positive territory; Nifty above 7000 mark

Local equity markets continue to hold fairly firm into positive territory with gains of over half a percent, which has lifted both Sensex and Nifty above psychologically crucial 23,100 and 7,000 levels respectively, on account of buying in frontline blue chip counters, taking cues from Asian counterparts. 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 talks about inflation, saying that the increase in wages from the rollout of the 7th Pay Commission will have little impact on prices. Meanwhile, investors remained cautious on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 1466 crore on February 25, 2016. Besides, depreciation in rupee against dollar also weighed down sentiments. Indian rupee gave up its initial gains against the dollar and was trading down by 5 paise at 68.77 due to month-end demand for the greenback from importers.

On the global front, Asian markets edged higher tracking sharp overnight gains on Wall Street, while recovery in global crude oil prices also aided sentiment. Investors were reassured by pledges from China's central bank governor not to devalue the yuan for the sake of export competitiveness. Meanwhile, a late surge pushed U.S. stocks sharply higher Thursday, propelled by a recovery in energy companies and bank stocks, which have been hit hard this year.  Back home, stocks from Banking, PSU and Metal counters were supporting the markets’ uptrend, while those from Auto counters were adding to the underlying cautious undertone. In scrip specific development, shares of Rashtriya Chemicals & Fertilisers have surged after the company’s board approved acquisition of minority stake in Food Corporation of India's Sindri unit. Furthermore, United Spirits has gained after Vijay Mallya agreed to resign from his post of chairman and non-executive director of the company.

The market breadth on BSE was negative, out of 2370 stocks traded, 886 stocks advanced, while 1333 stocks declined on the BSE. 

The BSE Sensex is currently trading at 23103.87, up by 127.87 points or 0.56% after trading in a range of 23021.94 and 23227.91. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in mix; the BSE Mid cap index was up by 0.17%, while Small cap index was down by 0.60%.

The top gaining sectoral indices on the BSE were Bankex up by 1.24%, PSU up by 0.88%, Metal up by 0.81%, Capital Goods up by 0.72% and FMCG up by 0.60%, while Auto down by 0.33% was the only losing index on BSE.

The top gainers on the Sensex were Coal India up by 3.32%, SBI up by 3.00%, Axis Bank up by 2.40%, Larsen & Toubro up by 1.71% and Mahindra & Mahindra up by 1.31%. On the flip side, Bajaj Auto down by 3.70%, Hero MotoCorp down by 3.05%, Bharti Airtel down by 1.25%, Tata Steel down by 1.09% and Lupin down by 1.03% were the top losers.

Meanwhile, extending the ambit of direct benefit transfer, the government is planning to transfer the fertilizer subsidy directly to the farmer’s account. A Parliamentary Standing Committee report has stated that the department of fertiliser (DoF) is working closely with the mission Direct Benefits Transfer (DBT) to implement it in fertilizers. It is working on a road map to capture the details of farmers, so that sales data can be captured and subsidy can be transferred to farmers’ accounts directly. The government will conduct a pilot project in 20 districts for direct transfer of subsidy on phosphoric and potassic fertilisers to the farmers. It has been reported that districts of Gujarat and Odisha are being selected to go for the pilot project.

In the current financial year 2015-16, the government has allocated about Rs 73,000 crore for the fertiliser subsidy. Out of the total for domestic urea the government has allocated Rs 38,200 crore and for imported urea Rs 12,300 crore. However, the remaining amount has been set aside for sale of decontrolled phosphoric and potassic fertilisers.

In April 2010, government had decontrolled phosphatic and potassic fertilisers, allowing manufacturers to fix their maximum retail price and get a fixed subsidy. At present, the subsidy is Rs 12,350 a tonne for phosphates and Rs 9,300 a tonne for potash. However, there is a growing view within the government that direct transfer of benefits to farmers would allow for sustainable and measured use of chemical fertilizers.

The CNX Nifty is currently trading at 7011.70, up by 41.10 points or 0.59% after trading in a range of 6985.10 and 7052.90. There were 29 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Coal India up by 3.42%, SBI up by 3.19%, Axis Bank up by 2.74%, Kotak Mahindra Bank up by 2.01% and HCL Tech up by 1.89%. On the flip side, Bajaj Auto down by 3.12%, Hero MotoCorp down by 2.77%, Idea Cellular down by 1.69%, Grasim Industries down by 1.50% and GAIL India down by 1.33% were the top losers.

Asian markets were trading in green; KOSPI Index was up by 0.08%, Shanghai Composite up by 1.27%, FTSE Bursa Malaysia KLCI up by 0.25%, Taiwan Weighted up by 0.54%, Jakarta Composite up by 1.02%, Nikkei 225 up by 0.3% and Hang Seng was up by 1.6%.