Post Session: Quick Review

After getting a weak start, benchmark equity indices gathered traction to end the session with gains of close to half a percent. Renewed buying activity on the back of 40 month low inflation data, which strengthened the case for rate cut in RBI’s May 3 Policy Review, mainly bolstered the sentiment at D-street, besides driving the banking shares higher. On the macro front, wholesale prices, India's key inflation measure, slowed to 5.96 percent in March, the lowest rate since November 2011 after an annual uptick to 6.84 percent in February

Further, investors sentiment were also underpinned by the reports, which suggested Gold Imports that contributes significantly to ballooning Current Account Deficit (CAD), falling nearly 24% in the first quarter and probably dropping at the same pace in April.

However, sticky global cues limited the upside of the bourses, benchmark 30 share index, Sensex and widely followed index Nifty, adding gains of around half a percent, ended above the psychological 18300 and 5550 levels respectively. Meanwhile, broader indices failed to gain that much traction as frontline indices, with Midcap index ending a slightly above its neutral line.

On the global front, Markets across China slumped on Monday after country’s growth unexpectedly slowed in the first quarter, adding to concerns that Asia's biggest economy may be losing steam after an earlier recovery in the year. Meanwhile, European shares extended loss after a weak start, led by the fall of Mining stocks which dropped on weaker-than-expected Chinese data.

Closer home, sectorally Oil & Gas, Fast Moving Consumer Goods (FMCG), PSU and Banking counters acted as the pocket of strength for bourses, while stocks from Consumer Durables, Metal and Auto counters were the weak spells of the trade. PSU oil marketing companies (OMCs) such as HPCL, BPCL, etc rallied on hopes a slump in crude prices would lower the cost of under-recoveries. While, banking shares gained steam on rate cut hopes after inflation unexpectedly eased to a multiyear lows. On the flip side, Consumer Durable counter was clobbered out of shape and ended with a cut of close to two and half a percent. Additionally, Gold loan finance companies, namely Muthoot Finance and Manappuram Finance, slumped after a crash in prices of the yellow metal, which will potentially reduce the value of the collateral held by these companies. Gold prices fell 5 percent on Friday, the biggest drop since December 2008.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1258: 1046 while 127 scrips remained unchanged. (Provisional)

The BSE Sensex gained 115.24 points or 0.63% to settle at 18357.80.The index touched a high and a low of 18424.40 and 18144.22 respectively. 14 stocks were up, while 16 stocks declined on the index. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.15% and 0.43% respectively. (Provisional)

On the BSE Sectoral front, Oil & Gas up by 2.36%, FMCG up by 1.45%, PSU up by 1.38%, Bankex up by 0.96% and Capital Goods up by 0.57% were the top gainers, while Consumer Durables down by 2.06%, Metal down by 1.21%, Auto down by 0.98%, Health Care down by 0.77% and Power down by 0.55% were the top losers in the space. (Provisional)

The top gainers on the Sensex were ONGC up by 3.45%, SBI up by 3.01%,  Bharti Airtel up by 2.38%,  RIL up by 2.35% and ITC up by 2.34%, while, Sterlite Industries down by 2.60%, Dr Reddys Lab down by 2.52%, TCS down by 2.38%, Tata Motors down by 2.25% and Coal India down by 1.83% were the top losers in the index. (Provisional)

Meanwhile, in a big relief, the annual rate of inflation, based on monthly WPI, eased to a 40-month low at 5.96% (Provisional) for the month of March, 2013 (over March, 2012) as compared to 6.84% (Provisional) for the previous month and 7.69% during the corresponding month of the previous year. Build up inflation in the financial year so far, too has increased and stood at 5.96% compared to a buildup of 7.69% in the corresponding period of the previous year. However, the January inflation figures have been revised upward to 7.31% from 6.62%.

However, manufactured products, which carry weight of 64.97% in the index, rose by 0.1% to 148.4 (Provisional) from 148.2 (Provisional) for the previous month. The index for 'Food Products' group declined by 0.5% to 164.9 (Provisional) from 165.7 (Provisional) for the previous month. The index of Fuel & Power, which has weight of 14.91%, rose by 3.0% to 195.2 (Provisional) from 189.5 (Provisional) for the previous month due to higher prices of zinc concentrate, iron ore, crude petroleum and copper ore.

The index of Primary Articles, having weight of 20.12% too rose by 0.4% to 223.6 (Provisional) from 222.7 (Provisional) for the previous month. The index for 'Non-Food Articles' group rose by 0.6% to 206.9 (Provisional) from 205.60 (Provisional) for the previous month, while the index for 'Minerals' group rose by 2.1% to 357.4 (Provisional) from 350.1 (Provisional) for the previous month.

There was a wide expectation that the inflation might have edged higher in March, given the index snapped the four month’s decelerating trend in the previous month. But the surprise slowdown in numbers has further strengthened the case for rate cut in RBI’s May 3 Policy Review as these figures now fall within the RBI’s comfort level. Reiterating that India's inflation still remains high, RBI governor Duvvuri Subbarao said that the inflation numbers should come down to a 4-6% range, in order to facilitate monetary easing.

Meanwhile, the consistent fall in core inflation, or inflation that excludes volatile food and fuel prices, too provides the central bank with some room to cut policy rates by 25 basis points in its Policy review in May. The Reserve Bank of India (RBI), has so far responded to a slight easing in headline inflation in recent months with two 25 basis point cuts this year to bring the benchmark repo rate to 7.50%.

India VIX, a gauge for markets short term expectation of marginally gained 0.97% at 16.61 from its previous close of 16.45 on Friday. (Provisional)

The CNX Nifty gained 28.95 points or 0.52% to settle at 5,557.50. The index touched high and low of 5,592.85 and 5,500.30 respectively. 25 stocks advanced against 25 declining on the index. (Provisional)

The top gainers on the Nifty were BPCL up by 5.36%, Bank of Baroda up by 3.14%, ONGC up by 3.08%, PNB up by 2.87% and SBI was up by 2.80%. On the other hand, Sesa Goa down by 3.31%, Dr. Reddy's Laboratories down by 2.80%, TCS down by 2.56%, DLF down by 2.53% and Tata Motors down by 2.33% were the top losers. (Provisional)

All European markets were trading in red with, Germany’s DAX down by 1.12%, the United Kingdom’s FTSE 100 down by 1.27% and France’s CAC 40 down by 1.05%.