Post Session: Quick Review

Indian markets continued their upmove for the second straight day, though the trade turned choppy midway and the benchmarks found stiff resistance near their all time highs, but following the global peers domestic markets too made a quick recovery after the sudden fall. Traders mainly reacted to the long Lok Sabha election schedule announced by the Election Commission of nine-phase, starting April 7, 2014 and ending May 12,2014, while the counting of votes will take place on May 16, 2014. However, things stabilized in the second half and on strength in rupee coupled with hopes of election rally markets moved up.

The global cues too remained supportive with US markets bouncing back overnight, while most of the Asian markets ended in green, except the Chinese stocks as the national legislature began its annual meeting and concern mounted of Hong Kong facing its first onshore corporate bond default. However, the European markets after flat start were trading marginally in red, as investors turned their attention from the crisis in Ukraine to economic data from Europe and America.

Back home, overcoming the choppiness of the early part of the trade, Indian markets once again showed good gains. Sustained buying by traders kept the spirit high for the markets as they slipped in red for a couple of time during the day in a knee-jerk reaction to the Election schedule announcement and as the services sector contracted for the eighth straight month in February. The HSBC Purchasing Managers' Index (PMI) index rose to 48.8 in February from 48.3 in the previous month, but remained below the 50 mark that separates growth from contraction. Also, there was some report that the Federation of Indian Exports Organisation (FIEO) has said that India's exports will not be able to achieve the target of $325 billion in the current financial year and will fall short by about $10 billion. Late surge in rate sensitive banking and realty stocks strengthened the markets for the day, however both the major indices once again missed the chance to breach their all time high, as the consumer durables and auto stocks kept dragging till last. One non sectoral gauge of road development and infra was buzzing since morning, after the finance ministry cleared the suggestions made by the C Rangarajan Committee, allowing all the projects awarded on premium till yesterday and stuck, to apply for premium reschedule to the National highways Authority of India, which will take it up on a case-to-case basis. Although, finance ministry has approved all the recommendations made by the Rangarajan committee, in its recommendations to the road transport ministry, the committee has said that the premium reschedule for projects should happen only if the toll revenues collected at a particular project is not enough to meet the cost of the project. IL&FS Transportation Network gained over 5%, JP Infratech and IRB Infra gained about a percent.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1,501:1,192, while 145 scrips remained unchanged. (Provisional)

The BSE Sensex gained 55.76 points or 0.26% to settle at 21,265.49. The index touched a high and a low of 21,333.20 and 21,176.16 respectively. Among the 30-share Sensex, 17 stocks gained, while 13 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.93% and 0.42% respectively. (Provisional)

On the BSE Sectoral front, Realty up by 2.15%, Bankex up by 1.34%, PSU up by 1.29%, Capital Goods up by 1.08% and Metal up by 0.61% were the top gainers, while Consumer Durables down by 2.34%, Auto down by 0.36%, Oil & Gas down by 0.18% and Healthcare down by 0.09% were the top losers in the space. (Provisional)

The top gainers on the Sensex were ICICI Bank up by 2.74%, Coal India up by 1.88%, ONGC up by 1.76%, Hindalco up by 1.75% and Cipla up by 1.44%, while, Tata Power down by 3.25%, Bharti Airtel down by 1.77%, Gail India down by 1.21%, RIL down by 1.12% and Tata Motors down by 0.90% were the top losers in the index. (Provisional)

Meanwhile, showing some signs of recovery and stabilisation, the headline HSBC Services Business Activity Index rose to 48.8 in February from 48.3 in the previous month, though the growth remained below the 50 mark that separates growth from contraction for the eighth month. Incoming new work received by private sector companies showed slight rise and firms passed on higher costs to clients, suggesting further rise in consumer price inflation.

Sector data also indicated that four of the six monitored categories recorded falling business activity, with the fastest decrease noted in Financial Intermediation. Also, February data highlighted an eighth consecutive monthly decline in new business placed with Indian services firms, saying that the pace of reduction eased to the weakest in that sequence and was marginal overall.

Giving some comfort on overall front, the seasonally adjusted HSBC India Composite Output Index posted 50.3 compared to 49.6 in January, indicating a fractional rate of expansion with growth centered on the manufacturing sector.

Staffing levels at service providers were broadly unchanged in February, with the index measuring employment posting only fractionally above the 50.0 no change mark. Payroll numbers at manufacturers rose, albeit marginally. Indian service providers reported higher input prices and the rate of cost inflation was solid, but eased since January and was weaker than the series average. Prices charged by services companies were raised further in February, reflecting sustained increases in costs. However, Indian services companies maintained their positive outlook for output growth over the coming year.

India’s services sector accounts for about 60% of gross domestic product (GDP) and the contraction mood for the eighth month in a row along with signs of continued increase in inflation, suggests that growth will remain subdued in coming months too.

India VIX, a gauge for markets short term expectation of volatility lost 3.82% at 13.84 from its previous close of 14.39 on Monday. (Provisional)

The CNX Nifty gained 28.05 points or 0.45% to settle at 6,326.00. The index touched high and low of 6,336.25 and 6,287.80 respectively. Out of the 50 stocks on the Nifty, 32 ended in the green, while 17 ended in the red and one stock remained unchanged.

The major gainers of the Nifty were Bank of Baroda up 6.42%, PNB up by 4.45%, DLF up by 3.61%, Grasim up by 2.99% and IDFC up by 2.91%. The key losers were Tata Power down by 3.19%, Bharti Airtel down by 1.76%, HCL Tech down by 1.34%, Cairn down by 1.30% and Gail down by 1.25%. (Provisional)

The European markets were trading in red; France’s CAC 40 was down 0.30%, Germany’s DAX was down 0.26% and UK’s FTSE 100 down 0.45%.

The Asian markets barring Shanghai Composite and Hang Seng concluded Wednesday’s trade in green following remarks from Russian President Vladimir Putin that allayed fears of an imminent military conflict in Ukraine. At the start of China’s annual meeting of its legislature, the National People’s Congress, Premier Li Keqiang stated that the government would keep its economic-growth target at 7.5% in 2014, unchanged from that of 2012 and 2013. The consumer inflation target was set at 3.5%. The world’s second-largest economy grew 7.6% in 2013, its slowest pace since 1999. Robust demand for mid- to high-end properties saw sales of new homes rise in Shanghai last week, but they were below the average weekly sales over the past 12 months. The purchases of new homes rose 13.5 percent weekly to 179,200 square meters during the week. Philippines CPI rose to a seasonally adjusted annual rate of 0.1%, from 0.7% in the preceding quarter while Taiwanese CPI fell to a seasonally adjusted annual rate of -0.05%, from 0.76% in the preceding quarter.