Post session - Quick review

Indian equity markets witnessed a smart pull back rally, coming out of the disappointment of the ‘Union Budget’. Traders lapped up the valued stocks considering them to be in oversold zone after the budget carnage. It was not any sector specific surge but a broad based buying in the markets that once again took the major indices, Sensex and Nifty above their psychological levels of 19000 and 5750 respectively. The mood of the markets remained sanguine since the early morning, tailing global cues, as the US markets closed in green, rebounding from their early losses, while the majority of the Asian markets looked in jovial mood after the Chinese government maintained its economic-growth target at 7.5 percent for 2013, while setting a lower inflation goal of 3.5 percent. The European markets too made a strong start.

It was mainly the value buying that helped the domestic markets recover from the multi-month lows suffered in last few sessions, many of the individual beaten down stocks recovered as traders sensed markets bottoming out, giving an opportunity to invest at lower levels. However, on the economic front the news were not very supportive and India’s services sector despite remaining in growth zone increased at a notably slower pace in February amid a decline in new business orders. The HSBC India Services PMI dropped to 54.2 in February from 57.5 in January. It was the first drop in India’s Services PMI since November last year. Not only this, the HSBC India composite output index, which measures activity in both the manufacturing and services sector, declined to 54.8 in February from 56.3 in January. Also there were some concerns raised for the high CAD levels, government’s chief economic adviser Raghuram Rajan said that India’s record-high current account deficit is a major worry as it is increasing the dependence on foreign investments, making the country vulnerable to a sudden stop and reversal in fund inflows.

Back on the street, traders overlooking the economic worries continued buying in the beaten down stocks and markets never looked giving up gains, continuously strengthening till last, with Nifty posting its best percentage gain since Nov 29, while Sensex surging close to 250 points for the day. Sectorally, there was not a single underperformer with each and every index closing in green on the BSE, however, the day was marked by the hefty gains in realty, which moved up by over three and half a percent, closely followed by metal with about three percent gains. Banking, auto and capital goods too gained over one and half a percent. Oil & gas sector too kept buzzing as Oil India reported a “significantly big” discovery in the Rajasthan field and after the Defence Ministry, in response to a direction by the Cabinet Committee on Investment (CCI), gave a partial go-ahead to two oil and gas blocks in areas near defence installations. On the same time the IT sector strengthened despite rupee strength, on hopes of demand growth as speculation turned rife that central banks around the world will continue with stimulus measures to support economy. There were lots of scrip specific movements too, that boosted the investors’ sentiments, Essar Oil surged by over 20% after the ministry of environment and forests granted the phase-III clearance for the company’s Raniganj block in West Bengal. Kingfisher Airlines was locked at upper circuit limit on report that its promoter Vijay Mallya is likely to meet Finance Minister P Chidambaram tomorrow and financial trouble of the carrier will be on agenda for discussions.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1682: 1140 while 111 scrips remained unchanged. (Provisional)

The BSE Sensex gained 248.32 points or 1.32% to settle at 19126.28. The index touched a high and a low of 19164.04 and 18943.62 respectively. 24 stocks advanced while 6 stocks declined on the index. (Provisional)

The BSE Mid cap and Small cap indices rose by 1.76% and 1.20% respectively. (Provisional)

On the BSE Sectoral front, Realty was up by 3.66%, Metal was up by 2.68%, Bankex was up by 1.76%, Auto was up by 1.73% and Capital Goods up by 1.62% were the top gainers, while there were the no losers in the space. (Provisional)

The top gainers on the Sensex were Sterlite Industries up by 4.69%, Hindalco Industries up 4.66%, Tata Motors up by 3.95%, Wipro up by 3.32% and ICICI Bank up by 3.01%, while Bajaj Auto down by 1.12%, NTPC down by 0.67%, BHEL down by 0.60%, ITC down by 0.24% and HDFC down by 0.13% were the top losers on the index. (Provisional)

Meanwhile, optimistic about India’s export performance, Commerce and Industry Minister Anand Sharma said, India would touch the $300 billion-mark in exports for this fiscal, as shipments for February and March are expected to be in the positive zone, though it remains a challenge for the country. As part of the pre-Foreign Trade Policy (FTP) stakeholder consultations, the minister met members of industry body CII.

In January, after a gap of eight months, India's exports made a marginal recovery and entered the positive zone, recording a growth of 0.82 percent to $25.58 billion. Though, trade deficit widened to $20 billion in January, the second highest figure ever in a month due to huge increase in import. However, during the April-January period, overseas shipments shrunk by 4.86 percent to $239.6 billion.  

By adding further, Sharma said the government and the export promotion councils are putting all efforts to reach the $300 billion-export mark against the $360 billion target set for 2012-13. On the forthcoming FTP, he said ‘the government will formulate a policy this time, which can boost exports and bring down the transactions cost and also improve the access to credit and the cost to credit.’

In the pre-FTP meeting, CII President Adi Godrej also suggested the government to take steps including extension of 2 percent interest subvention to all sector and expressed the need to make overall environment more conducive to boost exports. On long-term strategy, he added that there is a need to reduce time in taking decisions and getting approvals. Further, to push services exports, India should look for investment led services exports in sectors like financial services, health, education and telecommunication as this could be a part of India’s strategy to capture newer markets in the South.

India VIX, a gauge for markets short term expectation of volatility lost 2.04% at 13.39 from its previous close of 15.43 on Monday. (Provisional)

The CNX Nifty gained 82.90 points or 1.45% to settle at 5,781.40. The index touched high and low of 5,790.10 and 5,722.40 respectively. 43 stocks advanced against 6 declining ones and one stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were Sesa Goa up by 5.27%, Hindalco up by 4.72%, HCL Tech up by 4.28%, Ambuja Cements up by 4.25% and Tata Motors was up by 4.09%. On the other hand, Bajaj-Auto down by 1.22%, BHEL down by 0.67%, NTPC down by 0.23%, HDFC down by 0.05% and Kotak Bank down by 0.01% were the top losers. (Provisional)

Most of the European markets were trading in green with, Germany’s DAX up by 1.63%, the United Kingdom’s FTSE 100 up by 0.75% and France’s CAC 40 down by 1.40%.

Snapping earlier session’s sharp fall, Asian markets recovered sharply and ended mostly higher on Tuesday, with Japan’s Nikkei extending gains on hopes for further monetary easing under a new central bank chief. The Shanghai Composite Index bounced back after earlier session’s losses and closed higher as the National People's Congress - the country's parliament - began its annual session, although property developers fell further under the lingering influence of fresh restrictions imposed on the sector late last week.