Benchmarks resume northward journey as Ukraine fears recede

Boisterous benchmarks, resuming their northward journey after a day of pause, staged an enthusiastic performance on Tuesday, by rallying over a percentage point crossing lots of psychological levels in their northward rally. Sentiments remained positive since beginning of the trade and 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 hunt for fundamentally strong and oversold stocks. The rally came mainly after Russia’s President Vladimir Putin ordered his troops back to base, raising hopes of a peaceful solution to the recent geopolitical tensions in Ukraine.

Investors also remained optimistic on reports that the government is considering a proposal to allow companies to issue depository receipts like ADR and GDR against debt instruments, in a bid to deepen financial markets. Besides, the option of giving ADR and GDR holders voting right to make such securities more attractive to foreign investors, too is being considered. Some support also came on report that foreign institutional investors (FIIs) bought shares worth a net Rs 198.53 crore on March 3, 2014, as per provisional data from the stock exchanges.

Northward journey got extended after European markets made a gap up- opening with CAC, DAX and FTSE all trading higher by over a percentage point in early deals. Asian markets too ended higher as Ukraine fears recede, after Russia’s president ordered troops in military exercises in central and western Russia to return to base, raising hopes that a peaceful solution might be reached.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Frontline indices managed to settle at their one month high levels with Sensex surpassing its crucial 21,200 bastion, while Nifty ended near its crucial 6,300 mark. Recovery in Indian rupee too supported the sentiments. The rupee firmed up against the US dollar and was trading at 61.97 at the time of equity markets closing as compared to Monday’s close of 62.04, tracking gains in domestic equity markets.

Meanwhile, stocks related to construction and railways sector edged higher as the cabinet note on allowing foreign direct investment (FDI) in the railway and construction sectors has been cleared. The Department of Industrial Policy and Promotion had proposed relaxation of FDI norms in the construction sector and 100 percent FDI in the railway sector.

The NSE’s 50-share broadly followed index Nifty rose by around eighty points and ended near the psychological 6,300 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by over two hundred and sixty points to finish above the psychological 21,200 mark. Broader markets too were traded with traction and ended the session with a gain of over a percentage point. The market breadth was evenly divided, as there were 1,633 shares on the gaining side against 1,085 shares on the losing side while 136 shares remain unchanged.

Finally, the BSE Sensex surged by 263.08 points or 1.26%, to settle at 21209.73, while the CNX Nifty gained 76.50 points or 1.23% to settle at 6,297.95.

The BSE Sensex touched a high and a low of 21224.64 and 20940.39, respectively. The BSE Mid cap index was up by 1.31%, while the Small cap index gained 1.03%.

The top gainers on the Sensex were Hindalco Inds up by 7.82%, SSLT up by 4.88%, ICICI Bank up by 3.75%, Axis Bank up by 3.29% and Gail India up by 3.07%, while Sun Pharma down by 0.73% and Dr Reddys Lab down by 0.45% were the only losers in the index.

On the BSE Sectoral front, Metal up by 3.31%, Bankex up by 2.47%, PSU up by 2.02%, Capital Goods up by 2.00% and Consumer Durables up by 1.95% were the top gainers, while Healthcare down by 0.40% and IT down by 0.01% were the only losers in the space.

Meanwhile, a new customs form, namely, 'Indian Customs Declaration Form' including additional fields for declaration of prohibited and dutiable goods for passengers flying into India has come into effect from March 1, 2014, which is different from the detachable perforated strip that was earlier part of the immigration card.

Post this development, passengers coming to India will have to declare Indian currency exceeding Rs 10,000 being carried by them in the new 'Indian Customs Declaration Form'. Besides, travelers would have to declare any prohibited articles, gold jewellery (over free allowance) and gold bullion and will also have to give details of countries visited in the prior six days before arrival in India. Additionally, Indian citizen would now need to fill up an immigration form only when he or she goes out of the country.

While, some fields have been added, old fields like declaration of satellite phone, foreign currency exceeding $5,000 or equivalent, aggregate value of foreign exchange, including currency exceeding $10,000 or equivalent, meat, meat products, dairy products, fish or poultry products and seeds, plants, fruits, flowers and other such material have been retained.

Meanwhile, passengers of Indian origin and foreigners of over 10 years of age residing in India and coming from Nepal, Bhutan, Myanmar and China would be eligible for a duty-free allowance of Rs 6,000, while a duty-free allowance of Rs 35,000 can be availed by such passengers in case they are coming from any country other than the above four. For gold, an Indian traveller, who has been residing abroad for over a year, can get gold jewellery worth Rs 50,000 (for males) and Rs 1 lakh (for women) without paying import duty, and a tourist of foreign origin gets a duty-free allowance of Rs 8,000. Customs duty at the rate of 36.05 percent (including education cess) is leviable on the value of dutiable goods that is in excess of the duty-free allowance.

The CNX Nifty touched a high and low of 6,302.15 and 6,215.70 respectively.

The top gainers of the Nifty were Hindalco Industries up by 8.10%, Bank of Baroda up by 5.80%, IndusInd Bank up by 5.11%, IDFC up by 4.89% and PNB up by 4.63%. On the other hand, HCL Technologies down by 1.51%, Jaiprakash Associates down by 0.99%, Sun Pharmaceuticals Industries down by 0.79% and Dr. Reddy's Laboratories down by 0.46% were the only losers.

The European markets were trading in green, France's CAC 40 was up by 1.36%, Germany's DAX was up by 1.06% and United Kingdom's FTSE 100 was up by 1.11%.

The Asian markets concluded Tuesday’s trade mostly in green, on back of peaceful Ukraine solution, with Japan’s Nikkei average clawing higher, snapping four days of losses as some foreign investors scooped up battered shares. The once-a-year meeting of China’s legislature - the National People’s Congress will begin on Wednesday, and it will likely make news, all the more so this year, as it follows the Communist Party’s big reform plenum reform late last year. Indonesia’s rupiah dropped by the most in two weeks after the January trade balance unexpectedly swung into deficit, complicating government efforts to trim the current-account shortfall. South Korean CPI rose to 0.3%, from 0.5% in the preceding month. Japan’s Average Cash Earnings fell to a seasonally adjusted -0.2%, from 0.5% in the preceding quarter whose figure was revised down from 0.8%.