Rally in Tech and Realty counters help Sensex regain some lost ground

The last trading session, ahead of the March series futures and options expiry week, turned out to be a volatile one for the Indian stock markets but late recovery ensured that the frontline equity indices add around a percent before the close.

Smarting with huge losses after the brutal over two percent laceration that the frontline indices suffered on Thursday, market participants remained cautiously optimistic in early trading hours of the week’s last session as they indulged only in stock specific activity, lacking any significant triggers to open fresh positions.

The main equity indices got strong support around the psychological 5,250 (Nifty) and 17,250 (Sensex) levels as they went on to rally over one and half a percent from those levels. However, some resistance around the 5,300 (Nifty) and 17,450 (Sensex) levels resulted in the markets ending off the day’s highs.

In the morning hours of trade, markets lacked fervor due to weak retail participation owing to a Gudi Padwa holiday while Banks, money and foreign exchange markets remained closed on the Maharashtrian New Year day.

But sentiments got buttressed in afternoon trades after the investment firm Goldman Sachs in its latest Asia-Pacific Quarterly Outlook report upgraded Indian stocks to marketweight from underweight, citing reasons that the domestic growth is likely to pick up, while stock valuations remain relatively attractive. Besides, at a time when Indian oil and gas companies incurring hefty losses and subsidies burden has shown little signs of coming down, the government initiated gas pricing reforms to incentivize production of natural gas.
Index heavyweight Reliance Industries surged over 1% on reports that the government approved its $1.5 billion plan to produce over 10 million standard cubic meters of gas per day from four satellite fields in the KG-D6 block. The upmove in markets also was adequately supported by the gains in information technology shares, not only because of the rupee’s depreciation to nine week lows, but also amid reports that India's flagship software services providers are seeking an image makeover in the US ahead of the presidential election.

Also the rate sensitive counters regained some traction after the heavy pounding they suffered in the previous session. However the metal index failed to shine in the session as the decline in heavyweights like Tata Steel and Jindal Steel weighed.

Besides, leads from the Asian counterparts remained mixed as major markets like the Chinese and Japanese indices plunged over a percent in the session, while others traded with marginal gains. However, the optimistic start in European markets provided the much needed fillip to local bourses as they moved in tandem with their Euro-zone peers.

Back home, the NSE’s 50-share broadly followed index Nifty, surged by close to a percent to settle below the psychological 5,300 support level while Bombay Stock Exchange’s Sensitive Index - Sensex amassed over one hundred sixty points to finish below the psychological 17,400 mark. Moreover, the broader markets too settled on a positive note with around half a percent gains but failed to mirror the fervor with which their larger peers rallied.

The markets surged on extremely large volumes of around Rs 2 lakh crore, while the turnover for NSE F&O segment too remained on the higher side as compared to that on Thursday at over Rs 1.69 lakh crore. The market breadth turned positive by the end as there were 1470 shares on the gaining side against 1431 shares on the losing side while 121 shares remained unchanged.

Finally, the BSE Sensex gained 165.27 points or 0.96% to settle at 17,361.74, while the S&P CNX Nifty rose by 49.75 points or 0.95% to close at 5,278.20.

The BSE Sensex touched a high and a low of 17,458.35 and 17,179.33 respectively. The BSE Mid cap and Small cap index up by 0.61% and 0.40% respectively.

The only gainers on the Sensex were Hero MotoCorp up 4.08%, Bharti Airtel up 3.69%, Sun Pharma up 2.71%, Gail India up 2.39% and HDFC Bank up 2.24% While Jindal Steel down 1.90%, Maruti Suzuki down 1.68%, ONGC down by 1.26%, Coal India down by 1.25% and Hindalco down by 1.02% were the major losers on the index.

The top gainers on the BSE sectoral space were TECk down 1.62%, Realty down 1.61%, IT down 1.38%, Bankex down 1.27% and FMCG down 1.16%, while the top losers on the BSE sectoral space were Metal down 0.51%, Consumer Durables down 0.11%.

Meanwhile, the government has cleared 16 FDI proposals totaling to an investment of about Rs 233 crore. The clearances have been given on the recommendations of the Foreign Investment Promotion Board (FIPB). Major companies who have been granted clearance are the Karnataka-based VRL Logistics, CIIE Initiatives and Softgel Healthcare, Chennai. Most FDIs in India are cleared through the automatic route but certain sectors like defense and telecommunications, which are considered to be sensitive, require government approval.

The largest FDI proposal, worth Rs 175 crore, has been cleared in favour of VRL Logistics which allows it to invite foreign investment in areas of transportation of goods and passengers, courier services other than postal services, aircraft charter services, and wind power generation, involving the installation and sale of electricity produced by wind power generators.

CIIE Initiatives, a trust set up by IIMA in collaboration with GOI and the Gujarat government, has been allowed to increase foreign investment to the tune of Rs 40 crore. It has also been granted permission to increase the percentage of foreign investment in its trust.

The decision on the proposal to set up a joint venture for defence manufacturing of Mahindra and Mahindra has been deferred. Bharti Shipyard's application to undertake additional defence production activity has also been deferred. Another deferred proposal is from HSBC Insurance Services Holdings, London, for infusion of foreign investment into an Indian company that does not have any operations or downstream investments. The total number of deferred proposals amount to 21.

These further include Network 18 Media & Investment, YourNest Angel Fund Trust, Domino Printing Sciences Plc, UK, Advent Business Credit Development Company, Pune and Reed Elsevier India. Next meeting of the FIPB is scheduled for March 30.  The S&P CNX Nifty touched a high and low of 5,312.00 and 5,220.00 respectively.

The top gainers on the Nifty were JP Associates up 4.31%, Ambuja Cement up 3.90%, Hero MotoCorp up 3.59%, Bharti Airtel up 3.57% and Cairn up 2.77%. On the flip side, Jindal Steel down by 2.13%, Maruti Suzuki down 1.75%, Siemens down 1.09%, Coal India down 1.05% and ONGC down 1.00% were the top losers on the index.

The European markets were trading in red, as France's CAC 40 was down 0.46%, Britain’s FTSE 100 down 0.18%, while Germany's DAX was down by 0.23%.

Most of the Asian equity markets reversed their early losses to finish mixed on Friday as investors sought buying opportunities in the wake of recent selling, despite downward pressure from weak manufacturing data out of China and Europe. Earlier, the regional markets witnessed a choppy trade for most part of the day’s trade as Chinese manufacturing activity shrank for a fifth straight month in March and the euro zone economy showed new signs of wilting in surveys that pointed to weakening global demand but, the impact on the market was cushioned by bargain-hunting in late trade amid firm opening in European counters.

Tokyo stocks closed 1.14 percent lower following losses on Wall Street while, fears of slower growth lifted the yen, further weighing on Japanese exporters. However, Taiwan stocks rose 0.21 percent, with banks rising after the central bank left interest rates on hold and said it hoped to sign a currency clearing agreement with China around the middle of the year.

The Indonesian equity market remained close today on the account of public holiday.