Benchmarks witness smart recovery; Sensex regains 26,000 mark

A session after displaying a distressing performance, Indian benchmark indices managed to pull through a dazzling performance by rallying over a percentage points on Tuesday, as better than expected earnings including Maruti Suzuki India lifted mood, while gains in European shares and a recovery in crude prices also helped to improve sentiments. Market gains were also buoyed by report that India might surpass China in attracting foreign direct investment (FDI) this year, in terms of percentage of its GDP, as the gap in inflows between the two has been narrowing on the back of ongoing reforms in the country. Some support also came with statement of Economic Affairs Secretary Shaktikanta Das, who pledging a strong focus on the execution of Budget announcements and ensuring that there are no delays in investments by key ministries, said that India plans to further liberalise rules for overseas investors as the government looks to reduce the need for approvals.

On the global front, markets in Asia made a mixed finish as investors remained cautious ahead of U.S. Federal Reserve and Bank of Japan policy meetings later this week. Market participants are not expecting the Federal Reserve to change policy this month but its two-day meeting this week will be watched for indications about its future moves. European shares advanced in early trade after some encouraging company results, with pulp and paper maker UPM climbing after better-than-expected quarterly profits. Furthermore, the screen trading for U.S. stock-index futures, indicated equities will rebound, as investors await further financial reports and this week’s Federal Reserve policy update for signs of the health of the world’s biggest economy.

Back home, after witnessing sluggish trade in previous session, the local benchmark indices started the day on weak note as investors were largely influenced by the pessimistic sentiments prevailing in the other regional markets. Besides, depreciation in rupee values against the dollar and persistent selling by domestic financial institutions have also negatively impacted sentiments. But the frontline indices slowly and steadily started gathering steam and surged by around half a percent by late morning trades. The bourses further capitalized on the momentum and spurted in afternoon trades on the back of broad based bottom fishing in undervalued stocks. However, a mild profit booking in dying moments of trade ensured that the key indices shut shops off the intraday highs. Eventually the NSE’s 50-share broadly followed index Nifty, got buttressed by over a percent to settle below the crucial 7,950 support level, while Bombay Stock Exchange’s sensitive index-Sensex accumulated over three hundred points and closed just above the psychological 26,000 mark. Moreover, the broader markets too participated in the rally and closed with gains of over half a percent. On the BSE sectoral space, buying was evident across the board and investors piled up hefty positions in the rate sensitive Banking counter which rocketed by over two percent, while the Metal, Realty and Auto pockets too gained from strength to strength and climbed by over one and half percent each. The market breadth remained positive as there were 1585 shares on the gaining side against 981 shares on the losing side, while 173 shares remained unchanged.

Finally, the BSE Sensex surged 328.37 points or 1.28% to 26007.30, while the CNX Nifty rallied 107.60 points or 1.37% to 7,962.65.

The BSE Sensex touched a high and a low 25049.92 and 24523.20, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 0.79%, while Small cap index gained 0.68%

The top gaining sectoral indices on the BSE were Bankex up by 2.02%, Metal up by 1.98%, Realty up by 1.93%, Auto up by 1.57% and TECK up by 1.16%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were Maruti Suzuki up by 3.62%, Tata Steel up by 3.12%, Cipla up by 2.75%, BHEL up by 2.66% and Lupin up by 2.30%. On the flip side, Adani Ports & SEZ down by 1.21%, Hero MotoCorp down by 1.19% and Dr. Reddys Lab down by 0.15% were the losers.

Meanwhile, India has received $51 billion Foreign Direct Investment (FDI) during the April-February period of last fiscal 2015-16India has record inflows of FDI and has touched the 'highest ever' mark during the period. The FDI numbers indicates that the government has been able to create a suitable climate in which the foreign investors feel confident that interest is protected.

However, Department of Industrial Policy & Promotion (DIPP) Secretary Ramesh Abhishek said that ease of doing business is critical for creating a suitable business climate and the government is a making lot of efforts to improve it. He also said that protection of creativity and innovation is important to create a suitable climate in the country for technology to be developed and for technology to come from outside.

In 2011-12, India had attracted FDI worth $46.55 billion. In 2014-15, it was $44.29 billion. This FDI includes equity, re-invested earnings and other capital. The country need growth rate of double digits for the next three decades to improve the quality of life and eliminate poverty but that requires lot of efforts in investment side, IPR side and at other fronts.

The CNX Nifty touched a high and low 7,974.50 and 7,822.55 respectively. 

The top gainers on Nifty were Hindalco up by 4.93%, Idea Cellular up by 4.70%, IndusInd Bank up by 4.07%, Yes Bank up by 4.05% and Tata Power up by 3.52%. On the flip side, Adani Ports down by 1.21%, Bharti Infratel down by 1.05%, Hero MotoCorp down by 0.98%, UltraTech Cement down by 0.45% and BPCL down by 0.34% were the top losers.

European markets were trading in green; France’s CAC rose 6.55 points or 0.14% to 4,552.67, UK’s FTSE 100 increased 27.55 points or 0.44% to 6,288.47 and Germany’s DAX was up by 33.5 points or 0.33% to 10,327.85.

Asian equity markets ended mixed on Tuesday as weak overnight cues from Wall Street and Europe as well as the oil price volatility kept investors in a defensive mode ahead of central bank meetings in the US and Japan. The two-day FOMC meeting gets underway later today, with traders waiting for clues as to the probability of a June rate hike. Chinese shares reversed early losses to end slightly higher, as a rally in healthcare and real estate shares offset initial gloom triggered by falling commodity prices in the wake of a government crackdown on speculation. Japanese shares fell for a second straight day as the yen held Monday's gains against the dollar despite speculation the Bank of Japan will expand stimulus at its April 27-28 policy meeting.