Post Session: Quick Review

Indian markets snapped the March F&O series on a high note with only slight volatility visible towards the expiry of the series on Thursday. It was only in the beginning that the markets made a cautious start after that the benchmark indices started moving up and in the final hours of the trade scaled their fresh all times high, while the continued FII interest helped the market outperform the global peers, traders took cues from the Credit rating agency Moody's latest report that the sharp fall in India's current account deficit (CAD), will limit its vulnerability to global financial market volatility, though persistently high inflation remains a major risk. There was some profit taking in the last leg of trade that dragged the benchmarks from their high points.

The global cues were not very supportive as the US markets ended lower overnight on renewed worries from Ukraine, while the European markets too made a soft start ahead of the US jobless-claims and economic-growth data. However, apart from the mainland Chinese indices most of the Asian markets ended higher.

Back home, the domestic markets continued their upsurge and the March series ended with gains of around six percent, mainly led by the banking index. There was lots of development that guided the trade for the day. The metals and mining sector kept buzzing after a panel set up by Supreme Court recommended lifting a ban on iron ore mining in Goa, albeit limiting output to 20 million tonnes, about 40 per cent of what the state produced in the year ended March 31, 2012. The court will consider the panel’s suggestions  in few days. Also, the government has finally set up a coal regulatory authority through an executive order to bring transparency in the sector which will advice the government on the principles and methodologies to determine the price. The aviation stocks too showed some upmove after the RBI extended the deadline for raising working capital via external commercial borrowings by domestic airlines to March 2015 from December 2013. However, the sector that remained in lime light was banking, especially the state-run banks, including top lender State Bank of India and Bank of Baroda, after global investment major Goldman Sachs upgraded the banking stocks, saying that macro recovery and potential for post-election reforms could lead to a gradual reduction in stressed loans. It is expecting a rally in the high-beta PSU banks on emerging macroeconomic and political clarity. Finally, the Nifty and Sensex closed at record high levels and market witnessed huge over 4 lakh crore of volumes. For the series, while the benchmarks gained around 6%, the Mid cap index was up by over 8% and Small cap index gained over 7%, Banking and Capital good gained over 17%, Metals and Oil & Gas gained over 11%, FMCG and Auto gained over 5%, on the other hand IT was the major laggard for the series, down by around 10% followed by Pharma which lost around 6%. 

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1,679: 1,118, while 164 scrips remained unchanged. (Provisional)

The BSE Sensex gained 105.13 points or 0.48% to settle at 22,200.43. The index touched a high and a low of 22,307.74 and 22,094.29 respectively. Among the 30-share Sensex, 20 stocks gained, while 10 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.62% and 1.06% respectively. (Provisional)

On the BSE Sectoral front, PSU up by 1.66%, Consumer Durables up by 1.51%, Realty up by 1.19%, Capital Goods up by 1.01% and Oil & Gas up by 1.00% were the top gainers, while Healthcare down by 0.80% and IT down by 0.02% were the top losers in the space. (Provisional)

The top gainers on the Sensex were SBI up by 4.46%,  Bharti Airtel up by 3.46%, Hero MotoCorp up by 3.14%, Bajaj Auto up by 2.03% and ONGC up by 1.98%. On the other hand, Dr Reddys Lab down by 2.08%, SSLT down by 1.73%, Sun Pharma down by 1.48%, Tata Motors down by 1.31% and Infosys down by 0.67% were the top losers in the index. (Provisional)

Meanwhile, in order to bring transparency in tainted coal sector of the country, the government has set up coal regulator. The coal regulator will advise the government on principles and methodologies for coal price determination, whereas state-owned Coal India (CIL) will continue to fix prices, subject to the coal ministry’s approval.

The function of the coal regulator includes formulation of principles and methodologies for determination of price of raw coal, washed coal or any other byproduct of washing. Apart from that, the regulator will suggest the government on allocation of reserves, procedures for sampling and standards of performance without venturing in matters relating to mines safety and environmental issues. Further, the coal regulator will give advice regarding development of mining technologies, promoting competition, efficiency and economy in the activities of the coal industry, promotion of investment, beneficiation methods and conservation of coal resources. The regulator will comprise of a chairperson and four members, which will be selected on the recommendations of a six-member committee, headed by the Cabinet secretary.

The need to set up a coal regulator emerged when the lack of transparency in grant of reserves led to a controversy over the alleged favourable allocations causing a notional loss of Rs 1.86 lakh crore to the government. Coal regulator will ensure greater transparency in auctioning the fully explored coal blocks and will also enable the government to allot coal mining licences through competitive bidding. Further, domestic coal production is also expected to increase after the formation of coal regulator. At present, 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 overseas countries.

India VIX, a gauge for markets short-term expectation volatility gained 3.08% at 18.31 from its previous close of 17.76 on Wednesday. (Provisional)

The CNX Nifty gained 43.35 points or 0.66% to settle at 6,644.75. The index touched high and low of 6,673.95 and 6,599.50 respectively. Out of the 50 stocks on the Nifty, 34 ended in the green, while 15 ended in the red and one stock remains unchanged. 

The major gainers of the Nifty were IDFC up 5.65%, SBI up by 4.21%, Hero MotoCorp up by 3.77%, Bharti Airtel up by 3.63% and PNB up by 3.59%. The key losers were Ranbaxy down by 2.55%, Dr. Reddy's Laboratories down by 1.66%, Grasim down by 1.62%, Sun Pharma down by 1.53% and SSLT down by 1.45%. (Provisional)

Most of the European markets were trading in green; France’s CAC 40 was up by 0.01% and Germany’s DAX was up by 0.15%, while UK’s FTSE 100 down by 0.31%.

The Asian markets concluded Thursday’s trade mostly in green while Shanghai dropped as financial shares declined over poor earnings reports while property developers retreated after days of gains. South Korean Consumer Confidence remained unchanged at 108, from 108 in the preceding month. Monthly land sales in Shanghai dipped below the 10-billion-yuan ($1.6 billion) threshold for the first time in a year amid a double-digit drop in supply volume. A total of 12 land parcels, excluding those designated for public use, had been auctioned in the city so far this month. They fetched a combined 9.84 billion yuan, a month-on-month decline of 12.8 percent and a year-on-year rise of 4 percent by value. Hong Kong, the Chinese mainland and Singapore have been the region’s biggest buyers of real estate outside Asia and are set to remain key sources in the next few years.