Post Session: Quick Review

In catch up with global peers, Indian equity markets too put a spectacular show with benchmarks surging to three months high on relentless run of bulls, which were buoyed by the higher capital inflows by foreign funds. Aided by across the board buying, benchmark 30 share index, added massive 200 points, to conclude past psychological 19850 level, while Nifty, puffing up close to 70 points, ended just shy of 6050 level, its highest since February 4, 2013.

World shares hit their highest level in almost five years on Tuesday as last week's strong US jobs report continued to fuel optimism about the health of the global economy. Japanese stocks jumped in a delayed reaction to the data because Tokyo markets remained closed for a public holiday on Monday. However, Taiwan and South Korean stock markets failed to negotiate a positive close. South Korean shares gave up early gains to end lower on Tuesday, with automakers leading the drop. Caution ahead of Thursday's policy decision by the Bank of Korea and a weaker yen mainly added to the bearish market tone. Nevertheless, European shares continue to trade with optimism bolstered by a crop of better-than-expected corporate earnings.

Closer home, rally at D-street was led by rate sensitive counters, Banking, Realty and Auto, enticed investors maximum attention. Meanwhile, Fast Moving Consumer Goods counter was the star performer of the session, with the index pivotal rising close to 2% to pip other sectoral indices on BSE. Additionally, the surge of index heavyweights, such as ITC and Reliance Industries, also supported to the already energized bulls. Furthermore, batch of positive earnings too added to the upside of the bourses.  Glaxosmithkline Pharmaceuticals’ stocks surged by 3% on reporting 37.53% rise in its net profit for the quarter ended March 31, 2013 at Rs 169.01, while Tyre maker, CEAT stocks surged over 4% on reporting 47.14% rise in its net profit at Rs 60.90 crore in Q4FY13. However, Allahabad Bank’s Q4FY13 turned out to be a miss and the stocks plummeted over 4% after the company’s Q4FY13 net declined by 68.48% at Rs 126.15 crore. On the flip side, export related stocks failed to gain traction after technical committee set up by the Reserve Bank of India recommended a cap on interest margins charged by banks lending to exporters. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1353: 1064, while 134 scrips remained unchanged. (Provisional)

The BSE Sensex gained 215.31 points or 1.09% to settle at 19,888.95.The index touched a high and a low of 19,917.88 and 19,697.33 respectively. Among the 30-share Sensex pack, 25 stocks gained while rest of them declined (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.84% and 0.60% respectively. (Provisional)

On the BSE Sectoral front, FMCG up by 2.00%, Bankex up by 1.80%, Realty up by 1.40%, Auto up by 1.12% and Capital Goods up by 0.90% were the top gainers, while there were the no losers in the space. (Provisional)

The top gainers on the Sensex were Hero MotoCorp up by 3.62%, Bharti Airtel up by 3.08%, ITC up by 2.67%, Tata Motors up by 2.54% and Jindal Steel up by 1.96%, while, Coal India down by 1.65%, Wipro down by 1.48%, HDFC down by 0.63%, Mahindra & Mahindra down by 0.51% and Tata Power down by 0.11% were the top losers in the index. (Provisional)

Meanwhile, in order to boost exports and bridge the widening current account deficit, the Reserve Bank of India (RBI) has suggested a slew of measures such as introduction of differential tax regime and increasing the scope of interest subsidy scheme for exporters. The central bank said ‘the global trade environment may not improve in the immediate period. Therefore, there is an urgent need to boost India’s exports so that the trade deficit is narrowed down, and CAD stays within the projected cap’.

The CAD, which is the difference between the inflow and outflow of foreign currency, had touched a record high of 6.7 per cent in the third quarter of FY13. Moreover, exports declined by 1.76 per cent to $300.6 billion in 2012-13 fiscal and the trade deficit touched an all time high of $190.91 billion for the same period.

The central bank had constituted a technical committee on services/facilities for the exporters headed by RBI Executive Director G Padmanabhan to suggest ways for improving financial support from alternative sources. In line with its objective, the committee has made recommendations relating to review of Gold Card Scheme for extension of export credit to exporters, appropriate inclusion of export finance under the priority sector lending and widening the scope of interest subvention.    

To make the tax structures more streamlined for exporters, the RBI committee said that like Singapore and Sri Lanka, which offer differential tax rates to promote exports, the government may consider offering this facility to Indian exporters. It also asked for early introduction of Goods and Services Tax (GST), since exporters incur numerous levies, such as VAT (value added tax), purchase tax, turnover tax, octroi, electricity duty, which make the Indian export pricing uncompetitive. 

Further, the committee also recommended continuation of export credit refinance policy for three years, which would provide certainty in availability of funds to the banks for managing their asset-liability positions and would also build confidence among the exporting community. It also proposes to set up a nodal agency for borrowing in foreign currency from abroad on a pool basis, and further lend to export orientated companies in India at competitive rates.

India VIX, a gauge for markets short term expectation of volatility gained 4.16% at 16.50 from its previous close of 15.84 on Monday. (Provisional)

The CNX Nifty gained 69.85 points or 1.17% to settle at 6,040.90. The index touched high and low of 6,050.50 and 5,982.95 respectively. 42 stocks advanced against 7 declining and one stock remains unchanged on the index. (Provisional)

The top gainers on the Nifty were Hero MotoCorp up by 3.69%, DLF up by 3.35%, Axis Bank up by 3.01%, Lupin up by 2.95% and IDFC was up by 2.83%. On the other hand, Coal India down by 1.96%, Ambuja Cements down by 0.62%, HDFC down by 0.57%, M&M down by 0.56% and Ranbaxy down by 0.55% were the top losers. (Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.34%, Germany’s DAX up by 0.68% and the United Kingdom’s FTSE 100 up by 0.32%.

Most Asian markets closed the shutter on positive note on Tuesday, with Japanese Nikkei 225 close to five-year peak after the Standard & Poor's 500 Index closed at a record high overnight on renewed hopes for a steady US recovery. However, South Korean shares gave up early gains and went home with red mark, with automakers leading the losers. In China, Shanghai market closed higher after moving in narrow range entire day, on news report stating government will tighten rules on capital inflows. Hong Kong market ended with positive mark after recouping losses in afternoon trade amidst broad regional gains. Meanwhile, investors were also hopeful for further rate cut by the European Central Bank.