Boisterous benchmarks stage a remarkable rally; Sensex rallies over 400 points

A session after displaying a distressing performance, Indian benchmark indices managed to pull through a scintillating performance by vivaciously rallying around two percentage points on Wednesday, thanks to strong global cues post US Federal Reserve chair, Janet Yellen’s comment and fall in crude oil prices by upto 3%. Yellen stated that the rate of inflation in the US has not yet proven sustainable against the backdrop of looming global risks to the US economy and that the US central bank should proceed only cautiously to the policy adjustments. Besides, hopes of a rate cut by the RBI at its monetary policy review on April 5 also accelerated buying activity in the local markets. Sentiments got some support with Finance Minister’s statement that he will reach out to the Congress again to persuade it to support the much delayed GST bill in second half of the Budget Session beginning next month. Appreciation in Indian rupee too aided sentiments. Indian rupee appreciated by 14 paise to 66.39 against the US dollar in noon deals on increased selling of the American currency by exporters and banks amidst continued foreign fund inflows. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 513 crore on March 29, 2016.

On the global front, Asian markets ended firm on Wednesday as market participants scaled back expectations for how fast and far US interest rates might rise this year. Some support also came from Wall Street, were technology shares led gains in major indices and both the S&P 500 and Dow closed at their highs for 2016. European stocks also rallied in early trade, heading for a second straight day of gains, in a broad-based rally prompted by the prospect that U.S. interest rates won’t be raised quickly. However, the Japanese index, Nikkei 225 bucked the trend and lost 1.3% by the end of the session as the Japanese fiscal year draws to a close at the end of this month, and with the mood not helped by mixed economic data released before the market opening.

Back home, the benchmark got off to a rollicking opening as investors were largely influenced by the supportive leads from Asian markets. The frontline indices soon gathered momentum and traded with over half a percent gains through the morning session of trade. Second half of the session saw the key gauges capitalize on the momentum further and spurt to session’s highest levels in dying moments. Finally, the NSE’s 50-share broadly followed index Nifty, amassed triple digit gains to settle above the crucial 7,700 support level, while Bombay Stock Exchange’s Sensitive Index-Sensex accumulated over four hundred points and closed above the psychological 25,300 mark. Moreover, the broader markets too participated in the rally and closed with gains of around two percent. On the BSE sectoral space, buying was evident across the board and investors piled up hefty positions in the high beta Realty counter which rocketed by over three and a half percent while the Banking, Metal and Capital Goods pockets gained from strength to strength and climbed by about three percent each.

The market breadth remained optimistic as there were 1872 shares on the gaining side against 755 shares on the losing side while 153 shares remained unchanged.

Finally, the BSE Sensex surged 438.12 points or 1.76% to 25338.58, while the CNX Nifty rallied 138.20 points or 1.82% to 7,735.20.

The BSE Sensex touched a high and a low 25358.84 and 25055.42, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 1.81%, while Small cap index gained by 1.87%

The top gaining sectoral indices on the BSE were Realty up by 3.85%, Bankex up by 3.13%, Metal up by 3.06%, Capital Goods up by 2.73% and Power up by 2.53%, while there were no losers on the BSE sectoral space.

The top gainers on the Sensex were Tata Steel up by 6.75%, ICICI Bank up by 6.31%, Lupin up by 5.21%, Tata Motors up by 4.32% and SBI up by 4.25%. On the flip side, HDFC down by 1.08%, Mahindra & Mahindra down by 0.98%, Bharti Airtel down by 0.20% and Maruti Suzuki down by 0.08% were the top losers.

Meanwhile, In order to boost the foreign and domestic investments, Finance Minister Arun Jaitley has said that India needs to further ease its business processes, though he admitted that the country has been impacted by global trade shrinkages in terms of uncertainties in stock and currency markets.

Jaitley who is on a four-day Australia visit said that ease of doing business is an important work which is still in progress as far as India is concerned. He added that 'I can't claim that we have achieved everything but I think there is a greater realisation in India that in the competitive world today not only to attract foreign investors but also persuading domestic investors, we will have to ease our business processes.'

Highlighting various measures taken since the NDA government came to power in May 2014, Jaitley said that the government has removed the unnecessary conditionalities which were slowing down foreign direct investments and this probably in greenfield projects, has made India the most sought after destination as far as FDI is concerned.

Finance Minister further said that “in term of ease of doing business, you are measured by the stability of policies, by predictability, by cutting short the time between the decision to make investment and actual implementation you need few approvals and easy approvals'. He said that for India, the system was to get approval from multiple authorities which could frustrate the investors.

Moreover the second important challenge was not only to improve India's image but to get the image improved by the fact that in actual operation those who domestically do business and those who intend to invest in India go back with an impression that it is easy to do business in India.

The CNX Nifty touched a high and low 7,741.95 and 7,643.45 respectively. 

The top gainers on Nifty were ICICI Bank up by 6.49%, Tata Steel up by 6.47%, Lupin up by 5.88%, Tata Motors up by 5.01% and Adani Ports up by 4.37%. On the flip side, Zee Entertainment down by 1.34%, Mahindra & Mahindra down by 1.16%, HDFC down by 0.65%, Bharti Airtel down by 0.45% and Maruti Suzuki down by 0.13% were the top losers.

European markets were trading in green; France’s CAC surged 70.72 points or 1.62% to 4,437.39, UK’s FTSE 100 increased 94.21 points or 1.54% to 6,200.11 and Germany’s DAX was up by 155 points or 1.57% to 10,042.94.

Asian equity markets ended mostly higher on Wednesday followed Wall Street’s gains after Federal Reserve Chair Janet Yellen offered another dovish outlook on the US economy and the pace of rate hikes, citing heightened global risks. China stocks enjoyed their best day in a month, with main indexes jumping more than 2 percent, as the mainland market joined a global rally after US Federal Reserve remarks hosed down expectations of imminent interest rate hikes. However, Japanese shares bucked the regional uptrend as the yen strengthened and weak industrial production data pointed to further softness in the economy. Japan's industrial output dropped 6.2 percent in February from the previous month, the most since March 2011, as production of vehicles, electronic devices and manufacturing equipment dropped.