Post session - Quick review

After showing bit correction in previous session, benchmark equity indices rallied significantly to end near the high points of the day. The murky macro-economic data reinforced expectations that the RBI could soon cut interest rates for the first time in three years to support the economy. The pace of expansion in industrial production, however, was at 4.1 percent, faster than a sharply revised 1.14 percent annual growth in January from 6.8 percent earlier.

Traders also scooped up bargains post previous session’s fall as they exhibited confidence entering the earning season, which would officially start with IT bellwether -Infosys- Q4 numbers tomorrow. However, March Inflation data, which is expected to have slowed down marginally to 6.70 percent from 6.95 percent in February, will also be eyed by traders in order to get further cues on RBI’s stance in its Annual monetary policy review.

Meanwhile, the barometer 30 share index -Sensex- on Bombay Stock Exchange (BSE) after dipping its head sub 17200 level, regained substantial traction to end above the 17300 bastion.  Bolstered by the gains in Metal, Bankex and Fast Moving Consumer Goods (FMCG) counters, barometer gauge did a splendid job in amassing colossal gains of over a 150 points or 0.75%. Nevertheless, almost all the counters on BSE sectoral front, ended in green, barring Information Technology (IT) and Technology (TECk) counters, which facing the brunt of profit booking, ended with a loss of over 0.75% each.

The widely followed National Stock Exchange (NSE)’s Nifty after accumulating over 50 points ended above the 5250 bastion. The index showcased substantial recovery to end above the crucial level. The trip of airline stocks post Cabinet deferring aviation FDI decision to next week also perturbed market. Immediate loser to this news were stocks of Spicejet, Kingfisher and Jet Airways. However, the broader indices too ended in fine contour as both midcap and small cap index went home with gains of over 0.75% each.

Indian equity markets borrowing some cues from regional counterparts managed to pull it well for the session. Asian markets managed to negotiate a green close amid reports of economy-boosting measures in China ahead of quarterly growth figures, even as concerns over sovereign funding for troubled euro zone economies Spain and Italy loomed large. Investors also treaded cautiously ahead of the release of China's first quarter economic growth figures on Friday, which are expected to confirm a slowdown this year. China's government earlier this year cut its annual growth target to 7.5 percent from the 8 percent level in place since 2005.

Meanwhile, European stocks diverged on Thursday, after bouncing back the previous day on easing euro zone concerns, as caution set in before a new bond auction in Italy and more crucial US economic data. Back home, the market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1657:1153 while 136 scrips remained unchanged. (Provisional)

The BSE Sensex gain 128.19 points or 0.75% and settled at 17,327.59. The index touched a high and a low of 17,395.15 and 17,276.87 respectively. 23 stocks advanced against 7 declining ones on the index (Provisional)

The BSE Mid-cap index gain 0.77% while Small-cap index was up 1.00%. (Provisional)

On the BSE Sectoral front, Metal up 2.07%, FMCG up 1.50%, Bankex up 1.49%, Auto up 1.07% and Capital Goods up 0.98% were the top gainers while IT down 1.09%, TECk down 0.73% and Realty down 0.09% were the only losers.

The top gainers on the Sensex were Jindal Steel up 4.92%, Sterlite Industries up 3.86%, SBI up 3.13%, Hindalco Industries up 2.86% and Maruti Suzuki up 2.61% while, Infosys down 1.69%, DLF down 1.49%, ONGC down 1.32%, Wipro down 1.26% and TCS down 0.81% were the top losers in the index. (Provisional)

Meanwhile, with sharp revisions in the numbers for January, the IIP number has continued its trend of being an unpredictable number. India’s industrial production grew by a small 4.1% in February, much lower than the expectation of 6.6-6.7%. The January’s IIP number was revised to a shocking 1.1% as compared to the 6.8% put out earlier. With the revision, the actual growth in industrial activity now stands at 3% (m-o-m).

Manufacturing activity, which accounts for about 76% of industrial output in the country, grew by 4% in February compared to 7.5% year-on-year. Mining sector growth, which had been underperforming for a while, has come in at a positive 2%. Electricity production grew at a good 8% against 6.7% a year ago.

The capital goods number was the brightest spot and grew by 10.6% in February as against a contraction of 5.7% in the same month last year. Nonetheless it has been the first positive number in the past 2-3 months. Intermediate goods grew by (-) 0.6%. Mining also posted a positive number of 2.1% after many months of negativity.

The consumer durables have recorded a negative growth of 6.7% year-on-year, with the overall growth in consumer goods being (-) 0.2%. Basic goods registered a growth of 7.5%. Consumer non-durables, which were earlier reported to have grown by 42.1% in January 2012, have now been revised to 11.1%. For the month of February they grew by 5.1%. These numbers have been showing a strengthening trend in the past 2-3 months.

Core sector, which contributes almost 38% to industrial production, grew by a sharp 6.8% in February from a year earlier. Core sector comprises key infrastructure industries of coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity.

Since the IIP numbers still remain low, it has bolstered the expectation of the RBI going in for a rate cut in its upcoming monetary policy review. Further, not much should be read in the month-on-month data as IIP trends are more important than the monthly numbers. The stock markets barely reacted to the February industrial output numbers but the effect was reflected in bonds that rallied after the February numbers were released; consequently rupee fell marginally.

India VIX, a gauge for market’s short term expectation of volatility lost 2.28% at 21.78 from its previous close of 22.29 on Wednesday. (Provisional)

The S&P CNX Nifty gain 44.40 points or 0.85% to settle at 5,271.25. The index touched high and low of 5,290.60 and 5,246.75 respectively. 38 stocks advanced against 12 declining ones on the index. (Provisional)

The top gainers on the Nifty were Jindal Steel up 5.08%, Reliance Communications up 4.18%, Sterlite Industries up 3.97%, ACC up 3.54% and Hindalco Industries up 3.19%.On the other hand, Cairn India down 2.45%, Dr. Reddy’s Lab down 2.25%, Infosys down 1.94%, Wipro down 1.77% and DLF down 1.24% were the top losers. (Provisional)

The European markets were trading on a mix note, with France's CAC 40 down 0.67%, Germany's DAX up 0.13% and Britain’s FTSE 100 down 0.27%.

Sentiments turned bullish in the Asian region after three days of continuous downfall and stock markets in the Asian Pacific region ended on a higher note following rebound on Wall Street overnight. Barring, Seoul Composite all the Asian counters ended the day’s trade in the positive terrain, but gains were held in check as investors tread cautiously ahead of the release of Chinese first quarter economic growth figures on Friday, which are expected to confirm a slowdown this year. The Chinese government earlier this year cut its growth target for 2012 to 7.5 percent from the 8 percent level in place since 2005.

Meanwhile, Japanese Nikkei closed 0.70 percent higher despite concern over North Korea’s planned rocket launch, which has been met with a chorus of international protest while, Shanghai Composite surged over 1.80 percent as the World Bank’s downward revision of its forecast for China's 2012 economic growth heightened expectations of further monetary easing measures in the coming months. However, Seoul Composite edged lower in the trade to its fresh one-month low on Thursday as North Korea prepared to launch a long-range rocket in defiance of international warnings. The sentiments also weighed down by foreign selling as investors cashed in on blue-chips following a lengthy, earnings-backed rally with focus seen moving beyond first-quarter results.