Post Session: Quick Review

Boisterous benchmarks showcased a phenomenal performance on Tuesday, by rallying around three and a half percentage points. Sentiments remained up-beat since start as key bourses opened with huge gap on upside and there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong stocks. Frontline indices not only ended the session near intraday high levels but also recaptured their crucial 7,200 (Nifty) and 23,700 (Sensex) bastions as investors took to hefty across the board buying.

Sentiment remained upbeat after the Union Budget provided a higher outlay for infrastructure and farming sectors. Meanwhile, Bets of a rate cut gained momentum after Finance Minister Arun Jaitley retained FY17 fiscal deficit target at 3.5 per cent of GDP despite increasing expenditure for rural and infrastructure spending. Bringing some cheers for policy makers, the core sectors in the country once again locked themselves into a faster growth trajectory jumped to a three-month high to 2.9% in January 2016 as compared to 0.9% in December 2015, on a back of sharp pick-up in coal, cement and electricity generation. Support also came after Jaitley reiterated his commitment to implement General Anti Avoidance Rules (GAAR) from April 1, 2017, which gave some respite to the FIIs about the clarity. The rules are aimed at minimising tax avoidance for investments made by entities based in tax havens.

Global cues too remained supportive with European markets were trading in green in early deals. Asian markets ended in green after China’s central bank cut further the reserve requirement ratio by 0.5 per cent in an attempt to calm investor jitters.

Closer home, India’s manufacturing sector growth expanded for a second consecutive month in February at a stable pace driven by new orders, exports, output and purchasing activity all rising in the month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) held steady at 51.1 in February, same as January’s reading after it fell below that level in December for the first time in over two years. Appreciation in Indian rupee too aided sentiments. Hardening further for the third straight day, the rupee advanced another 38 paise to 68.04 against the dollar at the time of equity markets closing on sustained selling of the US currency by banks and exporters.

Buying in automobiles space too aided sentiments as the government’s focus on rural incomes and infrastructure development is structurally positive for the sector. Steel stocks remained on buyers’ radar on higher allocation to infrastructure sector in the Union Budget 2016-17. Shares of public sector oil marketing companies (PSU OMCs) edged higher after Indian Oil Corporation (IOCL) announced revision in fuel prices with effect from 1 March 2016. Petrol price was cut by Rs 3.02 a litre and diesel price was increased by Rs 1.47 per litre.

The NSE’s 50-share broadly followed index -- Nifty -- rose by over two hundred and forty points to end above the psychological 7,200 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- jumped by around seven hundred and seventy points to finish above the psychological 23,700 mark. Broader markets too traded with traction and ended the session with a gain of over three percent.

The market breadth remained in favor of advances, as there were 2,010 shares on the gaining side against 591 shares on the losing side while 117 shares remain unchanged. (Provisional)

The BSE Sensex ended at 23779.35, up by 777.35 points or 3.38% after trading in a range of 23133.18 and 23821.49. There were 27 stocks advancing against 3 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 3.04%, while Small cap index up by 3.23%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 4.90%, Consumer Durables up by 4.37%, Realty up by 4.21%, Auto up by 4.19% and Industrials up by 3.86%, while there were no losers on the index. (Provisional)

The top gainers on the Sensex were ITC up by 10.45%, ICICI Bank up by 8.00%, Maruti Suzuki up by 7.83%, Hero MotoCorp up by 6.07% and Adani Ports &Special up by 5.30%. On the flip side, ONGC down by 1.24%, Hindustan Unilever down by 0.34% and Dr. Reddys Lab down by 0.12% were the only losers. (Provisional)

Meanwhile, in a major push to the roads sector, Finance Minister Arun Jaitley in his budget for the financial year 2016-17 has allocated Rs 55000 crore to the sector. This will be further topped up by additional 15,000 crore to be raised by National Highways Authority of India (NHAI) through tax free bonds. Thus the total investment in the road sector, including Pradhanmatri Gram Sadak Yojna (PMGSY) allocation, would be Rs 97,000 crore during 2016-17.

Further the Minister has announced that road transport in the passenger segment would be opened up to the private sector. Jaitley also said amendments would be made in Motor vehicle act to get more participation from private sector. He said focus would be to end permit raj to make the sector more transparent.

Besides, the government will award nearly 10,000 kms of National Highways in 2016-17. This will be much higher than in the two previous years. In addition, nearly 50,000 kms of State highways will also be taken up for up-gradation as National Highways.

In 2015, India’s highest ever kilometres of new highways were awarded. At the same time, India’s highest ever production of motor vehicles was also achieved in 2015. This is a sign of growth in the economy; but it presents a challenge also.

The CNX Nifty ended at 7222.30, up by 235.25 points or 3.37% after trading in a range of 7035.10 and 7235.50. There were 47 stocks advancing against 3 stocks declining on the index. (Provisional)

The top gainers on Nifty were ITC up by 10.05%, Maruti Suzuki up by 7.97%, ICICI Bank up by 7.84%, Hero MotoCorp up by 6.69% and Vedanta up by 6.16%. On the flip side, ONGC down by 1.34%, Hindustan Unilever down by 0.75% and Dr. Reddys Lab down by 0.39% were the only losers. (Provisional)

European markets were trading in green; France’s CAC increased 10.66 points or 0.24% to 4,364.21, UK’s FTSE 100 gained 21.2 points or 0.35% to 6,118.29 and Germany’s DAX was up by 111 points or 1.17% to 9,606.40.

Asian markets ended higher on Tuesday as oil prices extended overnight gains and China's central bank set the yuan fixing stronger for the first time in six days. China stocks closed up after the central bank's surprise monetary policy easing, shrugging off disappointing manufacturing and service sector surveys that highlighted the wider challenges faced by the world's second-largest economy. Late on Monday, the People's Bank of China announced a cut in the amount of cash that banks must hold as reserves - the reserve ratio requirement (RRR) - by 50 basis points. It frees up an estimated $100 billion in cash for fresh lending. Chinese government data showed activity in large factories contracted for the seventh straight month in February. The official manufacturing Purchasing Managers' Index (PMI) stood at 49.0, down from 49.4 in January. China's official services PMI fell to 52.7 in February, from 53.5 in January. Japanese shares closed higher after declining as much as 1.1 percent earlier in the day amid the yen's strength and disappointing capital spending, household spending and corporate profits data.