Benchmarks end near intraday high; Nifty re-conquers 5,900 level

Boisterous benchmarks, snapping three consecutive sessions of downfall, showcased an enthusiastic performance on Thursday by rallying a percentage point. Despite an initial collapse, on reports that some banks are involved in money laundering, markets witnessed an exceptional bounce back and there appeared not even an iota of profit booking as the benchmarks managed to fervently gain from strength to strength as investors continued hunt of fundamentally strong but oversold stocks. Frontline indices managed to finish the session near intraday high settling above 5,900 (Nifty) and 19,550 (Sensex) levels as investors took to hefty across the board buying.

The key indices extended their gains as investors continued piling up positions in rate sensitive counters on rate cut hopes despite high inflation data for the month of February. The Wholesale Price Index (WPI) for the month of February rose to 6.84 per cent versus 6.62 per cent in January. Even the December inflation numbers were revised upward to 7.31% from 7.18%. The upward pressure on inflation was mainly from Fuel & Power, which rose 3% for the month due to higher prices of LPG, furnace oil, lubricants and high speed diesel. Major support to the markets came in from rally in banking stocks like ICICI Bank, HDFC Bank and Axis Bank, which got relief after clarifying to the sting operation report, stated that they conducts business with the highest level of compliance to legal and regulatory requirements.

Recovery in most of the Asian equity indices also supported the domestic bourses. Japanese Nikkei average advanced on Thursday after two days of losses, as real estate companies rebounded ahead of the confirmation of Bank of Japan leadership nominees by parliament. Chinese Shanghai was trading slightly higher despite concern that policy makers will expand efforts to cool the housing market. Positive opening in European counters too buttressed the domestic sentiments.

Back home, some strength to the markets also came in after public sector oil marketing companies like BPCL, HPCL and IOC edged higher on reports that diesel price may be hiked by 40-50 paise per litre from March 15/16. However, it was also reported that petrol price may be slashed by Rs 1 per liter. The infra stocks too remained on the buyers’ radar after the Supreme Court allowed delinking the two clearances as sought by the Ministry of Environment and Forest (MoEF).

The NSE’s 50-share broadly followed index Nifty gained by over fifty points to regain its psychological 5,900 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex rose by over two hundred points to finish above its psychological 19,550 mark. The broader markets tried to get some traction and ended the session mixed. 

The overall volumes stood at over Rs 2.70 lakh crore, which remained on the higher side as compared to that on Wednesday. The market breadth has been divided mostly even as there were 1,420 shares on the gaining side against 1,446 shares on the losing side while 118 shares remain unchanged.

Finally, the BSE Sensex surged 207.89 points or 1.07% to settle at 19,570.44, while the CNX Nifty climbed by 57.75 points or 0.99% to end at 5,908.95.

The BSE Sensex touched a high and a low of 19,604.70 and 19,179.33, respectively. The BSE Mid cap index up by 0.48% and Small cap index was down by 0.09%.

The top gainers on the Sensex were, SBI up by 3.51%, Maruti Suzuki up 3.43%, Tata Power up 2.86%, ICICI Bank up 2.29% and HDFC Bank up 2.28%, while Gail India down by 2.09%, Bajaj Auto down by 2.05%, Sun Pharma down by 0.93%, Bharti Airtel down 0.82% and Hero MotoCorp down by 0.14% were the top losers on the index.

On the BSE Sectoral front, Realty up by 2.18%, Bankex up by 2.08%, Capital Goods up by 1.34%, Oil & Gas up by 1.26% and Metal down by 0.89%, were the top gainers, while Consumer Durables down by 1.45% was the sole loser in the space.

Meanwhile, dimming hopes of a rate cut by the central bank at its policy meet next week, the Reserve Bank of India (RBI) Governor Duvvuri Subbarao reiterating his concern about persistently high inflation said, 'stubborn' inflation remains a major obstacle to growth in India. By adding further he said, it is not possible to bring inflation down without sacrificing some growth. But one has to realize that growth sacrifice is only in the short term.

In defence of criticism that the RBI is damaging growth by not cutting interest rates quickly enough, the governor said 'in the medium term, low inflation - price stability - is very important for sustained growth'. The RBI leaving its 9-month long hawkish monetary policy stance slashed key interests rates and reduced CRR by 25 basis points after a fall in inflation.

Meanwhile, Indian business leaders and the government have been calling for lowering the interest rates from last one year to help the economy, which is struggling with slowdown and expected to post its slowest growth in a decade at around 5-percent for the fiscal year that ends in March.

Moreover, in a big sign of disappointment, after falling to a multi-year low in January 2013, the annual rate of inflation, based on monthly WPI, again inched higher to 6.84% for the month of February, 2013 as compared to 6.62% for the previous month. However, non-food manufacturing inflation, which the apex bank uses to gauge demand-driven price pressures slowed to 3.8% in February, the weakest pace since March 2010.

The CNX Nifty touched a high and a low of 5,920.15 and 5,791.75 respectively. 

The top gainers on the Nifty were Maruti Suzuki up by 3.55%, SBI up 3.47%, Ranbaxy up 3.33%, Tata Power up 3.16% and BPCL up by 2.68%.

On the flip side, the top losers of the index were, Bajaj Auto down by 2.22%, GAIL down by 2.03%, Bharti Airtel down by 1.23%, Sun Pharma down by 0.88% and Hero MotoCorp down by 0.44%.

The European markets were trading in green, France’s CAC 40 up by 0.54%, Germany’s DAX up by 0.21% and the United Kingdom’s FTSE 100 up by 0.55%.

Asian markets ended mixed on Thursday, as regional concerns outweighed the positive tone from another record Wall Street close, while the dollar index held near seven-month highs after strong retail sales bolstered the US economic outlook. Japan's Nikkei went home with strong gains as dollar climbed against the yen after Japan's parliament agreed the government's nominees to lead the Bank of Japan. Regional markets closed marginally higher fuelled by growing confidence in the global economy.