Re-energized bulls take benchmarks to one-month highs; Sensex re-conquers 18,700 levels

Boisterous benchmarks showcased an enthusiastic performance on Tuesday by rallying over two percentage points and broke lots of psychological levels in their northbound journey. There appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength as investors continued to hunt for fundamentally strong but oversold stocks. Frontline indices managed to finish the session near its day’s high by settling above 5,650 (Nifty) and 18,700 (Sensex) bastions as investors took to hefty across the board buying. Sentiments got bolstered on hopes for an interest rate cut in RBI’s policy review meet in May after Planning Commission Deputy Chairman Montek Singh Ahluwalia exuded confidence that the price situation would improve further in the coming months.

Investors also took cues from the steep slump in gold and crude oil prices, which if continued, would help to ease concerns of high current account and fiscal deficit, a factor which has been cited by the central bank as a key variable in its monetary policy making. Meanwhile, encouraging statements of country achieving the fiscal deficit target of 3% in 2016-17, by Finance Minister P Chidambaram, for overturning fears of foreign investors about fiscal deficit, also provided the required fillip to the local equity markets.

On the global front, European counters traded sluggish in the early trade, retreating for the third consecutive session, mirroring a sharp sell-off in US stocks and commodity prices as mounting worries over the pace of global growth rattle investors. However, Asian markets snapped the session mostly in the green paring their initial losses as investors went for fundamentally strong beaten down stocks, while sentiments remained cautious by a double bombing that hit the Boston Marathon.

Back home, strength in the domestic markets largely came from buying in rate sensitive 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 slipped to the lowest level in almost four months amid signs global economic growth may slow, curbing fuel demand while, buying in infra sector too boosted the sentiments after Finance Minister P Chidambaram said that the government will set up independent regulators for coal and road sectors in four months. Additionally, stocks related to power sector were trading jubilantly after the Central Electricity Regulatory Commission (CERC), the electricity regulator directed five state governments to compensate Tata Power for the losses it incurred from importing coal for its 4,000 mw Mundra ultra mega power project (UMPP).

The NSE’s 50-share broadly followed index Nifty gained by one hundred and twenty points to regain its psychological 5,650 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex rose by around three hundred and ninety points to finish above its psychological 18,700 mark. The broader markets also traded in-line with benchmarks and ended the session with a gain of about a percent. 

The overall volumes stood at over Rs 2.16 lakh crore, which remained on the higher side as compared to that on Monday. The market breadth remained in favor of advances as there were 1,336 shares on the gaining side against 1,023 shares on the losing side while 150 shares remain unchanged.

Finally, the BSE Sensex surged 387.13 points or 2.11% to settle at 18,744.93, while the CNX Nifty climbed by 120.55 points or 2.16% to end at 5,688.95.

The BSE Sensex touched a high and a low of 18,771.33 and 18,325.73, respectively. The BSE Mid cap index up by 0.86% and Small cap index was up by 0.43%.

The top gainers on the Sensex were, Maruti Suzuki up by 4.23%, Mahindra & Mahindra up by 3.95%, ONGC up by 3.87%, HDFC up by 3.84% and Dr Reddy’s up by 3.56%, while Infosys down by 1.71% and Sterlite Industries down by 1.28% were the top losers on the index.

The top gainers on the BSE Sectoral space were Bankex up 2.94%, Auto up 2.54%, Capital Goods up 2.53%, Power up 2.42% and Realty up 2.29%, while IT down 0.50% and TECk down 0.09% were the top losers on the sectoral space.

Meanwhile, India’s services exports increased by 9.5 per cent to $12.28 billion in February from $11.22 billion recorded in the same month of previous year. However, the export was down from a month ago at $13.89 billion in January 2013. During April-February period of FY13, the cumulative services exports declined by 2.5 percent to $121.18 billion from 124.25 billion in the same period of corresponding fiscal. 

Director General and CEO of Federation of Indian Export Organisations (FIEO) Ajay Sahai said the services exports are not on expected lines. We require double digit growth in services exports. The federation is expecting better exports data and sees $160 billion services receipt in the FY13. 

On the other hand, import of services in February 2013 stood at $6.35 billion versus $6.75 billion a year earlier. In January 2013, the services import stood at $7.52 billion. During the first 11 months period of FY13, services imports were valued at $73.68 billion.

The services sector contributes around 57 per cent to the country’s gross domestic product. Service sector includes key service exporter industries like Health Care, Tourism, Education, Engineering and Information Technology among others. Indian service sector has been growing at an average annual growth rate of about 28% during the last 5 years, making it the country’s growing consultancy sector which is offering its accumulated experience and expertise at home and abroad.   

The CNX Nifty touched a high and a low of 5,699.25 and 5,555.85 respectively. 

The top gainers on the Nifty were IDFC up by 5.39%, Axis Bank up 4.87%, IndusInd Bank up 4.40%, Maruti Suzuki up 4.36% and M&M up by 3.94%.

On the flip side, the top losers of the index were, Infosys down by 1.97%, Cairn down by 0.33%, HCL Tech down by 0.33% and Lupin down by 0.02%.

Most of the European markets were trading in red, France’s CAC 40 down by 0.69%, the United Kingdom’s FTSE 100 down by 0.56% and Germany’s DAX down by 0.54%.

Snapping earlier losses, Asian stock markets ended mostly higher on Tuesday but investors were still worried about China’s slowing economy, while miners and gold producers underperformed amid sharp declines in commodity prices. Stocks in China went home with green mark, digesting Monday’s weak economic data. Shares in Seoul closed higher as investors sentiments were boosted with an additional government spending. However, Japanese shares ended lower as the yen appreciated but pared those losses as the local currency came off a bit.