Post session - Quick review

New month’s futures and options (F&O) series got a promising start as barometer gauges rallying smartly amassed gigantic gains of over two percentage points each on the last trading session of the week. Bounce back, which came after two straight session of the drubbing, led the benchmark indices snap the week with modest gains of over quarter percentage points. The session, which was low on volume, with a trade of over 1 lac crore, was extremely ecstatic one for rather fluxed investors. The barometer gauges after getting a heartwarming start, went on multiplying gains to end near the high point of the day, although slender profit booking was seen in the dying hours of the trade, nevertheless, that failed to diminish the euphoria seen across the street.

Bourses from the start of the trade depicted optimism on the back of early spurt of rate sensitive counters after the Reserve Bank of India, assessing the prevailing liquidity conditions, decided to conduct Open Market Operations (OMO) Purchase of Government Securities for Rs 10,000 crore on March 30, 2012. However, some of the trader’s also viewed the bounce back as technical one as the barometer gauges after dropping for two consecutive sessions, were bound to witness some short covering.

Meanwhile, bourses also extended gains after Finance Minister allayed the fear of investors by clarifying that the intention of the government was not to cause any harassment to genuine investors. Finance Minister Pranab Mukherjee on Friday said that the question of tax liability for Participatory note (P-note) holders does not arise.

Additional gains at Dalal Street also came thanks to the courtesy of European markets. European shares recovered some ground on Friday, after sharp losses this week, as finance ministers from the 17 euro countries discussed whether to increase the amount of resources at their disposal for future bailouts. Also, spurt of regional counterparts, lent additional support to the bourses. Asian shares firmed to end their best first quarter in over 20 years on Friday; however, some anxiety was seen over industrial slowdown.

Back on the home turf, the barometer gauge of Bombay Stock Exchange (BSE) accumulated over 300 points’ gains to end the session above the 17400 mark, which was also in proximity to the high point of the day. Gains from Oil & Gas, Realty and Public Sector Undertaking (PSU) counters validated the bullish approach of the bourses. Shares of Oil Marketing companies like HPCL, Indian Oil Corporation (IOC), Oil India rallying in the range of 3-8% heaved the Oil & Gas pivotal higher by over two and half percentage points. OMC’s rose on the reports of likelihood of petrol price hike by this weekend when the Budget session in the Parliament will come to a brief break.

Similarly, the widely followed 50 share index of National Stock Exchange (NSE)-Nifty- despite registering gains of over a century of points, shied away from the 5300 level as profit booking at the fag end of the trade, dragged the index lower from high point of the day. Midcap index of BSE also captured gains in line with the frontline index, while small cap too pocketed gains but not in the magnitude of larger peers. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1874:996 while 123 scrips remained unchanged. (Provisional)

The BSE Sensex gain 311.84 points or 1.83% and settled at 17,370.45. The index touched a high and a low of 17,439.51 and 17,105.22 respectively. 26 stocks advanced against 4 declining ones on the index (Provisional)

The BSE Mid-cap index gain 2.28% while Small-cap index was up 2.02%. (Provisional)

On the BSE Sectoral front, Oil & Gas up 2.72%, Realty up 2.68%, Bankex up 2.51%, PSU up 2.34% and Metal up 2.25%were the top gainers while there were no losers. (Provisional)

There top gainers on the Sensex were Maruti Suzuki up 3.93%, ICICI Bank up 3.85%, Hindalco Industries up 3.69%, Tata Steel up 3.39% and BHEL up 3.03% while, Jindal Steel down 1.24%, Sun Pharma down 0.67%, HUL down 0.10% and NTPC down 0.03% were the only losers in the index. (Provisional)

Meanwhile, Indian economy is expected to grow by 7.5% in the next fiscal, according to the global rating agency Fitch. This is because the current economic cycle in its view seems to have bottomed out and demand appears to have stabilized. Industrial production too has improved and an upward trend is on the horizon. Further inflation is not expected to re-emerge as a softening stance has been seen in the core inflation trends. Given this a rate cut by the RBI has become eminent.

As per the rating agency, GDP grew at 6.1% in Q3 of FY’12 as compared to the 6.9% in the same quarter last year. However going forward, the numbers are expected to improve. A breakdown by expenditure shows that private consumption has rebounded, stabilizing demand. Industrial production too has unexpectedly increased to 6.8% y-o-y in January compared with a 2.5% y-o-y rise in December. Manufacturing PMI remains elevated, reaching 56.6 in February, slightly below 57.5 in January. Equally vital, fixed investment fell 1.2% y-o-y in Q4FY11, following a 4.0% y-o-y decline in Q3FY11.

Since economic activity is still subdued due to the global economic scenario, inflationary pressures are not expected to rise unless there is an unexpected spike in oil prices. February`s rise in headline WPI was largely due to unseasonal rain patterns, which led to a surge in food prices. However core inflation pressures are easing. Given the tamed levels of inflation, the RBI should also be able to cut its key reverse repurchase rate, which currently stands at 7.25%, and bring it down by 1% over the course of 2012-13. The cash reserve ratio was cut by 0.75% to 4.75% in early March, which follows the 0.5% cut in late January.

Finance Minister had projected India’s GDP growth at 7.6% (+/- 0.25%) for FY’13 in his Union Budget on the back of strong domestic fundamentals and a still fragile global economy. The observations made by Fitch only reaffirm his stance. On the global front, Fitch Ratings forecasts that the economic growth of major advanced economies (MAE) will be modest at 1.1% in 2012, followed by gradual acceleration to 1.8% in 2013. Europe shall continue to remain weak but US is expected to gain momentum. Growth in the BRICS countries will remain strong barring China which is expected to slow further this year.  

India VIX, a gauge for market’s short term expectation of volatility lost 8.01% at 22.38 from its previous close of 24.33 on Thursday. (Provisional)

The S&P CNX Nifty gain 110.80 points or 2.14% to settle at 5,289.65. The index touched high and low of 5,307.10 and 5,203.65 respectively. 47 stocks advanced against 3 declining ones on the index. (Provisional)

The top gainers on the Nifty were IDFC up 4.69%, Ranbaxy up 4.68%, Kotak Bank up 4.58%, SAIL up 4.07% and ICICI Bank up 3.85%.On the other hand, Cairn India down 0.62%, Jindal Steel down 0.57% and Sun Pharma down 0.56% were the only losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 1.22%, Germany's DAX up 1.00% and Britain’s FTSE 100 up 0.63%.

After a choppy start, most of the Asian counters managed to close in the positive terrain on last trading day of the weak. However, gains remained capped by news that Japan’s factory production fell a worse-than-expected 1.2 percent in February, its first decline in three months, as demand for exports weakened.

After a choppy start, most of the Asian counters managed to close in the positive terrain on last trading day of the weak. However, gains remained capped by news that Japan’s factory production fell a worse-than-expected 1.2 percent in February, its first decline in three months, as demand for exports weakened.

Meanwhile, Japan’s Nikkei share average fell for a third straight session on Friday as investors pocketed gains from the strongest first quarter rally in 24 years, while the market waited on key global events next week for direction while, Hong Kong shares ended their best quarter in 2-1/2 years with a whimper on Friday, hit by a slump in local property developers after the arrest of the billionaire owners of Sun Hung Kai Properties on suspected corruption. Seoul managed to end on a flat note after a negative start. South Korea’s industrial production rose at a slower pace in February and the nation’s economy expanded less than the central bank initially estimated in the fourth quarter. Output rose 0.8 percent in February compared with a revised 3.2 percent gain in January.