ANOTHER GOOD PERFORMANCE

It turned out to be yet another swashbuckling performance by Indian equity indices as the joy of closing in the positive territory this Wednesday. Unlike Tuesday's session, bulls showed vigorous buying interests in not only blue chip stocks but in the broader markets as well. Sentiments remained upbeat across the globe as investors traded with conviction supported by expectation of bright corporate earnings figures which eased concerns about nuclear issues in Japan. Meanwhile the wilt in international crude oil prices below $105 a barrel on the back of reports that Libyan rebels retook control of two key port towns and said they would restart crude exports within weeks, supported the local sentiments. Persistent buying by foreign funds in the recent past too underpinned investor mood ahead of the quarterly earnings season as they expected that most of the headwinds have been factored in by the markets and that the companies will report strong earnings for the fourth quarter. While the concerns over inflationary pressure too eased to some extent after fall in crude oil prices. The NSE's 50-share broadly followed index Nifty, settled a tad below the crucial 5,800 support level, after surging around a percent while Bombay Stock Exchange's Sensitive Index, Sensex garnered over one hundred fifty points and closed just below the psychological 19,300 level. Buying was largely seen in the broader markets as investors showed comparatively lower interests in the heavyweights given the fact that the BSE's Midcap and Smallcap indices went home with strong gains of 1.51% and 2.20% respectively. On the sectoral front, Consumer Durables pocket grabbed the top gainer's position after garnering 3.98% led by majors like Whirlpool which soared 6.72%, being the top gainer on the index while stocks like Gitanjali Gems and VIP Industries too gained 3.51% and 2.50% respectively. The rate sensitive Realty counter too remained amid the thick of things and advanced 3.14% on the back of gains in stocks like DB Realty which was up 18.79% and Unitech up 5%. All the paper stocks rallied in the session after the unexpected reports that International Paper Company, the US based paper and packaging giant, bought 53.5% in Andhra Pradesh Paper Mills from its promoters for around Rs 1160 crore, the valuation comes well over 175% from its closing in previous session. Gains in index bellwether Reliance Industries too lifted local mood as it amassed a percentage point by the end of trade. 

On the global front, majority of Asian equity indices finished on an optimistic note led by Japanese Nikkei which surged more than two and a half percent as Japanese companies began resuming production and companies in China reported earnings that beat estimates. The European markets too traded on a sanguine note as France's CAC, Germany's DAX and Britain's FTSE exhibited positive trends. On the other hand, the screen trading for US index futures also indicated that the Dow could open in the green zone.

Earlier on Dalal Street, the benchmark got off to a steady start, in line with Asian peers which traded with conviction tracking optimistic leads from overnight Wall Street where equities closed higher on reports that consumer confidence dropped less than feared. Thereafter, the indices gradually kept gathering momentum through the day's trade as investors continued to aggressively pile up positions in beaten down stocks. The frontline indices hit the intraday high levels in the early hours of second half however the benchmarks came off the day's high level in the mid afternoon session as investors booked partial profits a day ahead of the March series F&O contract expiry. Eventually the bourses snapped seventh straight session in the positive terrain and settled a tad below the psychological levels of 5,800 and 19,300. The markets registered lower volumes compared to Tuesday of over Rs 1.68 lakh crore while the turnover for NSE F&O segment was at over Rs 1.49 lakh crore as India and Pakistan descended on to the battlefield and crossed swords at Mohali in the World Cup semi final, the mother of all sporting encounters in this part of the world. Market breadth remained optimistic as there were 2057 shares on the gaining side against 801 shares on the losing side while 93 shares remained unchanged.

Finally, the BSE Sensex surged by 169.38 points or 0.89% to settle at 19,290.18 while the S&P CNX Nifty climbed 51.30 points or 0.89% to end at 5,787.65.

The BSE Sensex touched a high and a low of 19,357.10 and 19,178.77 respectively. The BSE Mid-cap and Small-cap indices surged by 1.51% and 2.20%, respectively.  Cipla up 5.17%, Jaiprakash Associate up 4.19%, DLF up 3.83%, Mahindra & Mahindra up 3.46% and SBI up 3.27% were the major gainers on the Sensex.

On the flip side, Hindalco Inds down 1.15%, ITC down 0.84%, BHEL down 0.47%, Tata Power down 0.30% and ONGC down 0.28% were the Major losers on the index.

In a move that will help boost the prospects of Indian textile players in an increasingly competitive global export market, the government has on Tuesday increased the allocation for modernization of the textiles industry to Rs 15,404 crore from earlier sanction of Rs 8,000 crore to be disbursed within the current Five Year Plan ending March 2012.

Not only has it increased the allocation for the Technology Upgradation Fund Scheme (TUFS) but has also restructured the same to make it more effective. A wider gamut of players and particularly the smaller players will be able to get greater benefit and improve their scale of operations from the revised and restructured scheme according to the textile ministry. A decision to this effect was cleared by the Cabinet Committee on Economic Affairs (CCEA) on Tuesday.

As per the restructured scheme, out of the fresh allocation a total of Rs 1972 crore would be available for fresh sanctions while the remaining Rs 5,432 crore will be utilized for meeting the already made commitments. Following the meeting of the CCEA, textile ministry stated that the approval from Cabinet will enable immediate lifting of the pause button imposed on the scheme by it since June 29, 2010. The scheme was put on hold last year following lack of funds.

According to the textile players, one way through which the restructuring will improve the reach of the scheme is the fact that capital ceiling under the margin money has been raised and this would encourage the weaving sector to go in for more number of looms and thus would also boost large-scale investments as well. So far, most of the investments were into second-hand looms.

TUFS was launched in 2007-08 to help the industry upgrade to advanced technology in order to improve competitiveness against other exporting countries.  The scheme mainly provides for reimbursement of 5% interest charged by the financial institutions/banks for technology up gradation projects in conformity with the policy. In case of overseas loans, it gives the option of availing a cover for exchange rate erosion of up to 5% per annum instead of 5% interest support. As per the changes made in the scheme the government under the re-structured scheme, 10% capital sops would also be provided on brand new looms.

Consumer Durables (CD) up 3.98%, Realty up 3.14%, Health Care (HC) up 1.95%, Bankex up 1.67%, and Auto up 1.49% were the major gainers in the BSE sectoral space. FMCG down 0.38% was the only loser in the BSE sectoral space.

In a positive development for the coal and mining projects awaiting a nod from the environment ministry, the second meeting of the group of ministers (GoM) on coal mining in go and 'no-go' areas will be held early next months, according to the information released by the coal ministry.

The second meeting of the 12-member GoM was earlier planned to be held on March 25 but was postponed due to the extended Parliament session. The group had earlier met on February 18 but could reach a conclusion on the extent of 'no-go' areas although there were signs from the forest and environment ministry that it would not mind granting some relaxation in the overall 'no-go' areas computation.

'The second meeting of the GoM is likely to take place either on April 7 or April 8,' said the Union Coal Minister Sriprakash Jaiswa on Tuesday. He added that the first meeting of the group, despite having failed to reach a conclusion, was very productive and both the coal and environment ministries were able to narrow down on their differences on some of the crucial issues concerning coal mining in the country.

The issues between the ministry of environment on one side and ministry of coal on other started at the beginning of the last calendar year when the former approached the latter seeking a clarity on how much of India's seven big coalfields will be able to get green node. The environment ministry said that out of the total 6.50 lakh, only 3.50 lakh would be considered for mining as the rest had sensitive forests above them.

The decision was strongly protested by the coal ministry and it got good support of the power and steel ministries as well. At this point, the PMO and the finance ministry intervened and got a large chunk of the 'no go' areas back into the 'go zones'. Now, as many as six central ministries backing the coal ministry in the tussle, the latter is looking to get even greater chunk of coal beds into the 'go zone', a move that can provide a major boost to India's power sector.

The S&P CNX Nifty touched a high and a low of 5,803.15 and 5,753.90 respectively.

The top gainers on the Nifty were Ambuja Cement up 9.42%, DLF up 4.70%, PNB up 4.68%, JP Association up 4.52% and ACC up 4.03%.

The top losers on the index were Hindalco down 1.15%, Cairn down 1.14%, SAIL down 1.09%, IDFC down 0.57% and Reliance capital down 0.55%.

European markets were trading in mix on Wednesday. France's CAC 40 surged 0.90%, Germany's DAX climbed by 1.61% and Britain's FTSE 100 increased by 0.53%.

All the Asian equity indices barring Shanghai Composite finished the day's trade in the positive terrain on Wednesday led by Japanese Nikkei which surged more than two and a half percent as Japanese companies began resuming production and those in China reported earnings that beat estimates. Seoul Composite gained about one percent today, taking support from gains in technology and banking stocks and continued buying by foreign investors. However, Chinese index closed lower, with lingering worries over further monetary tightening, possibly next month, keeping a lid on the market.