Benchmarks start the new F&O series on a positive note

First day of new F&O series turned out to be steady session of trade for Indian equity markets, which gradually gaining ground concluded not only near day’s high point, but also at five-week highs. Frontline gauges, extending their gains for fifth straight session, recaptured their crucial 21,100 (Sensex) and 6,250 (Nifty) ahead of GDP figures for the December 2013 quarter slated to be released later in the day. The consensus estimates of GDP growth for the December quarter is around 4.7 per cent. Some support also came on report that foreign institutional investors (FIIs) bought shares worth net Rs 511.15 crore on February 26, 2014, as per provisional data from the stock exchanges.

Supportive cues from US markets too provided support to local markets initially and dovish remarks from Federal Reserve Chairwoman Janet Yellen before the Senate Banking Committee too boosted the sentiments. European shares too edged higher in early deals, underpinned by expectations that a further drop in euro zone inflation could prompt the European Central Bank to cut rates. Positive closing in Asian markets too supported the sentiments across globe.

Back home, markets extended their northward journey in late trade as rate sensitive counters like Banking, Realty and Auto all edged higher as the Reserve Bank of India (RBI) governor Raghuram Rajan has hinted that rates are likely to remain unchanged in the forthcoming monetary policy in April 2014. Some support also came after Fertilizer stocks rallied after Cabinet Committee on Economic Affairs cleared the hike in fixed cost of urea by up to Rs 350 per tonne, a move that would lead to increase in subsidy by about Rs 900 crore. It also approved changes to the policy that aims at encouraging new investment in the urea sector by removing ‘guaranteed buyback’ clause and including a provision of bank guarantee of Rs 300 crore from companies.

The up-move was also supported by rally in technology and software counters as rupee depreciated on month-end dollar demand. Additionally, shares related to Pharma space too remained on investors’ radar fuelled by better-than-expected financial results for the quarter ended December 2013, driven by higher revenue growth and margins in key markets.

The NSE’s 50-share broadly followed index Nifty rose by around forty points and ended over the psychological 6,250 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by over one hundred and thirty points to finish above the psychological 21,100 mark. Broader markets too were traded with traction and ended the session with a gain of around half a percent. The market breadth was evenly divided, as there were 1,332 shares on the gaining side against 1,334 shares on the losing side while 167 shares remain unchanged.

Finally, the BSE Sensex surged by 133.13 points or 0.63%, to settle at 21120.12, while the CNX Nifty gained 38.15 points or 0.61% to settle at 6,276.95.

The BSE Sensex touched a high and a low of 21140.51 and 20989.66, respectively. The BSE Mid cap index was up by 0.49%, while the Small cap index gained 0.14%.

The top gainers on the Sensex were Hindalco Inds up by 6.86%, Tata Motors up by 4.15%, TCS up by 4.14%, BHEL up by 3.18% and ONGC up by 2.68%, while Maruti Suzuki down by 4.54%, NTPC down by 2.51%, Tata Steel down by 1.49%, RIL down by 1.39% and HDFC Bank down by 1.32% were the top losers in the index.

On the BSE Sectoral front, Healthcare up by 2.27%, IT up by 1.44%, Auto up by 1.37%, Teck up by 1.33% and Capital Goods up by 1.18 % were the top gainers, while Consumer Durables down by 0.67 %, FMCG down by 0.33% and Oil & Gas down by 0.02 % were the only losers in the space.

Meanwhile, possibly, in a move to gauge the role that shareholder promoters play in influencing the day-to-day functioning of the lenders, an expert committee appointed by the Reserve Bank of India (RBI) has sought minutes of board meetings from banks.

The 8-member panel set up by RBI and chaired by former Axis Bank Chairman P J Nayak to review governance of board of banks could also recommend that shareholder promoters give up their executive positions at banks. The committee is set to review who should be appointed on the board, what they should discuss and the process to be followed for discussions.

Besides, the panel has been empowered to review the regulatory compliance requirements of banks’ boards in India, and estimate that what could be intellectual and where requirements needed to be raised. It’s also supposed to analyze representation on bank boards to see whether the boards have appropriate mix of capabilities and necessary independence to govern the institution. Additionally, the panel is expected to examine the working of bank boards, including whether adequate time is devoted to issues of strategy, growth, governance and risk management.

Seperately, in a move that could spark a storm in bank boardrooms, RBI has asked the committee set to examine the recommendations of the Financial Sector Legislative Reforms Commission (FSLRC) relating to capacity building in the banking sector under the Chairmanship of Executive Director of RBI G. Gopalakrishna, to consider whether there ought to be a certification process for the appointment of bank directors.

The CNX Nifty touched a high and low of 6,282.70 and 6,228.10 respectively.

The top gainers of the Nifty were Hindalco Industries up by 7.62%, TCS up by 4.11%, Lupin up by 3.94%, BHEL up by 3.76% and Tata Motors up by 3.74%. On the other hand, Maruti Suzuki India down by 4.33%, NTPC down by 2.86%, Reliance Industries down by 1.65%, Tata Steel down by 1.52% and HDFC Bank down by 1.24% were the top losers.

Most of the European markets were trading in red, France's CAC 40 was down by 0.33% and United Kingdom's FTSE 100 was down by 0.12%, while Germany's DAX was up by 0.05%.

The Asian markets barring Nikkei 225 concluded Friday’s trade in green, with Japan's Nikkei share average dropping for a third day as investors remained cautious amid tensions in Ukraine, while a stronger yen weighed on risk appetite and dragged down exporters. Taiwan Stock Exchange was closed for trade today on account of ‘Peace Memorial Day’ holiday. Indonesia’s rupiah was set for its best month in almost five years after a narrower shortfall in the widest measure of trade prompted overseas investors to increase purchases of the nation’s assets. Thailand’s Industrial Production fell to a seasonally adjusted -6.4%, from -6.1% in the preceding month while the country’s Trade Balance fell to a seasonally adjusted -0.75B, from 2.00B in the preceding month.

Japan’s first round of its monthly Festival of Data is out, and the big one is the January core consumer price index (CPI) which excludes volatile fresh food prices. Japan’s National Core CPI remained unchanged at a seasonally adjusted 1.3%, from 1.3% in the preceding month while the percentage of the total work force that is unemployed and actively seeking employment during the previous month remained unchanged at a seasonally adjusted 3.7%, from 3.7% in the preceding month. Japan’s industrial production rose to a seasonally adjusted 4.0%, from 0.9% in the preceding month while the retail sales rose to a seasonally adjusted annual rate of 4.4%, from 2.6% in the preceding month. Japanese Housing Starts fell to a seasonally adjusted 12.3%, from 18.0% in the preceding quarter. Japanese Household Spending rose to a seasonally adjusted 1.1%, from 0.7% in the preceding month.