Markets end FY14 at record highs; Nifty surpasses 6,700 mark

Key domestic benchmarks ended the last trading session of FY13-14 at record highs with frontline gauges surpassing their crucial 6,700 (Nifty) and 22,350 (Sensex) levels on the back of continued buying interest of the foreign investors in the Indian equities. The bourses went through volatility where benchmarks, which made gap-up opening, slipped into red for a couple of times during the session. Buying which emerged in late trade mainly acted as saving grace for domestic equity markets and helped them to regain their green terrain. Overall sentiments remained up-beat on Economic Outlook Survey by FICCI, which pegged India’s economic growth to pick up and reach 5.5 percent in 2014-15, as industrial output will recover to expand at 3.3 percent. The industry body has also pegged the agriculture and services sector growth in the next financial year, at 3.3 percent and 7 percent respectively.

Global cues too supported the sentiments with the US markets ending marginally higher in the last trading session on getting report of rise in consumer spending in February at the fastest rate since November. The Asian markets too ended mostly higher. The Japanese market led the pack on weakening yen and despite the industrial production unexpectedly falling 2.3 percent in February from January. European markets too made a positive opening with investors awaiting the closely watched reading on inflation in the euro zone in March.

Back home, sentiments got boost on report that, foreign institutional investors (FIIs) bought shares worth a net Rs 1362.87 crore on March 28, 2014, as per provisional data from the stock exchanges. Sentiments also remained up-beat as shares of public sector banks like Punjab National Bank (PNB), Bank of India (BOI), Bank of Baroda (BOB), Oriental Bank of Commerce (OBC) and Bank of Maharashtra continued their upward march on the bourses after Reserve Bank of India had relaxed the Basel III norms by a year. Shares of metal companies too remained on buyers’ radar on expectations that any move by China to step up infrastructure spending would boost demand for industrial metals.

Additionally, auto stocks edged higher as the Reserve Bank of India (RBI) is widely expected to keep its main lending rate viz. the repo rate unchanged after a monetary policy review on April 1, 2014, as inflation has eased. On the flip side, Power counter declined by over half a percent in trade after Central Electricity Regulatory Commission’s (CERC) order allowing Tata Power and Adani Power, higher tariffs to compensate for increased cost of coal imports was challenged in the Appellate Tribunal for Electricity (APTEL).

The NSE’s 50-share broadly followed index Nifty rose by around ten points to end  above psychological 6,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by around fifty points to finish above the psychological 22,350 mark. Broader markets too traded with traction and ended the session with a gain of over a percentage point. The market breadth remained in favor of advances, as there were 1,706 shares on the gaining side against 1,024 shares on the losing side while 149 shares remain unchanged.

Finally, the BSE Sensex gained 46.30 points or 0.21%, to settle at 22386.27, while the CNX Nifty added 8.30 points or 0.12% to settle at 6,704.20.

The BSE Sensex touched a high and a low of 22467.21 and 22253.78, respectively. The BSE Mid cap index was up by 1.04%, while the Small cap index gained 1.04%.

The top gainers on the Sensex were Hindalco Inds up by 8.71%, Tata Steel up by 3.40%, SSLT up by 2.76%, Maruti Suzuki up by 2.04% and Sun Pharma up by 1.75%, while ONGC down by 2.91%, Dr Reddys Lab down by 2.15%, Tata Power down by 1.85%, ITC down by 1.69% and Wipro down 1.61% were the top losers in the index.

On the BSE Sectoral front, Metal up by 3.87%, Realty up by 2.83%, Consumer Durables up by 2.62%, Auto up by 1.05% and Oil & Gas up by 0.32% were the top gainers, while FMCG down 0.64%, Power down by 0.60%, Capital Goods down by 0.47%, PSU down by 0.14% and Bankex down by 0.09% were the top losers in the space.

Meanwhile, in order to avoid the confusion among stakeholders and to bring consistency in its recent regulation, the Corporate Affairs Ministry has made changes in the depreciation schedule under the new company law.

The ministry has notified that there will not be two classes of companies for depreciation purposes as was indicated in the new company law schedule. Clearing air on depreciation schedule for firms, the Corporate Affairs Ministry noted that all companies need to follow the ‘useful life’ mentioned for various tangible assets in the depreciation schedule whereas the residual value of an asset cannot exceed 5 percent. Further, companies need to disclose the justification in their financial statement if they deviate from these norms.

Regarding the continuous process plants, the Corporate Affairs Ministry has changed the useful life of continuous process plants to 25 years from 8 years specified in the depreciation schedule under the new law which is likely to boost the net profits of companies in industries, such as cement and chemicals. Furthermore, the Ministry has restored revenue-based amortisation for toll roads built under public-private partnerships and has clarified that amortisation of intangible assets must be in accordance with the applicable accounting standards.

The CNX Nifty touched a high and low of 6,730.05 and 6,662.40 respectively.

The top gainers of the Nifty were Hindalco Industries up by 7.72%, Jindal Steel & Power up by 4.20%, Tata Steel up by 3.22%, ACC up by 2.75% and SSLT up by 2.68%. On the other hand, ONGC down by 3.34%, IDFC down by 2.95%, Dr. Reddy's Laboratories down by 2.65%, BHEL down by 2.55% and Tech Mahindra down 2.36% were the top losers.

Most of the European markets were trading in red, France's CAC 40 was down by 0.22% and  Germany's DAX was down by 0.14%  while, United Kingdom's FTSE 100 was up by 0.10%.

The Asian markets concluded Monday’s trade mostly in green following a strong lead from Wall Street. Jakarta Stock Exchange was closed for trade on account of ‘Hindu New Year’ holiday. Thailand’s investment promotion board stated that the latest casualty of country’s five-month political deadlock may be foreign investment as project approvals face delays and new investors hesitate to commit funds. The applications for investment incentives fell 58% to 63.1 billion baht ($1.94 billion) in the first two months of 2014. The Hong Kong Monetary Authority stated that Yuan deposits in Hong Kong increased by 3% to 920.3 billion yuan at the end of February. Total remittance of yuan for cross-border trade settlement amounted to 394.1 billion yuan in February, compared with 492.3 billion in January.

Japan’s industrial production fell to a seasonally adjusted -2.3%, from 3.8% in the preceding month while Housing Starts fell to a seasonally adjusted 1.0%, from 12.3% in the preceding quarter. The National Statistical Office Thailand stated that Thai Trade Balance rose to a seasonally adjusted 3.90B, from -0.75B in the preceding month.