Jubilation continues for second consecutive day; Nifty re-conquers 5,800 bastion

Extending their previous session’s jubilation, Indian frontline equity indices took a quantum leap with both the key benchmarks vehemently re-conquering the psychological 19,250 (Sensex) and 5,800 (Nifty) levels led by significant buying in real-estate, banking and automobile stocks amid optimism that the Reserve Bank of India (RBI) may cut interest rates in March policy to boost growth. The frontline indices throughout the session traded firmly as enthusiastic investors focused on hefty bottom fishing in fundamentally strong equities. Markets gained strength after global rating agency S&P reportedly said that it expects India’s FY14 GDP growth at 6.4% and FY15 figure at 7.2%. S&P also expects a turnaround in Indian corporate sector for mid-FY14.

Risk appetite in global markets also remained bullish after US service-industry growth gained momentum, amid speculation that the US Federal Reserve will continue its accommodative monetary policy stance taking Dow Jones Industrial Average index to record-high on Tuesday. Asian markets shut shop on higher note with China’s Shanghai Composite Index gaining over half a percent after outgoing Chinese Premier Wen Jiabao promised increased fiscal spending. Rally in European markets in early deals also boosted the investors’ confidence.

Back home, sentiments at D-street also got buttressed with Chief economic adviser to the government Raghuram Rajan’s statement that there are signs of economic recovery as inflation is on the decline and exports are looking up. The strength in the markets also came in on the buzz that Securities and Exchange Board of India has formed a panel to review insider trading rules to curb the rising menace of the illegal practice. Meanwhile, Mauritius promised to address India's concerns on possible misuse of tax avoidance treaty between the two countries, while ensuring its commercial viability, on mutually acceptable terms.

Support also came in from buying in software counter as stocks like Infosys, TCS, Wipro and HCL Technologies edged higher on positive economic data in the United States, the biggest outsourcing market for the Indian IT firms. Metal stocks remained on the buyers’ radar for the second day in a row after China on March 5, 2013, announced economic growth target of 7.5% for 2013. Moreover, sugar stocks like Rana Sugars, Shree Renuka Sugar, Uttam Sugar and Balrampur Chini Mills all edged higher for second day in a row on reports that the government may consider easing curbs on the sugar sector.

The NSE’s 50-share broadly followed index Nifty rose by over thirty points to end above the psychological 5,800 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by about one hundred and ten points to finish above the psychological 19,250 mark. Moreover, broader markets outperformed benchmarks and snapped the session with a gain of over one and a half percent.

The overall volumes stood above Rs 1.23 lakh crore, which remained on the lower side as compared to that on Tuesday. The market breadth remained in favor of advances as there were 1,729 shares on the gaining side against 1,116 shares on the losing side while 132 shares remain unchanged.

Finally, the BSE Sensex gained 109.44 points or 0.57% to settle at 19,252.61, while the CNX Nifty rose by 34.35 points or 0.59% to end at 5,818.60.

The BSE Sensex touched a high and a low of 19,293.39 and 19,195.47, respectively. The BSE Mid cap index up by 1.14% and Small cap index was up by 1.50%.

The top gainers on the Sensex were, Sterlite Industries up by 4.60%, Hindalco up 3.25%, Tata Motors up 2.88%, L&T up 2.86% and Tata Steel up 2.59%, while M&M down by 2.16%, Hindustan Unilever down by 1.98%, ITC down by 1.57% and Maruti Suzuki down by 1.21% were the top losers on the index.

The top gainers on the BSE Sectoral space were, Realty up 4.52%, Capital Goods up 2.47%, Metal up 2.20%, IT up 1.32% and TECk up 1.04%, while FMCG down by 1.05% and Consumer Durables down by 0.44% were top losers on the sectoral space.

Meanwhile, to sort out the differences on issues relating to the disputed land acquisition bill, the Government has decided an all party meeting on March 7. The Government does not want to send the bill again to the standing committee and hence decided to call the all-party meeting to find out a compromise. The meeting will discuss about certain clauses in the bill including compensation package and rehabilitation.

The land acquisition bill, which was moved in the Winter Session of Parliament, is likely to be taken up for discussion in the ongoing session.

Earlier, in December, the Union Cabinet cleared the controversial land acquisitions bill. With the new land acquisitions law, the government hopes to make easy land acquisition and also remove bureaucratic hurdles that hold up highway projects that have become a roadblock for the economic growth.

According to the provisions of the bill, permission of 80% of landowners would be required to acquire land for private industrial projects and in case of Public-Private Partnership projects permission of 70 percent of the landowners would be mandatory. However, no permission would be required in case of projects acquired for government purpose. The bill also has provisions to return the unutilized land to the land losers.

The CNX Nifty touched a high and a low of 5,828.70 and 5,795.05 respectively. 

The top gainers on the Nifty were JP Associates up by 5.67%, IDFC up 4.75%, DLF up 3.92%, Sesa Goa up 3.41% and Hindalco up by 3.30%.

On the flip side, the top losers of the index were, HUL down by 2.10%, M&M down by 1.96%, ITC down by 1.71%, BPCL down by 1.12% and Power Grid down by 1.01%.

The European markets were trading in green, France’s CAC 40 up by 0.18%, United Kingdom’s FTSE 100 up by 0.12% and Germany’s DAX up by 1.02%.

Asian markets ended with excellent gains on Wednesday following a record-breaking performance by shares amid better than expected economic data from the United States. Japan's Nikkei 225 closed higher after touching its highest intraday level since September 2008, ahead of Bank of Japan’s policy meetings on March 7. Meanwhile, China stocks went home with green mark continuing to recover from Monday's sharp drop, with the annual session of the National People's Congress in full swing. Hong Kong, also ended on a positive note as Standard Chartered gained sharply after the emerging markets-focused bank posted a tenth consecutive year of record profits.