Post Session: Quick review

After a session of consolidation, stock markets in India staged smart performance on April series futures and options contract expiry session on rate cut hopes in RBI’s May 3 policy meet amidst bullish regional risk sentiment. Going by the Finance Minister’s pledge of more economic reforms being in the offing, market-participants shopped for risky asset class such as equities, which drove the benchmarks higher with gains of around a percent and a half. 

The sudden spike, which was witnessed in the dying hours of trade took the benchmark 30 share index, Sensex and 50 Share index, Nifty, above their psychological 19400 and 5900 levels respectively. However, broader indices underperforming the frontline equity indices went with lesser proportion of gains, while Midcap index added over half a percent, the Smallcap index ended the session with gains of 0.10% only.

For the series, while Nifty rallied over 4%, Sensex was up by 3%, in broader space, CNX Midcap index added gains over massive 5%, with BSE Smallcap index crept higher by 4%. Surprisingly, trade of over Rs 4 lac crore was done in terms of volume turnover during the last trading session of April F&O series.

Besides, Finance Minister’s assurance of more economic reform programme in the remaining term of UPA-II, slew of good corporate earnings also underpinned investors’ sentiment. Shares of Axis Bank gained momentum in early trade after the third largest bank private sector bank announced that its fourth quarter net profit jumped 22% to Rs 1,555.15 crore against a net profit of Rs 1,277.27 crore in corresponding quarter last fiscal. Additionally, Strides Arcolab shares added close to quarter of a percent on turning black in Q1. The company has reported a net profit of Rs 31.57 crore for the quarter ended March 31, 2013 as compared to a net loss of Rs 28.16 crore for the same quarter in the previous year.

However, mixed global set-up failed to provide any cues. Asian shares staged a mixed close as investors awaited policy decision by the Bank of Japan, which will add huge stimulus measures to the economy views.  While, European shares after starting higher for their fifth straight session helped by M&A speculation and expectations of more central bank action to support the economy, were trading mixed at this point of time.

Closer home, in sector specific activity, Auto, Health Care and Oil & Gas witnessed huge investors’ participation, while Information Technology, Realty and Consumer Durables counters were the weak spells of the trade. IT stocks fell on weak economic data in the US, the biggest outsourcing market for the Indian IT firms. On the other hand, banking pivotal scooped up gain of over a percent on growing clamour for rate cut in RBI’s upcoming policy meet. The RBI is likely to cut interest rates next week for a third time this year, drawing comfort from a fall in inflation, as it seeks to lift the economy from its lowest growth in a decade. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1223: 1160, while 129 scrips remained unchanged. (Provisional)

The BSE Sensex gained 227.49 points or 1.19% to settle at 19406.85.The index touched a high and a low of 19434.85 and 19192.11 respectively. 23 stocks were up, while 7 stocks declined on the index. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.50% and 0.09% respectively. (Provisional)

On the BSE Sectoral front, Auto up by 2.79%, Health Care up by 2.04%, Oil & Gas up by 1.43%, Metal up by 1.42% and Bankex up by 1.42% were the top gainers, while IT down by 1.65%, Teck down by 0.84%, Realty down by 0.64% and Consumer Durables down by 0.48% were the only losers in the space. (Provisional)

The top gainers on the Sensex were  Dr Reddys Lab up by 4.72%, Gail India up by 4.25%, Tata Motors up by 4.21%, NTPC up by 4.06% and Maruti Suzuki up by 3.50%, while, Wipro down by 2.20%, TCS down by 1.92%, Infosys down by 1.55%, Hindustan Unilever down by 0.34% and ONGC down by 0.09% were the top losers in the index. (Provisional)

Meanwhile, in order to prevent the misuses of foreign investors’ funds, the Reserve Bank of India has proposed that inflow of foreign funds to the Indian entity should be allowed only through escrow mechanism. According to the RBI's proposal, Indian investee companies would be required to open an escrow account with bank rather than directly remitting to the account of investee company and funds shall be released by bank from this account in accordance with the terms of escrow arrangement.

The issue was recently discussed at a high-level meeting headed by the Department of Economic Affairs (DEA) secretary Arvind Mayaram, which was also attended by DIPP Secretary Saurabh Chandra, Chief Economic Advisor Raghuram Rajan and RBI officials. The central bank argued that that the misuse can be checked if usage of money is allowed only after issuance of shares. In the meeting the proposal was accepted and was said that the RBI may flesh out the proposal and forward it with a draft notification for consideration and approval.

The foreign direct investment (FDI) in India declined by 19 percent in February, 2013 to $ 1.79 billion from the $ 2.15 billion recorded in the same month of previous year, owing to the prevailing global economic slowdown. Foreign investment is considered crucial for economic development of a country and the decline in foreign investments could put pressure on the country’s balance of payments and may also impact the value of the rupee.

India VIX, a gauge for markets short term expectation of volatility lost 5.77% at 14.20 from its previous close of 15.07 on Tuesday. (Provisional)

The CNX Nifty gained 81.70 points or 1.40% to settle at 5,918.60. The index touched high and low of 5,924.60 and 5,853.30 respectively. 37 stocks advanced against 13 declining and one stock remains unchanged on the index. (Provisional)

The top gainers on the Nifty were HDFC up by 5.64%, NTPC up by 4.29%, Dr. Reddy's Laboratories up by 4.23%, Tata Motors up by 3.91% and Hero MotoCorp was up by 3.90%. On the other hand, HCL Tech down by 2.29%, TCS down by 2.07%, DLF down by 1.98%, JP Associate down by 1.72% and Infosys down by 1.29% were the top losers. (Provisional)

Most of the European markets were trading in red with,  the United Kingdom’s FTSE 100 down by 0.11% and France’s CAC 40 down by 0.31% while Germany’s DAX up by 0.12%.

Asian markets ended mixed on Thursday in quiet trade following an anemic close on Wall Street overnight. Investors were waiting for policy decision by the Bank of Japan, which may add huge stimulus measures to the economy. Japan’s Nikkei went home with gain of over half a percent, continuing to rally on the back of a soft yen. Meanwhile, South Korean shares closed higher as metals and chemicals rebounded on higher gold and oil prices. However, Shanghai Composite ended lower, despite of positive quarterly earnings from China Minsheng Bank, the country’s seventh-largest lender.