Indian markets extend winning momentum for fourth straight session

Domestic benchmarks, extending the winning momentum for four back to back sessions, snapped the Tuesday’s trade with a gain of about a percent with both the frontline bourses recapturing their crucial 5,700 (Nifty) and 19,000 (Sensex) levels. After a choppy start, markets gained strength as sentiments got support from Finance Minister P Chidambaram’s statement that the Indian economy is capable of absorbing $50 billion foreign direct investment (FDI) annually. Domestic gauges extended their bull run supported by buying in Anil Dhirubhai Ambani Group (ADAG) stocks, viz. Reliance Industries, Reliance Communication, Reliance MediaWorks and Reliance Capital, after Reliance Jio and RComm reportedly signed Rs 1,200 crore agreement for sharing RComm optic fibre network.

Besides, positive global cues too aided the sentiments as European counters edged higher in early deals as Markit’s Eurozone Manufacturing Purchasing Managers’ Index (PMI) fell in March to 46.8 from 47.9 in February, slightly better than a preliminary estimate of 46.6, with the Cyprus bailout crisis yet to take a toll on the euro zone’s factory activity. PMIs for Germany and France were also slightly better than the preliminary readings. Meanwhile, Asian markets shut shop mostly in the green.

Back home, sentiments remained jubilant after consumer confidence levels rose in March owing to improved spending behaviour coupled with stable employment situation. The BluFin’s Consumer Confidence Index (CCI) rose to 41.8 points in March, an increase of 1.1 points from the preceding month. Investors’ confidence also got some boost after foreign institutional investors (FIIs) bought shares worth a net Rs 313.07 crore on April 1, 2013. Buying in oil and gas counter mainly supported the sentiments with RIL and Cairn India surging between 2-3 percent each. Auto space, after a negative start, too ended in green after oil marketing companies cut petrol prices by a rupee from April 2, 2013.

Sentiments also got some support after shares of sugar manufacturer viz. Bajaj Hindustan, Shree Renuka Sugars, Balrampur Chini Mills, Rana Sugar and Dhampur Sugar Mills edged higher on hopes that the government may soon remove some curbs on the tightly control sector. Additionally, PSU OMCs recouped all their initial losses, ended in the green even after cutting petrol prices by a rupee from April 02, given that global prices of the fuel have declined and rupee marginally strengthening against the dollar.

The NSE’s 50-share broadly followed index Nifty gained by above forty points to end comfortably above its psychological 5,700 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex rose by one hundred and seventy five points to finish over its psychological 19,000 mark. Meanwhile, the broader markets outperformed benchmarks and ended the session with a gain of over 1-2 percent.

The market breadth remained in favor of advances as there were 1,952 shares on the gaining side against 827 shares on the losing side while 117 shares remain unchanged.

Finally, the BSE Sensex gained 176.20 points or 0.93% to settle at 19,040.95, while the CNX Nifty rose by 43.70 points or 0.77% to end at 5,748.10.

The BSE Sensex touched a high and a low of 19,060.51 and 18,826.53, respectively. The BSE Mid cap index was up by 1.43%, while the Small cap index up by 2.28%.

The top gainers on the Sensex were, Sun Pharma up by 4.61%, Wipro up 4.28%, Sterlite Industries up 3.79%, ONGC up 2.76% and Jindal Steel up 2.53%, while Bajaj Auto down by 1.53%, HDFC down by 0.74%, Tata Power down by 0.47%, ICICI Bank down 0.41% and Bharti Airtel down by 0.41% were the top losers on the index.

The top gainers on the BSE sectoral front were, Metal up 2.07%, Oil & Gas up 1.99%, Capital Goods up 1.88%, Health Care up 1.82% and PSU up 1.73%, while there was no loser on the BSE sectoral space.

Meanwhile, in a move to attract more foreign inflows to fund the widening current account deficit (CAD), the Reserve Bank of India (RBI) rationalized FII investment in bonds, including government securities (G-Secs) by doing away with various categories. The central bank in a notification said ‘to simplify the existing limits, it has now been decided to merge the existing debt limits into two broad categories.’

Among the two broad categories, the first category will consist of G-Secs of $25 billion which merges $10 billion for investment limit in short-term government papers, including treasury Bills, and $15 billion for long-term government papers. While, the second category consists of the corporate debt with a limit of $51 billion, including a sub-limit of $25 billion each for bonds of infrastructure sector and non-infrastructure sector, and $1 billion for Qualified Foreign Investors (QFIs) in non-infrastructure sector. The above changes will come into effect from April 1, 2013.

Meanwhile, the eligible investors for these two categories are FIIs, QFIs and long terms investors registered with SEBI-Sovereign Wealth Funds (SWFs), pension and insurance, multilateral agencies and central banks of other countries. For the G-Secs category, eligible investors may invest in treasury bills only up to $5.5 billion within the limit of $25 billion. In the other category, investors may invest in commercial papers only up to $3.5 billion within the limit of $51 billion. The Non-Resident Indians are not subject to any limit for investment in government securities as well as corporate debt and will continue to be regulated as per existing guidelines.

As per Finance Minister P Chidambaram, CAD can be financed only through foreign inflows. Hit by high gold and petrol imports and slowdown in exports, current account deficit widened to a record high of 6.7% in October-December period of 2012-13.

The CNX Nifty touched a high and a low of 5,754.60 and 5,687.15 respectively. 

The top gainers on the Nifty were, Sun Pharma up by 4.97%, Reliance Infra up 4.77%, Sesa Goa up 4.26%, IDFC up 3.51% and Cairn up by 3.11%.

On the flip side, the top losers of the index were, Asian Paints down by 1.39%, Baja Auto down by 1.36%, HDFC down by 1.11%, Axis Bank down by 0.98% and Bharti Airtel down by 0.73%.

The European markets were trading in green, France’s CAC 40 up by 1.13%, Germany’s DAX up by 1.23% and the United Kingdom’s FTSE 100 up by 1.05%.

Asian markets ended mixed on Tuesday, as Japanese shares went home with huge losses as yen strengthened against the dollar. Investors remained cautious after a weaker-than-expected US manufacturing data sparked concerns over economic recovery. Chinese market closed flat in negative territory as China’s largest lender Industrial and Commercial Bank of China saw shares loss of 2.2%, while in Hong Kong, the Hang Seng swung between modest gains and losses in choppy trade, as investors returned to the market after two days of closure for the Easter holiday.