Benchmarks snap April F&O series in style; Nifty surpasses 5,900 mark

The April series Futures and Options contract settlement turned out to be an encouraging event for the Indian markets as bulls showed strong buying fervor blue chip stocks. Hefty short covering in the dying hours ahead of the series expiry further stoked the benchmarks to settle around the high point of the day. The resilient markets vivaciously rallied over 571.08 (Sensex) and 233.75 (Nifty) points during the series, conquering 19,400 (Sensex) and 5,900 (Nifty) bastions. Sentiments remained jubilant from the start of the trade as sentiments got boost from Finance minister P Chidambaram’s statement to reach out to the main opposition BJP and other political parties seeking their support to get crucial legislations approved in the ongoing budget session. He has said that the government is keen to get the insurance, food security and land acquisition legislations approved by Parliament to sustain the reform momentum.

Sentiments also remained upbeat as investors expect that the Reserve Bank of India will cut interest rates by 25-50 basis points on May 3, 2013 in its monetary policy meet as WPI inflation eased to 3-year low in March. Markets also remained in comfort zone after the Finance Ministry has pitched for rating upgrade with Standard & Poor’s. At present, India has a sovereign rating of ‘BBB-’ which is the last investment grade. Last August, the rating agency revised the outlook on India’s long-term credit rating to ‘negative’ from ‘stable’.

On the global front, European markets remained mixed in the opening minutes of trade ahead of the UK’s release of its first-quarter gross domestic product growth data that will confirm whether the country has entered a triple-dip recession or not. Asian counters too ended mixed as investors remained sidelines ahead of the Bank of Japan’s policy board meeting on April 26, 2013. Though, South Korean KOSPI edged higher after country’s economy grew the most in two years in the first quarter, as the government front-loaded spending and exporters weathered the slide in the yen that aids rivals in Japan.

In the meantime, sentiments in the domestic markets remained euphoric after Prime Minister’s Economic Advisory panel Chairman C Rangarajan said that India has ability to grow at 8 percent without fuelling inflation. He said ‘with an investment rate in the range of 32-35 percent, there is a potential growth rate of 8 percent in the economy and it is possible to grow at that rate even without provoking high level of inflation’.  Sentiments also got some boost from rally in Aviation pack. Stocks like Jet Airways, Spicejet, and Kingfisher Airlines edged higher on report that India has agreed to enhance seat entitlements to and from Abu Dhabi multiple times despite political opposition. Bucking the trend, software and technology stocks remained the top loser as stocks like, Infosys, Wipro, TCS and HCL Technologies edged lower on weak economic data in the US, the biggest outsourcing market for the Indian IT firms.

The NSE’s 50-share broadly followed index Nifty gained by about eighty points to surpass its psychological 5,900 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex rose by about two hundred and thirty points to finish over its psychological 19,400 mark. The broader markets too traded with traction and ended the session in the green on Thursday.

The overall volumes stood at over Rs 4.19 lakh crore, which remained on the higher side as compared to that on Tuesday. The market breadth remained in favour of advances as there were 1,221 shares on the gaining side against 1,158 shares on the losing side, while 133 shares remained unchanged.

Finally, the BSE Sensex surged 227.49 points or 1.19% to settle at 19406.85, while the CNX Nifty climbed by 79.40 points or 1.36% to end at 5,916.30.

The BSE Sensex touched a high and a low of 19434.85 and 19192.11, respectively. The BSE Mid cap index up by 0.50% and Small cap index was up by 0.09%.

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 1.92%, Infosys down 1.55%, Hindustan Unilever down 0.34% and ONGC down by 0.09% were the top losers on the index.

The top gainers on the BSE Sectoral space were Auto up 2.79%, Health Care up 2.04%, Oil & Gas up 1.43%, Metal up 1.42% and Bankex up 1.37%, while IT down 1.65%, TECk down 0.84%, Realty down 0.64% and Consumer Durables down 0.48% were the top losers on the sectoral space.

Meanwhile, dismissing the apprehension of rise in fiscal deficit, Finance Minister P Chidambaram has said that India’s fiscal deficit will be kept below 4.8 percent of gross domestic product (GDP) in FY14. Finance Minister said that fiscal deficit target is a red line that would never be breached and stated that in current situation, the current account deficit (CAD) situation is more worrying than fiscal deficit. Though, he expressed his optimism that CAD will be below 5 percent in 2012-13 and the fiscal deficit for FY13 will be around 5 percent of GDP.

Chidambaram emphasized that the government is on the fiscal consolidation path and has taken number of measures, which are focused on compressing expenditure and making extra efforts to improve revenue collection. The government has aimed to bring the fiscal deficit at the level of 3 percent by 2016-17. To contain the widening CAD, finance minister said that it may be difficult to dramatically increase exports due to the prevailing global economic slowdown and India may have to look at ways to restrain imports. The current account deficit (CAD) reached an all-time high of 6.7 percent of GDP in the third quarter of FY13. He also dispelled the concern of India’s deficit being mainly financed by short-term volatile foreign institutional investor inflows, as foreign institutional investments in India have always seen a growth except for one year after the global financial crisis.

The CNX Nifty touched a high and a low of 5,924.60 and 5,853.30 respectively. 

The top gainers on the Nifty were HDFC up by 5.64%, NTPC up 4.29%, Dr Reddy up 4.23%, Tata Motors up 3.91% and Hero MotoCorp up by 3.90%.

On the flip side, the top losers of the index were, HCL Tech down by 2.29%, TCS down by 2.07%, DLF down by 1.98%, JP Associates down 1.72% and Infosys down by 1.29%.

Most of the European markets were trading mixed, France’s CAC 40 down by 0.01%, the United Kingdom’s FTSE 100 down by 0.13% and Germany’s DAX up by 0.21%.

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.