Post Session: Quick Review

Hectic buying activity which took place during last leg of trade mainly drove the markets higher and key domestic benchmarks recaptured their crucial 25,200 (Sensex) and 7,700 (Nifty) bastions. Market made a decent start in morning and traded in tight band with a gain of around half a percent for most part of the day’s trade. Continued buying by investors and inflows by foreign funds mainly helped the improved the market sentiments. Sentiments also remained up-beat on hopes that the Reserve Bank of India (RBI) will cut rates in its monetary policy review on April 5.

Some support also came with report that India’s bulk drug exports are likely to grow at an average rate of 12-14% till 2018-19 on the back of increasing shipments to countries including the US and Europe. Meanwhile, Finance Minister Arun Jaitley has justified the decision of slashing interest rates on small-savings schemes, including the Public Provident Fund (PPF) and Kisan Vikas Patra (KVP), saying that the country has to move towards lower interest rates. He articulated that cut on PPF rates was a right decision by the government and part of routine procedure.

Buying got intensified after European markets making a splinted recovery and CAC, DAX and FTSE were trading in green in early deals. Asian markets ended mostly in green on hopes that China may soon cut interest rates again as pressure on the yuan eases. However, gains remained capped as a retreat in oil prices made investors cautious.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Sentiments got some support with the report that foreign portfolio investors (FPIs) bought shares worth a net Rs 1712.62 crore on March 18, 2015. Appreciation in Indian rupee too aided sentiments. The rupee recovered from its early lows by surging 7 paise to 66.43 against the US dollar at the time of equity markets closing at the Interbank Foreign Exchange.

Banking shares mainly public sector banks (PSB) edged higher on the bourses after the government announced a steep cut in interest rates on small savings schemes. Jewellery stocks remained on buyers’ radar after the 18-day long strike by jewellers ended on Saturday night.  Shares of cement companies surged for the third straight session on the bourses on expectation of strong show in the current quarter as volume growth picking up, mainly from the infrastructure sector. Meanwhile, the government will begin the payment of salaries and pensions to its 48 lakh employees and 52 lakh pensioners based on the seventh pay commission recommendations from July along with six months’ arrears. This will in turn boost the consumption and led to a powerful rally in the FMCG stocks.

The NSE’s 50-share broadly followed index Nifty gained by around hundred points to end above the psychological 7,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over three hundred and thirty points to finish near its psychological 25,300 mark. Broader markets too traded with traction and ended the session with a gain of around one and a half percent.

The market breadth remained in favor of decliners, as there were 1,495 shares on the gaining side against 1,170 shares on the losing side while 185 shares remain unchanged. (Provisional)

The BSE Sensex ended at 25285.37, up by 332.63 points or 1.33% after trading in a range of 24988.27 and 25327.45. There were 23 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.40%, while Small cap index up by 1.36%. (Provisional)

The top gaining sectoral indices on the BSE were Industrials up by 2.17%, Capital Goods up by 2.01%, Basic Materials up by, 1.94%, Finance up by 1.81% and Consumer Durables up by 1.80%, while there were no losers on the index. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 3.89%, SBI up by 3.11%, Larsen & Toubro up by 2.65%, HDFC up by 2.43% and Tata Motors up by 2.27%. On the flip side, Asian Paints down by 2.06%, Lupin down by 1.66%, BHEL down by 1.28%, Hero MotoCorp down by 0.95% and GAIL India down by 0.59% were the top losers. (Provisional)

Meanwhile, amid the increased prospect of a lower interest rate regime and hopes of the Reserve Bank of India (RBI) cutting rates in its monetary policy review on April 5, Jayant Sinha, Minister of State for Finance, putting the ball in RBI’s court has said that what we have done in the Budget is to create space for the Reserve Bank to cut rates.

Sinha said that at this time, if you look at the fiscal and monetary side, you will find that the fiscal side is much tighter. There is a lot more monetary space as inflation pressures are subdued. Also, there is weak aggregate global demand and, lastly, central banks around the world are following unconventional monetary policies.

Talking about the Fiscal Responsibility and Budget Management (FRBM) Act and fiscal targets going forward, he said that FRBM is a very important aspect of India’s fiscal management by setting benchmarks. The benchmark is that the fiscal deficit at both the Centre and the States’ level should be at three per cent. FRBM was put in place in 2003 and in 2004, the UPA government came and the first thing they did was to press pause on the FRBM. Thereafter, every year the FRBM was revised and the three per cent target was never achieved. So, the FRBM targets were observed more in breach than observance.  Our thinking on fiscal target is to be much more dynamic and flexible, to be counter-cyclical, if required.

The CNX Nifty ended at 7704.25, up by 99.90 points or 1.31% after trading in a range of 7617.70 and 7713.55. There were 40 stocks advancing against 9 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ambuja Cement up by 4.46%, Ultratech Cement up by 3.82%, Hindustan Unilever up by 3.69%, Bosch up by 3.07% and SBI up by 2.90%. On the flip side, Asian Paints down by 1.79%, BHEL down by 1.28%, Lupin down by 1.24%, Hero MotoCorp down by 1.11% and Tech Mahindra down by 0.48% were the top losers. (Provisional)

European markets were trading in green; France’s CAC increased 17.6 points or 0.39% to 4,480.11, UK’s FTSE 100 gained 23.01 points or 0.37% to 6,212.65 and Germany’s DAX was up by 131.81 points or 1.32% to 10,082.61.

Asian equity markets ended mixed on Monday as a retreat in oil prices prompted investors to lock in some profits after three consecutive weeks of gains. Many market watchers are predicting a quiet week ahead in the absence of major economic data from the US and China, and with many markets off for Good Friday. However, Chinese shares rallied to extend gains for a seventh day after authorities signaled a loosening stance toward margin trading and cut borrowing costs for brokerages. Market in Japan was closed for a holiday.