Post Session: Quick Review

Indian markets returned from the long weekend with renewed vigor and the benchmarks scaled fresh all time highs intraday. While, the good global cues supported the mood, the election euphoria kept the indices moving higher, fuelling the momentum of the markets. The early gains to the market came with investment banker Goldman Sachs upgrading Indian equities to “overweight” from “marketweight” and raising its target on Nifty to 7,600, citing reduced external vulnerabilities, including a narrowing current account deficit, and potential for gains ahead of elections that conclude in May had given the initial push. Traders also took cues from the sustained foreign capital inflows.

The global cues were mostly positive as the US markets ended higher overnight on a positive report showing a stronger than expected rebound in industrial production in the month of February, while the Asian markets too followed the trend and most of them ended in green on sign of easing Ukraine anxiety. However, the European markets made a soft start, putting the local markets under pressure.

Back home, the local markets though gave up most of their early gains by the end but managed to extend their gaining momentum to the new week with modest rise showing mood of festivity. Though, selling started appearing in second half with growing sense that market was overbought in the near-term. Rupee that was looking strong in early trade too gave up gains in latter half and weighed on the sentiments. Benchmarks even slipped into red for a couple of time going towards the closing with cracks appearing in the capital goods and realty sector, but finally managed to end flat. Sectorally, the defensive FMCG sector was the top gainer on BSE up by around two percent, while Power, Consumer Durables and Oil & Gas too helped the markets to hold the forte in green. Auto sector that kept on buzzing since morning with heavy weight Maruti Suzuki India surging to record high after the company allaying the minority stakeholders’ fear agreed to make changes to its deal structure for the Gujarat plant. The first change in this deal would be that entire capital expenditure would be funded through depreciation and equity brought in by Suzuki (the parent) against the earlier plan of funding a part of the project through post-tax profits of Maruti Suzuki.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1,543:1,260, while 173 scrips remained unchanged. (Provisional)

The BSE Sensex gained 22.81 points or 0.10% to settle at 21,832.61. The index touched a high and a low of 22,040.72 and 21,785.38 respectively. Among the 30-share Sensex, 16 stocks gained, while 14 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.95% and 0.97% respectively. (Provisional)

On the BSE Sectoral front, FMCG up by 1.84%, PSU up by 1.35%, Power up by 1.27%, Consumer Durables up by 0.89% and Oil & Gas up by 0.87% were the top gainers, while IT down by 0.82%, Realty down by 0.52%, Teck down by 0.47%, Capital Goods down by 0.35% and Auto down by 0.17% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 7.65%, SBI up by 2.71%, ITC up by 2.64%, Coal India up by 2.33% and Tata Power up by 1.56%, while, Tata Motors down by 3.13%, Mahindra & Mahindra down by 1.33%, Infosys down by 1.22%, TCS down by 1.21% and Wipro down by 1.18% were the top losers in the index. (Provisional)

Meanwhile, Micro Finance Institutions Network (MFIN), the registered body of micro-finance companies, has sought for the Reserve Bank of India’s (RBI) approval to become the first self-regulatory organisation (SRO) for microfinance institutions. Besides filing a formal application, the MFIN has also completed necessary structural changes in its management.  The association has inducted three independent directors on the board and by June, the association would have 12 board directors including four independent directors. Further, MFIN has put in place all necessary requirements according to the norms.

Last month, the RBI released guidelines to recognize industry associations as self-regulatory organisations (SROs) of non-banking financial companies that are engaged in micro finance (NBFC-MFIs) based on the recommendations made by the Y H Malegam committee. The Malegam panel was set up by the apex bank to look into regulatory aspects of micro-lending following the Andhra Pradesh microfinance crisis of 2010.

The central bank, in its notification, had stated that in order to become an SRO, the association will have to adhere to a set of functions and responsibilities such as formulating and administering a code of conduct, ensuring borrower protection, having a grievance and dispute redressal mechanism for clients, monitoring compliance by NBFC-MFIs with the regulatory framework, and submission of its financials and annual report among others. RBI further notified that an industry body should have independent directors comprising at least a third of its board, and representation of both small and large micro-lenders on the governing council. 

India VIX, a gauge for markets short term expectation volatility gained 4.13% at 17.12 from its previous close of 16.44 on Friday. (Provisional)

The CNX Nifty gained 10.05 points or 0.15% to settle at 6,514.25. The index touched high and low of 6,574.95 and 6,497.65 respectively. Out of the 50 stocks on the Nifty, 29 ended in the green, while 20 ended in the red and one stock remained unchanged.

The major gainers of the Nifty were Maruti Suzuki up 7.54%, Power Grid up by 3.56%, IndusInd Bank up by 3.00%, SBI up by 2.83% and ITC up by 2.78%. The key losers were Tata Motors down by 2.99%, Lupin down by 1.65%, M&M down by 1.58%, Infosys down by 1.48% and Wipro down by 1.34%. (Provisional)

The European markets were trading in red; France’s CAC 40 was down 0.17%, Germany’s DAX was down 0.63% and UK’s FTSE 100 down 0.23%.

The Asian markets barring Jakarta Composite concluded Tuesday’s trade in green following a strong rally on Wall Street. Indonesia’s rupiah rose to a 19-week high after foreign funds pumped money into local stocks as Jakarta Governor Joko Widodo announced he would run in July’s presidential election. The country’s foreign debt accelerated in January on the back of growing demand from the private sector to finance their expansion. The foreign debt rose to $269.3 billion, or 7.1% year-on-year. The yuan tumbled to an 11-month low after the Chinese central bank doubled the currency’s permitted trading band as it continues to relax its control over the exchange rate. Hong Kong’s unemployment rate remained unchanged at a seasonally adjusted 3.1%, from 3.1% in the preceding month.