Post Session: Quick Review

Thursday was a remarkable day for the Indian markets when the he BSE Sensex rose to a record high at 21525.14 points, surpassing the previous all-time high set on December 9. Benchmarks showed a steady trade extending gains for the third straight session. After making a positive start, bourses kept on gaining strength and stopped only with the closing of the trade. There was across the board buying that helped the benchmarks reach their fresh highs for the year and the traders remained jubilant on election hopes and mainly on the back of good economic report of declining Current Account Deficit (CAD), which reducing sharply came at a four-year low to $4.2 billion or 0.9% of GDP, in December quarter of 2013-14, primarily on account of a decline in the trade deficit as merchandise exports picked up and imports moderated, particularly gold imports.

The global cues though remained mixed, with US markets taking a breather after the big rally, while the European markets made a cautious start ahead of the European Central Bank’s interest-rate decision. The ECB’s 24-member Governing Council will release its monthly interest-rate decision for the euro area later today. However, the local markets took cues from the gains in the Asian peers who surged, led by the Japanese market after the yen weakened and an advisory committee said the world’s largest pension fund doesn’t need a domestic-bond focus.

Back home, the domestic market made a hat-trick on Thursday, strengthening further on the back of continued buying by the foreign institutional investors (FIIs), who remained a net buyer for the 14 th day in a row till last session. FIIs, the backbone of India equity markets are mostly responsible for big swings in the markets and the day’s surge was mainly induced by them. The other factor that greatly influenced the trade was surge in rupee, which strengthened by good over 50 paise in a day, hitting its three month high on sustained selling of dollar after a sharp decline in CAD in the third quarter. Though, all the sectoral gauges showed good upmove, high beta realty was in limelight surging by over four percent on BSE. Metal, Oil & Gas, Power and Capital Goods sector too surged by over two percent. However, by the end the defensive healthcare lost its momentum and ended marginally in red, turning to be the lone laggard. Banking stocks too performed well despite Finance Minister P. Chidambaram after a performance review meeting with public sector banks and financial institutions said that Public sector banks could report higher non-performing assets in the current financial year ending March, which increased due to the stress in large corporate accounts, the small-scale industry, and small and medium enterprises. By the end while, the Sensex crossed 21500 mark, Nifty snapped the session at 6400. The broader markets too showed a consistent performance and added over a percent for the day.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1694: 1041, while 148 scrips remained unchanged. (Provisional)

The BSE Sensex gained 225.76 points or 1.06% to settle at 21,502.62. The index touched a high and a low of 21,525.14 and 21,329.88 respectively. Among the 30-share Sensex, 24 stocks gained, while 6 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 1.25% and 1.22% respectively. (Provisional)

On the BSE Sectoral front, Realty up by 4.13%, Power up by 2.53%, Oil & Gas up by 2.29%, Metal up by 2.25% and PSU up by 2.06% were the top gainers, while Healthcare down by 0.35% was the only loser in the space. (Provisional)

The top gainers on the Sensex were Hindalco up by 4.42%, BHEL up by 4.05%, ONGC up by 2.71%, NTPC up by 2.63% and ICICI Bank up by 2.57%, while, Cipla down by 1.36%, Wipro down by 0.86%, Tata Motors down by 0.85%, TCS down by 0.45% and Hindustan Unilever down by 0.31% were the top losers in the index. (Provisional)

Meanwhile, as per the Federation of Indian Exports Organisation (FIEO), India’s exports will fall short by about $10 billion from its set target of $325 billion for the current fiscal. During April-January’FY14, value of exports increased by 5.71% to $257.09 billion as against $243.19 billion in the same period of previous fiscal year. For the remaining two months of current fiscal, the country requires about $68 billion to reach the set target, which seems difficult.

FIEO President Rafeeq Ahmed has stated that factors like declining manufacturing growth and slow recovery in global demand are adversely impacting the country’s exports. Highlighting liquidity as a big issue for exports, Ahmed stated that pending claims of refund of service tax, duty drawback, rebate claims and VAT are impacting the domestic firms’ exports. Banks should provide credit at affordable rates to exporters.Turning to sluggish country’s infrastructure, the FIEO President asserted that inadequate infrastructure has also been affecting overseas shipments as the transactions costs is very high.

Further, Ahmed added that the government should fix targets for five years instead of annual targets for exports and work according. FIEO is presently preparing a draft for the new Foreign Trade Policy for 2014-19 including measures to boost exports, which will be submitted to the new government in the next two and a half months time.

India VIX, a gauge for markets short term expectation of volatility gained 4.60% at 14.47 from its previous close of 13.84 on Wednesday. (Provisional)

The CNX Nifty gained 71.45 points or 1.13% to settle at 6,400.10. The index touched high and low of 6,406.60 and 6,339.70 respectively. Out of the 50 stocks on the Nifty, 41 ended in the green, while 9 ended in the red.

The major gainers of the Nifty were JP Associate up 8.49%, DLF up by 5.08%, Hindalco up by 4.32%, BPCL up by 4.27% and BHEL up by 3.92%. The key losers were Cipla down by 1.31%, Wipro down by 1.00%, Lupin down by 0.72%, Tata Motors down by 0.71% and TCS down by 0.53%. (Provisional)

The European markets were trading in green; France’s CAC 40 was up 0.63%, Germany’s DAX was up 0.26% and UK’s FTSE 100 up 0.10%.

The Asian markets concluded Thursday’s trade in green with Japan’s Nikkei share average jumping to a five-week high as investors took heart from news about the world’s largest pension fund’s allocation plan, and as a weaker yen boosted shares of exporters. Indonesia’s rupiah advanced to a 16-week high after overseas investors pumped money into the nation’s assets on improving economic fundamentals. Indonesia’s 10-year bonds rose for a seventh day after inflation slowed and the cost to insure the nation’s debt against default dropped to the least since June. In Hong Kong, the Land Registry has received 3,159 sale and purchase agreements for residential units in February, down 29.6% month-on-month and down 49.9% year-on-year. It received 3,987 sale and purchase agreements for all building units in the month, down 31.5% month-on-month and down 58.7% year-on-year.