Indian Benchmarks close with moderate gain; nifty ends above 7500 mark

The domestic equity markets showed a notable recovery in the second half of the session and ended the day in the green, however the trade remained volatile throughout the day. Sentiments got some support with IMF's indication that it may revise its estimate for global economic growth in its spring meeting but India is better placed than other emerging market countries. The recent reforms raised hopes the government would take further measures after key parts of its legislative agenda, including a revamp of the goods and services tax (GST), had been stuck in parliament. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 1063.11 crore on March 10, 2016. However, Investors maintained a cautious approach ahead of Index of Industrial Production (IIP) data for January scheduled to be released later in the day.

On the global front, Asian markets ended the week high on Friday, with an afternoon rally erasing morning losses as investors changed tack on their view of comments from the European Central Bank head hinting its latest rate cut could be its last. Japanese stocks ended higher as oil prices rebounded from overnight losses and the yen weakened following some initial strength, while China stocks reversed initial losses and ended higher, as the banking sector regained some composure amid expectations that China's securities regulator would provide some market-friendly comments at a press conference to be held in Beijing on Saturday. Meanwhile, European shares bounced back on Friday, with a recovery in metal and oil prices boosting commodities stocks and the ECB's bank funding plan continuing to support lenders in the euro zone periphery for a second day.

Back home, the benchmark got off to a soft start as the indices showed signs of consolidation in early trade, tracking the weakness in other Asian markets after ECB chairman Mario Draghi said the bank would consider further rate cuts only in extreme cases. But the frontline indices slowly but steadily started gathering steam and surged by over half a percent by late morning trades as energy firms such as Reliance Industries rallied after the country simplified oil and gas licensing rules, while property developers gained after parliament passed a real estate bill. However, the key gauges suffered a setback in afternoon trades as sudden bouts of profit booking emerged in the local markets due to lack of encouraging leads. Yet, some late short covering in blue-chip stocks and supportive leads from European markets ensured that local bourses go home with some gains. Finally the NSE’s 50-share broadly followed index Nifty, got buttressed by close to half percent to settle above the crucial 7,500 support level while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated ninety four points and closed above the psychological 24,700 mark.

On the BSE sectoral space, the FMCG counter remained the top gainer with over a percent gains, followed by the Oil & Gas pocket which gained by around half percent. On the other hand, the Metal index slipped by over half a percent followed by the Power and PSU counters, which settled with moderate losses. Meanwhile, shares of select PSU banks witnessed selling pressure after credit rating agency Crisil downgraded its ratings on the debt instruments of eight PSBs on expectation that the asset quality problems being faced by PSBs will remain acute and continue through most of the next fiscal.

The market breadth remained awful as there were 1100 shares on the gaining side against 1464 shares on the losing side while 161 shares remained unchanged.

Finally, the BSE Sensex gained 94.65 points or 0.38% to 24717.99, while the CNX Nifty rose 24.05 points or 0.32% to 7,510.20.

The BSE Sensex touched a high and a low 24817.80 and 24552.26, respectively. The broader indices made a mixed closing; the BSE Mid cap index ended up by 0.08%, while Small cap index declined 0.16%

The top gaining sectoral indices on the BSE were FMCG up by 1.24%, Oil & Gas up by 0.50%, Auto up by 0.42%, Capital Goods up by 0.25% and TECK up by 0.03%, while Metal down by 0.69%, Power down by 0.46%, PSU down by 0.40%, Realty down by 0.30% and Bankex down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Lupin up by 2.01%, Hindustan Unilever up by 1.88%, Adani Ports &Special up by 1.81%, Tata Motors up by 1.61% and ITC up by 1.60%. On the flip side, Coal India down by 0.98%, ICICI Bank down by 0.77%, BHEL down by 0.67%, Tata Steel down by 0.57% and NTPC down by 0.51% were the top losers.

Meanwhile, Bringing big cheers to the home buyers, the Rajya Sabha has approved the landmark Real Estate Bill with a promise to secure the interests of homebuyers and developers in equal measure and remove corruption and inefficiency from the sector. The bill, which seeks to regulate the property sector, bring in transparency is slated to be taken up by Lok Sabha on March 14. The Real Estate (Regulation and Development) Bill, 2016 would become law after it gets the assent of the Lok Sabha.

Once the Real estate Bill becomes law, real estate developers will require to deposit 70% of the funds received from buyers for a project into an escrow account (a financial instrument held by a third party on behalf of the other two parties in a transaction), so that funds can’t be diverted to other projects and it can be utilised for land cost and construction of the related project. It, therefore, provides greater certainty to buyers that the money they pay to the developer will be utilised for development of the project where they have bought houses. The amended Bill also provides for imprisonment up to three years if the builders violate the provisions, including delayed deliveries.

Developers will have to register projects with 500 sq mt area or 8 flats with a regulatory authority instead of 1,000 sq mt and 12 flats earlier. A minimum of 50% of sale proceeds will have to be kept in a separate bank account and used for construction of that project. Among other changes, the carpet area has now been defined as the net usable area and all financial statements have to be audited within six months of financial year closure by a practicing chartered accountant.

The Bill, which has been pending since 2013, was amended by the Cabinet in December 2015. The Bill was approved with amendments as mooted by the Rajya Sabha select committee. The new law would create the framework for regulating transactions between buyers and promoters of real estate projects. It has also a provision to establish state level regulatory authorities called Real Estate Regulatory Authorities (RERAs). Real estate contributes nine per cent to the national GDP and the Bill’s passage was seen as crucial to ensuring better regulatory oversight and orderly growth in the industry.

The CNX Nifty touched a high and low 7,543.95 and 7,460.60 respectively. 

The top gainers on Nifty were Cairn India up by 4.30%, Hindustan Unilever up by 2.20%, Adani Ports &Special up by 2.01%, Lupin up by 1.99% and Zee Entertainment up by 1.83%. On the flip side, Idea Cellular down by 2.20%, Kotak Mahindra Bank down by 1.62%, Tech Mahindra down by 1.53%, Power Grid down by 1.15% and Tata Steel down by 0.71% were the top losers.

European markets were trading in green; UK’s FTSE 100 surged 92.01 points or 1.52% to 6,128.71, France’s CAC soared 94.72 points or 2.18% to 4,445.07 and Germany’s DAX was up by 193.37 points or 2.04% to 9,691.52.

Asian markets ended higher on Friday, on track for weekly gains, shrugging off global losses logged after the European Central Bank eased aggressively but suggested it was running out of room to cut interest rates even if other stimulus options remained. Japanese stocks ended higher as oil prices rebounded from overnight losses and the yen weakened following some initial strength. China stocks ended slightly higher, reversing initial losses, as the banking sector regained some composure amid expectations that China's securities regulator would provide some market-friendly comments at a press conference to be held in Beijing on Saturday.