Post session - Quick review

Markets strongly rebounded from three month’s low of the previous session on the back of encouraging Economic Survey of 2012-13 and positive global peers. Investors took a heart from the survey report which presented Indian economy in a good light going further. The survey, which estimated the downturn to more or less be over for the Indian economy, estimated the growth at 6.1-6.7% in FY14 and inflation to fall to 6.2-6.6 per cent in March, which in turn would provide Reserve Bank of India with more room for rate cuts. However, the key takeaway of the report was the fiscal deficit factor, as the Survey noted that FY13 fiscal deficit be contained at 5.3 per cent of GDP despite a significant shortfall in revenue, important factor for the economy because of the looming threat of a potential downgrade to India's sovereign rating to junk status. Thus, after suffering triple digit losses in the previous session, Sensex, gaining over century points, ended above the crucial 19100 level. Likewise, Nifty, too accumulated over half a percent, to conclude near the crucial 5800 level. Markets, after getting a gap-up start went on scaling highs, witnessed mild profit-booking towards the dying hours of the trade, as wary investors remained cautious ahead of the key event Union Budget 2013-2014, to see whether the Fiscal deficit ghost could be brought under the targeted figure. However, F&O expiry in tomorrow’s session also led to some profit-booking.

On the global front, Asian shares rebounded on Wednesday, tracking US stocks higher as the Federal Reserve reassured markets of its commitment of strong monetary stimulus, even as select investors remained worried over political gridlock in Italy, reigniting the euro zone financial crisis. Further having fallen in the previous session, European shares were trading mixed as Italy prepared to test the reaction to its inconclusive election in the bond market.

Back home, benchmarks drew strong support from the up-move of Capital Goods, Realty and Oil & Gas sector, on the flip side, IT, Technology and Health Care space, were the dark spots in the bright trade. While, Realty stocks edged higher on hopes the government will announce sops for the housing sector in Union Budget. Further, Construction stocks also gained momentum after the Economic Survey 2012-13 noted that the government has taken several initiatives to expedite highway projects under the National Highway Development Project (NHDP). Besides, the Telecom stocks, Bharti Airtel topped, amid reports that the government is likely to cut the reserve price for airwaves after just one company Sistema Shyam bid for the spectrum sale next month. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1451: 1355 while 124 scrips remained unchanged. (Provisional)

The BSE Sensex gained 135.66 points or 0.71% to settle at 19150.80. The index touched a high and a low of 19213.02 and 18997.82 respectively. 22 stocks were seen advancing while 8 stocks were declining on the index. (Provisional)

The BSE Mid cap and Small cap indices declined by 0.75% and 0.32% respectively. (Provisional)

On the BSE Sectoral front, Realty was up by 2.33%, Capital Goods was up by 2.23%, Oil & Gas was up by 1.24%, FMCG was up by 1.21% and Power up by 1.07% were the top gainers, while IT down by 1.00%, TECk down by 0.29% and Health Care down by 0.15% were the only losers in the space. (Provisional)

The top gainers on the Sensex were  Mahindra & Mahindra up by 3.46%,  ONGC up 3.00%, Bharti Airtel up by 2.79%, L&T up by 2.76% and Bajaj Auto up by 2.71%, while, Gail India down by 1.84%, Infosys down by 1.59%, Hero MotoCorp down by 1.14%, Coal India down by 1.10% and Tata Motors down by 1.00% were the top losers in the index. (Provisional)

Meanwhile, after the central bank released the final guidelines for new banking licences, which said an applicant should be “fit and proper” for getting a licence and have a 10-year impeccable track record. Reserve Bank of India’s (RBI) Deputy Governor K. C. Chakrabarty has opined that RBI is open to let realty and brokerages run banks, if they meet the “fit and proper criteria” as detailed in the final guidelines. Chakrabarty emphasized that realtors and brokerages carry out legitimate business and said “if they can demonstrate that they satisfy all the requirements, all the concerns how can you deny them. Definitely, if this is not in the guidelines, then it is open”.  

The final guidelines by the RBI allowed business houses, state-run enterprises and non-banking finance companies (NBFCs) to apply for licences to set up banks, making a climb-down from the initial stance, which had virtually barred Realtors and brokerages from its eligibility criteria, terming in its draft guidelines certain activities, such as real estate and capital market activities, in particular broking activities, which apart from being inherently riskier, represent a business model and business culture which are quite skewed with a banking model.

Chakrabarty said that the number of new banks would depend on the number of eligible and ‘fit and proper’ applicants and no additional time would be given to the new banks to follow cash reserve ratio, statutory liquidity ratio and priority-sector lending requirements, and they are expected to start following the norms from day one.

India VIX, a gauge for markets short term expectation of volatility lost 6.50% at 16.23 from its previous close of 17.36 on Tuesday. (Provisional)

The CNX Nifty gained 34.45 points or 0.60% to settle at 5,795.80. The index touched high and low of 5,818.20 and 5,749.70 respectively. 28 stocks advanced against 22 declining ones on the index. (Provisional)

The top gainers on the Nifty were JP Associate up by 5.58%, M&M up by 3.38%, DLF up by 3.14%, Bharti Airtel up by 3.09% and L&T was up by 2.95%. On the other hand, Ranbaxy down by 4.39%, Power Grid down by 1.98%, Siemens down by 1.84%, GAIL down by 1.82% and Kotak Bank down by 1.64% were the top losers. (Provisional)

Most of the European markets were trading in green with, Germany’s DAX up by 0.04%, the United Kingdom’s FTSE 100 up by 0.24% and France’s CAC 40 down by 0.02%.

Snapping earlier session’s losses, most Asian markets closed higher on Wednesday, as investors sentiments were boosted with solid US data and the Federal Reserve's re-dedication to monetary stimulus, taking Italy's political gridlock in stride. However, Japan's Nikkei went home with red mark as the yen firmed hurting exporters. Meanwhile, Hong Kong’s market ended marginally higher amid speculation that policymakers in Beijing will take steps to bolster equities.