Better inflation data fortifies Indian equities

A day after taking a nasty laceration of over one and a half percent, Indian equity benchmarks snapped the Monday’s trade with a gain of over half percent with frontline indices re-conquering their crucial 5,550 (Nifty) and 18,350 (Sensex) levels as March inflation eased. Markets started the day’s trade in the negative terrain following weak global cues but, turned green on the back of 40-month low inflation data, which strengthened the case for rate cut in Reserve Bank of India’s (RBI’s) May 3 Policy Review. The wholesale price index, 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. Investors’ sentiment also got underpinned by the reports suggesting gold imports that contribute significantly to ballooning Current Account Deficit (CAD), falling nearly 24% in the first quarter and probably dropping at the same pace in April.

Meanwhile, traders’ shrugged off feeble global cues as European counters opened in the red, led lower by mining stocks after weaker-than-expected economic data from China - the world’s top metals consumer - raised doubts over the pace of the global economic recovery. Asian equities too shut shop in the negative terrain as weaker-than-expected US and Chinese data raised concerns about the global economic outlook. Chinese economic recovery unexpectedly staggered in Q4 FY13 as the annual rate of growth eased back to 7.7 percent from the 7.9 percent pace set in the fourth quarter of previous year.

Back home, banking space rallied as slowing wholesale price inflation raised rate cut expectations. Some strength also came in from buying in public sector oil marketing companies (OMCs) viz. IOC, BPCL and HPCL after US crude oil futures dropped below $90 a barrel mark for the first time in more than a month as economic growth unexpectedly eased in China, the world’s second-largest crude oil user. PSU counter too witnessed traction and garnered a gain of about one and a half percent on report that Indian PSUs are expected to witness a turnover of more than $1 trillion by 2020 and a large part of the growth will be attributed to investments in modern forms of IT including cloud, big data and mobility.

Additionally, stocks from Aviation sector remained on the buyers’ radar after the Aviation Minister Ajit Singh said that the country is going to be the second largest air traffic market in the world. However, gains remain capped up to certain extent as selling was witnessed in software and technology counters. Stocks like, Infosys, TCS, Tech Mahindra, Satyam Computers and Financial Technologies traded under pressure with new immigration rule being pushed by senators in the US.

The NSE’s 50-share broadly followed index Nifty surged by about forty points to end above the psychological 5,550 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex soared by about one hundred and twenty points to end above its crucial 18,350 mark. Moreover, broader markets too traded with traction throughout the day and ended in green terrain.

The market breadth remained in favor of advances as there were 1,266 shares on the gaining side against 1,042 shares on the losing side while 123 shares remain unchanged.

Finally, the BSE Sensex gained 115.24 points or 0.63% to settle at 18357.80, while the CNX Nifty rose by 39.85 points or 0.72% to end at 5,568.40.

The BSE Sensex touched a high and a low of 18424.40 and 18144.22, respectively. The BSE Mid cap index up by 0.15% and Small cap index was up by 0.43%.

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 2.25% and Coal India down by 1.83% were the top losers on the index.

The top gainers on the BSE Sectoral space were Oil & Gas up 2.37%, FMCG up 1.45%, PSU up 1.38%, Bankex up 0.96% and Capital Goods up 0.57%, while Consumer Durables down 2.06%, Metal down 1.21%, Auto down 0.98%, Health Care down 0.77% and Power down 0.55% were the top losers on the sectoral space.

Meanwhile, the government is planning to open All-Women Post Offices in rural areas - the first of their kind in the world as they would be completely operated and managed by women employees. This initiative is part of the government's objective to create opportunities for women in the country.

Telecom and IT Minister Kapil Sibal said, the Department of Post (DoP) has decided for women orientated branches where women will do jobs. The government will start the programme with urban centres and then slowly move to other areas. DoP has planned to set up at least three to four All-Women post offices in all the metros and a minimum of one such PO in Tier-II cities. These post offices will be opened up within next six months.

The DoP expects that by setting up All Women Post Offices, there will an increase in footfall of women customers at post offices and it will be able to promote thrift, especially among working women. There are 154,822 post offices in the country. Of these, 1,39,086 are in rural areas and 15,736 are in urban regions. 

The CNX Nifty touched a high and a low of 5,592.85 and 5,500.30 respectively. 

The top gainers on the Nifty were BPCL up by 5.36%, Bank of Baroda up 3.14%, ONGC up 3.08%, PNB up 2.87% and SBI up by 2.80%.

On the flip side, the top losers of the index were, Sesa Goa down by 3.31%, Dr Reddy down by 2.80%, TCS down by 2.56%, DLF down by 2.53% and Tatat Motors down by 2.33%.

Most of the European markets were trading in red, France’s CAC 40 down by 1.05%, the United Kingdom’s FTSE 100 down by 1.13% and Germany’s DAX down by 0.88%.

Asian markets closed the shutter on a weak note as China's economic recovery unexpectedly faltered in the first three months of 2013 as the annual rate of growth eased back to 7.7% from the 7.9% pace set in the final quarter of last year. Japan’s Nikkei went home with red mark, pressurized by yen’s strength against greenback. Meanwhile, investors were still worried about the Korean peninsula, where military tensions are high.