Buying in late hour help benchmarks to eke out modest gains

Indian equity benchmarks staged a smart recovery in last leg of trade on Friday and ended the session slightly in the green, pairing all their early losses, supported by short-covering in beaten down but fundamentally strong stocks. The benchmark got off to a gap down start on the back of feeble global cues and extended their downfall to touch intraday lows. Sentiments also remained down-beat after the global rating agency Fitch slashed India’s FY14 GDP growth forecast to 4.7 per cent, lower than the official estimate of 4.9 per cent. Moreover, Fitch cut its real GDP growth forecasts for 2014-15 to 5.5 per cent and for 2015-16 to 6 per cent as investment remains subdued. The indices even went on to test important psychological 21,600 (Sensex) and 6,450 (Nifty) levels, but the key gauges got solid support around those intraday low levels as they convalesced from thereon.

Sentiments remained down-beat since morning after global markets witnessed a sell-off, as global concerns resurfaced after latest reports indicated that Russia’s Defense Ministry announced new military operations in several regions near the Ukrainian border on Thursday. All the Asian equity counters shut shop in the red, as heightened tension in Ukraine ahead of a weekend referendum sent investors scurrying out of riskier assets. European shares too receiving negative handover from Asian pacific shares, edged lower in early deals.

Back home, buying which emerged in late trade mainly acted as saving grace for the equity markets and helped domestic gauges to re-conquer their crucial 6,500 (Nifty) and 21,800 (Sensex) bastions. Some support also came after annual rate of inflation, based on monthly WPI, which cooled off  to nine month low at 4.68% for the month of February, 2014 as compared to 5.05% in January, bolstered hopes that RBI would leave key policy rates on hold, if not slash them in its monetary policy on April 1, 2014. Report that foreign institutional investors (FIIs) bought shares worth a net Rs 616.62 crore on March 13 too aided sentiments.

Meanwhile, pharma stocks rose on defensive buying in weak market, while shares of leading two wheeler makers also gained. On the flip side, software and technology stocks like, Wipro, TCS and HCL Technologies edged lower after Infosys issued weak revenue outlook for current quarter as well as next financial year.

The NSE’s 50-share broadly followed index Nifty rose by over ten points and managed to end just above the psychological 6,500 support level, however Bombay Stock Exchange’s Sensitive Index -- Sensex rose by over thirty points to finish above the psychological 21,800 mark. Broader markets, however, underperformed benchmarks and ended the session in the red with a cut of around quarter a percent. The market breadth remained in favor of decliners, as there were 1,207 shares on the gaining side against 1,550 shares on the losing side while 146 shares remain unchanged.

Finally, the BSE Sensex gained 35.19 points or 0.16%, to settle at 21809.80, while the CNX Nifty added 11.10 points or 0.17% to settle at 6,504.20.

The BSE Sensex touched a high and a low of 21853.32 and 21573.48, respectively. The BSE Mid cap index was down by 0.23%, while the Small cap index lost 0.34%.

The top gainers on the Sensex were BHEL up by 2.54%, L&T up by 2.46%, Dr Reddys Lab up by 1.53%, Cipla up by 1.47% and Tata Steel up by 1.47%, while Wipro down by 2.90%, Bharti Airtel down by 1.93%, Axis Bank down by 1.80%, HDFC Bank down by 1.42% and HDFC down 1.41% were the top losers in the index.

On the BSE Sectoral front, Capital Goods up by 1.85%, Realty up by 1.00%, Auto up by 0.94%, Healthcare up by 0.81% and Power up by 0.50% were the top gainers, while Bankex down 0.68%, Teck down by 0.56%, IT down by 0.40%, Consumer Durables down by 0.25% and PSU down by 0.01% were the top losers in the space.

Meanwhile, India's coal imports increased by 20 percent to 11.6 million tonnes in February from a year earlier on account of fall in global coal prices and strengthen rupee. India`s reliance on foreign coal has grown over the years as domestic production has failed to grow in line with demand. During April-February FY'14, coal imports rose by 5 percent to 143.5 million tonnes. Indonesia is the biggest coal supplier to India having market share of more than 50 percent in country’s total coal imports.

India, despite being world's fifth largest in terms of reserves, the third-largest producer of coal has failed to keep pace with increasing domestic demand, making the country the world`s third-largest importer of the fuel. Indian domestic coal demand is around 35 percent higher than domestic supply, resulting into a high deficit of which a huge part is being met by costly imports from Indonesia, South Africa and Australia. In the previous fiscal, India imported $16 billion worth of coal. Presently, Coal India (CIL) is the only producer of domestic coal accounting for around 80 percent of the domestic production. CIL is currently struggling to meet domestic coal requirement. CIL has recently noted that its production target of 475 million tonne (MT) coal for the current fiscal amid concerns like shutdown of mining activities in Talcher Coalfields in Odisha, and Cyclone Phailin.

Acute coal shortages in the country have become primary reason for power deficit as coal-fired plants account for 68% of India's installed electricity capacity. During the April-January FY'14, India`s coal-based power generation rose 8 percent to 587.64 billion kilowatt hour from a year earlier, which led to surge in coal imports by 31 percent to 66 million tonnes by power producers in the reported period.

In order to meet India’s growing coal demand, the government has planned to invite bids from private players to start coal mining in a public-private partnership (PPP) mode in the country, which would also end the monopoly of public sector unit Coal India. The government is likely to auction 10 coal blocks in the month of March this year.

The CNX Nifty touched a high and low of 6,518.45 and 6,432.70 respectively.

The top gainers of the Nifty were DLF up by 3.95%, Jaiprakash Associates up by 3.64%, BHEL up by 3.17%, NMDC up by 2.62% and Larsen & Toubro up by 2.45%. On the other hand, Ranbaxy Laboratories down by 3.18%, HCL Technologies down by 2.89%, Wipro down by 2.85%, Axis Bank down by 2.34% and Bharti Airtel down 1.68% were the top losers.

The European markets were trading in red, France's CAC 40 was down by 0.64%, Germany's DAX was down by 0.27% and United Kingdom's FTSE 100 was down by 0.14%.

The Asian markets, barring Jakarta Composite concluded Friday’s trade in red with a sharp slowdown in China’s economy rattling Asia’s largest stock markets, with Japan and Hong Kong closing for its worst week in nearly two years. Investors are keeping an eye on a vote in Crimea this weekend when citizens will decide whether to stay with Ukraine or join Russia. Indonesia’s rupiah was set for a sixth week of gains, the longest winning streak since April 2011, as overseas investors bought more of the nation’s stocks. Fitch Ratings warned investors to remain cautious on Indonesia’s growth this year on the back of bubble-like symptoms. The credit rating agency added that Indonesia’s inflated property prices in the past three years, compared to its gross domestic product, are showing bubble-like symptoms.

Japan’s industrial production rose to a seasonally adjusted 3.8%, from 4.0% in the preceding month. Singaporean Retail Sales rose to a seasonally adjusted 0.1%, from -5.5% in the preceding month while Singaporean Unemployment Rate remained unchanged at 1.8%, from 1.8% in the preceding quarter. The value and volume of home sales in China fell in the first two months of this year as buying sentiment cooled because local governments late last year unveiled tighter property curbs. The value of new homes sold across the country fell 5% from the same period a year earlier to 598.5 billion yuan ($97.5 billion) between January and February.