Benchmarks start FY’15 on positive note; Sensex surpasses 22,400 mark

Indian equity benchmarks started the new financial year slightly on the positive side, extending the gaining streak for the fifth straight day. The bourses went through volatility where benchmarks, which made gap-up opening, slipped into red for a couple of times during the session. Buying in late trade mainly acted as saving grace for domestic equity markets and helped them to regain their crucial 6,700 (Nifty) and 22,400 (Sensex) bastion. Sentiments remained up-beat with Finance Minister P Chidambaram’s statement that the current account deficit (CAD) is likely to be $35 billion in 2013-14. Meanwhile, foreign institutional investors (FIIs) bought shares worth a net Rs 942.86 crore on March 31, 2014, as per provisional data from the stock exchanges.

However, gains on the up-side remained capped after the Reserve Bank of India (RBI) in its first bi-monthly monetary policy decided to hold the key policy rate or the repo rate at 8 per cent but cautioned that inflation risks could resurface. Sentiments also remained dampened after the expansion in the manufacturing sector moderated in March, after a year-high growth in the previous month. The PMI manufacturing dipped to 51.3 points in March from 52.7 points in February, when it was at a year high, indicating moderate growth.

Global cues remained supportive with the US markets posting gains to end the first quarter on a solid note after Federal Reserve Chair Janet Yellen reassured investors on ultra-easy monetary policy and on hopes that China and Europe will be unveiling fresh stimulus measures. The Asian markets too ended mostly in the green after China’s official PMI survey showed manufacturing managed to continue expanding in March. European markets too supported the sentiments with CAC, DAX and FTSE, all edging higher in early deals.

Back home, rally in software and technology counters too supported the up-move. Fertilizer stocks too remained on buyers’ radar after election Commission (EC) approved to hike urea fixed price by Rs 350/ million tonne (mt). Additionally, shares of sugar manufacturer Andhra Sugars, Balrampur Chini Mills, Bajaj Hindustan, EID Parry, Rana Sugars etc. all edged higher on expectations of higher demand during the summer season from bulk consumers such as ice-cream makers in the spot market. On the flip side, shares of public sector oil marketing companies edged lower after the price of petrol was cut by Rs 0.75 per litre, while the monthly hike in diesel rates was put off during the election season.

The NSE’s 50-share broadly followed index Nifty rose by over fifteen points to end comfortably above the psychological 6,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over sixty points to finish near its psychological 22,450 mark. Broader markets too traded with traction and ended the session in the green. The market breadth remained in favor of advances, as there were 1,572 shares on the gaining side against 1,137 shares on the losing side while 143 shares remain unchanged.

Finally, the BSE Sensex gained 60.17 points or 0.27%, to settle at 22446.44, while the CNX Nifty added 16.85 points or 0.25% to settle at 6,721.05.

The BSE Sensex touched a high and a low of 22485.77 and 22295.65, respectively. The BSE Mid cap index was up by 0.04%, while the Small cap index gained 0.49%.

The top gainers on the Sensex were Wipro up by 3.30%, SSLT up by 2.08%, TCS up by 2.08%, Tata Steel up by 1.89% and Mahindra & Mahindra up by 1.77%, while Hindalco Inds down by 2.54%, Maruti Suzuki down by 2.04%, ICICI Bank down by 1.74%, HDFC Bank down by 1.44% and BHEL down 1.32% were the top losers in the index.

On the BSE Sectoral front, IT up by 1.65%, Consumer Durables up by 1.33%, Teck up by 1.27%, Oil & Gas up by 1.09% and Healthcare up by 0.54% were the top gainers, while Bankex down 1.18%, Realty down by 0.85% and Capital Goods down by 0.32% were the only losers in the space.

Meanwhile, conditions in India’s manufacturing sector signaled a slight and weaker improvement in March, according to the HSBC India Manufacturing Purchasing Managers’ Index as output and new orders increased at weaker rates. Down from February’s one-year high of 52.5, the index rose at 51.3 for the month under review. Nonetheless, the PMI average for Jan-Mar 2014 (51.7) was the highest since the same period in 2013.

Although foreign orders came in at their fastest pace in almost three years, the new orders rose at a weaker clip in March, with the respective index dropping since February and being below the long-run series average. Increased competition for new work and the elections had mainly weighed on growth. The overall new orders index - which measures both domestic and foreign demand - fell to 52.7 in March from 54.9, down to its lowest level this year, but still comfortably above the 50 mark that divides growth from contraction. However, stretching the current period of growth to six months, Indian manufacturers reported higher new export orders in March.Among all the sectors, Consumer goods continued to outperform the other two market groups, with robust increases in output and new orders registered in March. While, operating conditions also improved at intermediate goods companies, but they deteriorated in the capital goods category.

Eased inflationary pressures was witnessed as Input costs rose at the weakest rate in nine months and one that was below the series average, output prices increased at the slowest pace since last June.

On growth front, however the survey projected growth to remain moderate in coming months as fiscal tightening, relatively high corporate leverage, and rising non-performing loans in the banking system posed headwinds to growth. However, it also highlighted the recovery in growth could prove protracted after the upcoming elections, which might see traction on economic reform and execution of investment projects.

The CNX Nifty touched a high and low of 6,732.25 and 6,675.45 respectively.

The top gainers of the Nifty were Wipro up by 3.46%, Cairn India up by 3.35%, Power Grid Corporation of India up by 2.81%, Bank of Baroda up by 2.12% and HCL Technologies up by 1.98%. On the other hand, BPCL down by 3.09%, Hindalco Industries down by 2.72%, Kotak Mahindra Bank down by 2.31%, Maruti Suzuki India down by 2.27% and Asian Paints down 2.14% were the top losers.

The European markets were trading in green, France's CAC 40 was up by 0.71%, Germany's DAX was up by 0.51% and United Kingdom's FTSE 100 was up by 0.42%.

The Asian markets barring KLSE Composite and Nikkei 225 concluded Tuesday’s trade mostly in green after the Fed chair Janet Yellen stated that the central bank will extend extraordinary support for the economy for some time to come. Chinese Manufacturing PMI also rose to an annual rate of 50.3, from 50.2 in the preceding month. However, China’s manufacturing engine contracted in the first quarter of 2014, adding to market expectations of government stimulus to arrest a loss of momentum in the world’s second-largest economy this year. The final Markit/HSBC Purchasing Managers’ Index (PMI) fell to an eight-month low of 48.0 in March from February’s final reading of 48.5. The outcome was in line with last week’s preliminary PMI reading of 48.1.

Indonesian Inflation fell to a seasonally adjusted 7.32%, from 7.75% in the preceding month while Trade Balance rose to a seasonally adjusted 0.79B, from -0.44B in the preceding month. Thai CPI rose to a seasonally adjusted annual rate of 2.11%, from 1.96% in the preceding month. Japan’s Average Cash Earnings rose to a seasonally adjusted 0.0%, from -0.2% in the preceding quarter.