Bulls make comeback on Dalal Street; Nifty reclaims 10,200 mark

Monday turned-out to be a fabulous day of trade for Indian equity benchmarks with frontline gauges recapturing their crucial 10,200 (Nifty) and 33,200 (Sensex) levels, ahead of the RBI policy meeting on April 4-5, although the central bank is unlikely to raise rates despite increased risks to inflation posed by rising oil prices and a hike in minimum support price (MSP) announced in the Budget 2018. After making a mildly positive start, local bourses extended gains with State Bank of India’s (SBI) research report Ecowrap stating that the Index of Industrial Production (IIP) may grow in the range of 8-9% in February and March 2018, with a healthy growth in SBI Composite Index, an indicator for tracking India's manufacturing activity. Traders also took some encouragement with Chief Economic Adviser Arvind Subramanian’s statement that GST and demonetisation are done and India can now propel itself into a higher growth trajectory. Some optimism also came with Niti Aayog CEO Amitabh Kant’s statement that India will reap benefits of the structural and institutional reforms in the next couple of years.

Traders shrugged off report that India’s fiscal deficit accelerated to Rs 7.15 lakh crore for the period April-February 2017-18 or 120.3% of the budgeted target for the current fiscal year. Net tax receipts in the first 11 months of 2017/18 fiscal year were Rs 1.03 trillion. Traders also ignored a private report that the value of private equity and venture capital investments in Indian companies during the quarter ended March 2018 declined 49 per cent to $3.7 billion across 133 deals, compared with $7.3 billion across 200 deals during the same quarter the previous year. Meanwhile, the e-way (electronic way) bill system under Goods and Services Tax (GST) for inter-state movement of goods has come into force from April 1, with over 1.7 lakh electronic invoices expected to have generated on the first day of the rollout aimed at curbing tax evasion by traders and transporters.

On the global front, Asian markets ended in red despite Chinese manufacturing activity expanded at its weakest pace in four months in March, as export demand faltered, prompting companies to shed staff more quickly as they looked to cut costs. The Caixin/Markit Manufacturing Purchasing Managers’ index (PMI) fell to 51.0 in March from February’s 51.6. The European markets remain closed on account of ‘Easter Monday’ holiday.

Back home, rating agency CRISIL warned that the ongoing probes into the frauds and allegations of improprieties against bankers will dent credit growth in the new fiscal year. The agency expects gross NPAs to shoot up to 11 percent in the March quarter from 9.4 percent a year ago, and inch up further to hit a peak of 11.5 percent during the fiscal but will slip to 10.3 percent in March 2019. Meanwhile, the CBI has decided to examine ICICI Bank CEO Chanda Kochhar over the Rs 3,250 crore loan sanctioned to the Videocon Group in 2012, notwithstanding a clean chit given by the bank board. On the sectoral front, stocks related to Auto space remained in top gear on reporting monthly data for the month of March. Power companies edged higher on report that power companies are expecting better margins this summer owing to higher electricity demand on the back of rising temperatures earlier than previous years.

Finally, the BSE Sensex surged 286.68 points or 0.87% to 33,255.36, while the CNX Nifty was up by 98.10 points or 0.97% to 10,211.80.

The BSE Sensex touched a high and a low of 33,289.34 and 32,997.88, respectively and there were 26 stocks on gaining side as against 5 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index surged 1.40%, while Small cap index was up by 2.35%.

The top gaining sectoral indices on the BSE were Industrials up by 2.51%, Healthcare up by 2.48%, Auto up by 2.14%, Capital Goods up by 2.03% and Basic Materials was up by 2.01%, while Bankex down by 0.37%, PSU down by 0.14% and Oil & Gas was down by 0.13% were the few losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 4.65%, Adani Ports & SEZ up by 4.55%, Tata Motors up by 3.47%, Tata Motors - DVR up by 3.45% and Wipro up by 2.95%. On the flip side, ICICI Bank down by 5.93%, Axis Bank down by 2.20%, Coal India down by 2.01%, SBI down by 1.52% and Bharti Airtel down by 1.12% were the top losers.

Meanwhile, State Bank of India’s (SBI) research report Ecowrap has stated that the Index of Industrial Production (IIP) may grow in the range of 8-9% in February and March 2018, with a healthy growth in SBI Composite Index, an indicator for tracking India's manufacturing activity. As per the report, the yearly SBI Composite Index for March 2018 stands at 54.2 (moderate growth), against 55.0 (moderate growth), in February 2018. It also noted that the month-on-month index has increased to 53.4 (moderate growth) in March 2018 compared to last month's index of 50.1 (low growth).

As per the report, the infrastructure sector is a focus area of the government and a large number of projects have been announced in sectors such as road, railways, chemicals, electricity, non-conventional energy and others. It highlighted that in the road and railways sectors, projects worth Rs 12,991 billion were announced in the last three years and Rs 1,695 billion of projects were announced in the first half of fiscal year 2018. It also indicated that the government’s share in terms of project announcement has increased significantly to 71% in FY17 as compared to 46% in FY13. It added that in FY17, the share of private sector has plunged to 28% as against 50% in FY13. However, it pointed out that foreign private sector exhibited an increase share and said that foreign private sector has shown confidence in Indian economy’s growth story.

Besides, India’s industrial output surged to 7.5% in the month of January 2018, as compared to 3.5% in the same month of the previous year and 7.1% in December 2017, backed by a higher manufacturing and electricity production. The manufacturing sector, which accounts for more than three-fourths of the entire index, soared 8.7% in January as compared to 2.5% in the same month of last year and 8.5% in December 2017. Electricity production showed an improvement, increased to 7.6% in January, as compared to 5.1% a year ago and 4.4% in December.

The CNX Nifty traded in a range of 10,220.10 and 10,127.75. There were 39 stocks in green as against 11 stocks in red on the index.

The top gainers on Nifty were Cipla up by 5.97%, Lupin up by 5.86%, Kotak Mahindra Bank up by 4.50%, Adani Ports & SEZ up by 4.49% and Tata Motors up by 4.15%. On the flip side, ICICI Bank down by 5.73%, Indian Oil Corporation down by 3.48%, Axis Bank down by 2.19%, State Bank of India down by 1.56% and Coal India down by 1.31% were the top losers.

The European markets were closed on account of ‘Easter Monday’ holiday.

Asian stocks closed mostly in red on Monday with muted trading as markets in Hong Kong were closed for the Easter holiday. US financial markets will open later today following Easter while European financial markets will be closed in observance of Easter Monday. Japanese shares closed lower after a closely-watched survey showed deteriorating business confidence in the first quarter. Japan's business confidence deteriorated in the first quarter on stronger yen and fears of trade war, the quarterly Tankan survey released by the Bank of Japan revealed. The business confidence index among large manufacturers dropped to 24 in March from 26 in December. This was the first fall in two years. Further, Chinese shares ended lower after manufacturing data out of China painted a mixed picture of the world's second-largest economy and China imposed tariffs on 128 types of US imports starting Monday. While official data pointed to accelerating growth in manufacturing activity in March, the Caixin survey revealed that China's manufacturing activity grew at its slowest pace in four months in the month.