Post Session: Quick Review

Indian equity markets remained in high spirits for yet another session after Finance Minster presented ‘Interim Budget 2014-15’, which was termed as populous by many and unrealistic by some. The secular up-move of the bourses was mainly on account of across the board buying activities, thanks to mostly positive regional counterparts. The upbeat session of trade saw participation of both frontline and broader indices. By close, while Sensex and Nifty, locked gains of close to 3/4 of a percent to end past the crucial 20,600 and 6,100 levels respectively, broader indices too puffed up similar quantum of gains. ABB’s spending results mainly boosted the sentiment for entire midcap pivotal, while small-cap index simply followed the suite. ABB’s reported over three fold jump in its Q4 net profit at Rs 58.59 crore as compared to Rs 16.77 crore for the same quarter in the previous year.

On the global front, Asian stocks rose, with the regional benchmark index poised for a three-week high, after the Bank of Japan maintained unprecedented asset purchases and boosted lending programs. On the flip side, in the European region, German stocks outperformed regional peers in cautious trade early on Tuesday ahead of data expected to show improved sentiment over Europe's biggest economy, while top European shares edged off three-week highs.

Closer home, markets after getting a subdued start, reversed trajectory to trade in green and from thereon went on adding gains. Although, bit of volatility crept in the last hour of trade, markets managed to stay fervently in green, with gains of close to 3/4 of a percent. Sectorally, while most of the indices ended in green, Oil & Gas, Information Technology and Technology counters were the underperformers. On the flip side, Banking, Capital Goods and Auto counters were the prominent gainers.  Banking shares added to previous session’s gains after finance minister announced a fiscal deficit target of 4.1 percent of the GDP, and a gross market borrowing of Rs 5.97 lakh crore, below market expectations. Besides, Auto also gained momentum for second consecutive session after FM in the interim budget proposed to cut excise duty to 8% from 12% for small car, Motorcycle, Scooters; and slashed it to 24% from 30% for SUVs. Additionally, Shares in metal companies gained on value-buying as investors placed bets on higher global prices and a spurt in Chinese buying. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1410: 1224, while 185 scrips remained unchanged. (Provisional)

The BSE Sensex gained 145.47 points or 0.71% to settle at 20609.53. The index touched a high and a low of 20685.02 and 20436.48 respectively. Among the 30-share Sensex, 19 stocks gained, while 11 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.67% and 0.78% respectively. (Provisional)

On the BSE Sectoral front, Capital Goods up by 1.95%, Bankex up by 1.92%, Power up by 1.64%, Metal up by 0.99% and Auto up by 0.94% were the top gainers, while FMCG down by 0.31%, IT down by 0.13% and Teck down by 0.09% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Axis Bank up by 4.36%, HDFC up by 2.79%, Maruti Suzuki up by 2.69%, Tata Power up by 2.65% and ICICI Bank up by 2.31%, while, Wipro down by 1.01%, Gail India down by 0.95%, ITC down by 0.89%, Bharti Airtel down by 0.69% and Cipla down by 0.49% were the top losers in the index. (Provisional)

Meanwhile, global rating agency Moody's underscored that India's interim budget 2014-15, somewhat termed as populist by the rest, was in line with the expectations and underpin the government's ‘Baa3’ rating with a stable outlook. Moody's stable outlook on India's Baa3 sovereign rating, which incorporates the macro-economic risks posed by the government's high deficit and debt ratios, also takes into account its recent efforts to bring down the fiscal deficit through ad hoc measures. Besides, it also incorporates the medium-term credit support provided by the government's favorable access to domestic savings for the purposes of financing its large borrowing requirements.

However, the rating agency has said that the new government would determine the longer-term fiscal trends that could impact the government's credit profile. Further, it also cautioned that India's fiscal position remains 'weak'. Moody’s although acknowledged that India’s fiscal deficit ratios had declined over the last few years, but remained higher than those of similarly rated peers. Moody's further highlighted governments higher-than- budgeted subsidy bill reveals the fiscal position's exposure to commodity prices and exchange-rate fluctuations.

Some of the global rating agencies like Moody's, S&P and Fitch have repeatedly threatened to lower India's credit rating and a downgrade would mean pushing the country's sovereign rating to junk status, making overseas borrowings by corporates costlier. In the interim budget 2014-15, the government pegged fiscal deficit for the current financial year to be contained at 4.6 per cent of GDP, which is lower than the fiscal deficit of 4.9 per cent of GDP in the previous financial year.

India VIX, a gauge for markets short term expectation of marginally lost 2.65% at 15.41  from its previous close of 15.83 on Monday. (Provisional)

The CNX Nifty gained 45.95 points or 0.76% to settle at 6,119.25. The index touched high and low of 6,141.70 and 6,066.80 respectively. Out of the 50 stocks on the Nifty, 37 ended in the green, while 13 ended in the red.

The major gainers of the Nifty were Jindal Steel & Power up 6.66%, Kotak Bank up by 4.49%, Axis Bank up by 4.28%, HDFC up by 2.99% and Tata Power up by 2.58%. The key losers were HCL Tech down by 1.14%, ITC down by 1.11%, Gail down by 1.10%, BPCL down by 0.98% and Bharti Airtel down by 0.90%. (Provisional)

Most of the European markets were trading in red; Germany’s DAX down by 0.24%, UK’s FTSE 100 down by 0.19% and France’s CAC 40 was down 0.62%.

Most of the Asian equity indices concluded Tuesday's trade in green, after the Bank of Japan maintained remarkable asset purchases and encouraged lending programs. The yen weakened the most in a month after the Bank of Japan doubled a growth-funding facility. The Japanese central bank guaranteed to maintain plans to expand the monetary base by 60 trillion yen ($585 billion) to 70 trillion yen per year. It doubled a funding facility to 7 trillion yen and said individual banks could borrow twice, as much low interest money as previously under a second lending facility. Taiwan's GDP, on an unadjusted basis, advanced 2.95 percent year-on-year in the December quarter, which was slightly faster than the 2.92 percent gain the government had estimated in January.

Shanghai Composite fell, retreating from a two-month high, as the central bank drained liquidity from the financial system. The People’s Bank of China sold repurchase contracts for the first time since June today after data showed record new credit was extended last month. As per the government report, China's FDI climbed 16.1 percent to $10.76 billion in January from a year earlier. That compares with the 2.5 percent median growth forecast and a 3.3 percent rise in December.