Post session - Quick review

Bourses gained momentum in a volatility marred session on the back of positive global set up as funds and retail investors continued buying with the start of the new fiscal year, hoping for more government spending and a vigilant RBI, which till now has abstained from pruning key policy rates. However, barometer gauges after posting colossal gains of close to two percentage points in the previous session, consolidated in the first session of the holiday truncated week. The Bombay Stock Exchange’s -- Sensex-- after facing stiff resistance post piercing the 17500 crucial level, retreated to end with gains of over 75 points. However, the National Stock Exchange's -- Nifty -- although cooled off from the high point of the day, but still finished off holding its 5300 psychological level. The session, however, belonged to the broader indices, which rallied over a percentage points.

The first session of the new financial year got a promising end if not start, as the bourses after getting a muted start depicted some choppiness only to firm up later in the day. Market men brushing aside the tepid-macro-economic data scooped up blue-chip stocks.  Meanwhile, the expansion of India's factory sector slowed for a third month in March as growth in new orders eased and costs for raw materials kept rising, as HSBC manufacturing Purchasing Managers' Index (PMI), compiled by Markit, eased to 54.7 in March from 56.6 in February.

However, the market men also over looked the worrying trade deficit data, which for the month of February swelled to $15.2 billion from $14.8 billion in January. The key take away of the session was the spurt of power stocks like Adani Power, Tata Power Company, CESC, which were spellbound post Tamil Nadu Electricity Regulatory Commission (TNERC) approved a steep 37% hike in power tariff for one year, effective from April 1.  Meanwhile, support also came in through banking stocks, which firmed up on expectation that the cash crunch that had constrained the sector in March will ease in the new fiscal year.

Global indices too buttressed the sentiment for Indian equity markets as Asian shares kicked of the second quarter with modest gains on Monday; surprisingly firm China manufacturing data dispelled fears of a hard landing in the world's second biggest economy. The regional, bourses touched an intra-day high post optimistic opening of European markets.

Back on the home turf, Auto stocks ended in red after reporting their monthly sales numbers. Losses were seen in Bharat Forge, Maruti Suzuki, Cummins India, while Tata Motors and M&M surged over 0.50%.  Accompanying Auto stocks, were stocks from Oil & Gas counters, which edged lower post much expected hike on petrol in the past weakened was not delivered. However, the rally of domestic bourses were led by stocks belonging to Consumer Durable and Capital Goods counters, besides banking and power index. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1930:845 while 104 scrips remained unchanged. (Provisional)

The BSE Sensex gained 87.71 points or 0.50% and settled at 17,491.91. The index touched a high and a low of 17,529.98 and 17,382.38 respectively. 20 stocks advanced against 10 declining ones on the index (Provisional)

The BSE Mid-cap index gain 1.21% while Small-cap index was up 1.82%. (Provisional)

On the BSE Sectoral front, Consumer Durables up 4.14%, Power up 1.96%, Capital Goods up 1.80%, Realty up 1.67% and PSU up 1.07%were the top gainers while Metal down 0.25%, Oil & Gas down 0.22%, Health Care down 0.07% and Auto down 0.01% were the only losers.

There top gainers on the Sensex were NTPC up 2.89%, DLF up 2.63%, TCS up 2.21%, L&T up 2.15% and SBI up 1.96% while, Bajaj Auto down 1.42%, Sterlite Industries down 1.13%, Maruti Suzuki down 1.06%, HUL down 0.95% and Hindalco Industries down 0.85% were the top losers in the index. (Provisional)

Meanwhile, manufacturing activity in India has declined marginally in the month of March as compared to February, as per the HSBC PMI numbers. The seasonally adjusted HSBC Purchasing Managers’ Index (PMI) - a headline index designed to measure the overall health of the manufacturing sector - registered 54.7 in March, down from February’s 56.6. It stood at 57.5 in January. Though the numbers have been above the 50 mark that separates growth from contraction, they are tad disappointing.

The rate of expansion has been the weakest in three months. This has been attributed to shortages in power supply and increasing prices of raw materials. Even though demand has improved, the manufacturers’ propensity to process new orders has been limited due to these shortages. As a result customers have also been hesitant in placing new demands. There has also been a marked increase in the backlog of work, in fact the fastest in the history of the series and an increase in delivery timing. 

On a more positive note, new export order growth gained momentum in March. Employment also went up marginally to accommodate the increase in output. On the inflation front, while inflation of output prices has eased, the prices of raw materials have increased. This suggests that inflation could pick up again as cost pressures are passed on to customers. Given these upside risks to inflation the RBI's easing cycle, in terms of timing and magnitude, depends on the extent to which these risks materialize.

The HSBC PMI number is closely followed as it is a fairly good indicator of the level of industrial activity in the country. In fact in the past these numbers have been more accurate than the government’s estimates. Even though the numbers have been declining for the third consecutive month, they are depicting a consolidating growth trend.

India VIX, a gauge for market’s short term expectation of volatility lost 6.70% at 20.88 from its previous close of 22.38 on Friday. (Provisional)

The S&P CNX Nifty gain 23.45 points or 0.44% to settle at 5,319.00. The index touched high and low of 5,331.55 and 5,278.80 respectively. 32 stocks advanced against 17 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were Reliance Infrastructure up 4.22%, Reliance Power up 4.14%, HCL Tech up 4.02%, JP Associates up 3.98% and DLF up 3.00%.On the other hand, BPCL down 2.17%, Ranbaxy down 2.02%, Dr Reddy’s Lab down 1.55%, Sterlite Industries down 1.49% and Hindalco Industries down 1.47% were the top losers. (Provisional)

The European markets were trading mixed, with France's CAC 40 down 0.22%, Germany's DAX up 0.23% and Britain’s FTSE 100 up 0.45%.