Indian benchmarks snapped the last trading day of the week on a quiet note but managed to accumulate around four and half a percentage point of gain for the week thereby making it the biggest weekly gain in last 17 weeks. Today's session largely remained characterized by choppiness as the indices moved in a tight band after getting off to a gap up opening and looked to consolidate. Sanguine global sentiments supported the initial short covering rally but the optimism met with strong resistance at crucial 5,600 levels on the nifty which eventually took U-turn for the 50 share benchmark. Selling pressure in heavyweights gathered force in the dying hours of trade after fresh reports from North Yemen emerged where army attacked protesters. The reports buttressed the Brent curde prices which surged over a percent over $116 per barrel which led to the profit booking as India is dependent on imports of oil to the extent of around 80%. The NSE's 50-share broadly followed index, Nifty closed with miniscule single digit gains below the crucial 5,550 support level while the Bombay Stock Exchange's Sensitive Index, Sensex was little changed at 18,486.45. The broader markets too snapped the day with marginal losses as the BSE's midcap index went home with 0.10% loss while the smallcap index slipped 0.26%. On the BSE sectoral front, the rate sensitive Bankex counter remained the top gainer as it climbed 0.53% after the union cabinet gave its clearance to the Banking Regulation (Amendment) Bill 2011. Bellwether Axis bank surged 1.81% on reports that ICICI Prudential Asset Management's Deputy Managing Director Nilesh Shah is likely to join Axis Bank and will be overseeing the lender's initiatives in the investment banking space. While another rate sensitive Auto pack advanced 0.44% as investors continued buying on the back of higher sales figures by auto companies in February and the government's move to keep the excise duties on automobiles unchanged in the Budget. On the other hand the Capital Goods pocket remained the top laggard in the space as it plummeted 2.06% after shares of heavyweights like L&T and BHEL plunged 3.08% and 1.94% in today's session.
On the global front, majority of the Asian equity indices rallied as investors tracked the gains on Wall Street which soared after unexpected drop in the unemployment benefit claim and good retail sales number. South Korean benchmarks, Seoul Composite remained the top gainer in the space as it went home after surging over one and half a percent points. The European markets too displayed conviction as they traded on a sturdy note with gains of well over half a percent point. On the other hand, the screen trading for US index futures indicated that the Dow could open on a positive note.
Earlier on Dalal Street, the benchmark began with a one percent gap up on the back of jubilant Asian markets which traded with renewed vigor tracking upbeat finish for the overnight US markets. The markets gave up early gains and turned a bit somber in the afternoon session and continued to oscillate in a narrow band with investors treading somewhat cautiously despite a fairly impressive show by markets in Asia and Europe. The frontline indices failed to hold on to the initial momentum and gradually surrendered their gains through the day's trade. Reports of fresh violence from North Yemen in the dying hours of trade erased the miniscule gains with which local bourses traded and eventually finished on an absolutely flat note. Volumes for the markets remained on lower side at over Rs 1.18 lakh crore while the turnover for NSE F&O segment too was low at over Rs 1.03 lakh crore. The market breadth on the BSE was negative as there were 1391 shares on the gaining side against 1484 shares on the losing side while 126 shares remained unchanged.
On Charts: The S&P CNX Nifty may face strong resistance around 5,630 and 5680 while supports will be around 5,460 and 5, 420. However, to continue this optimism bulls must hold, Nifty above the 5480 levels wherein market has a strong resistance at 5620 and cautious optimism continues till it breaks holds above this level.
Finally, the BSE Sensex declined by 3.31 points or 0.02% to settle at 18486.45 while the S&P CNX Nifty advanced 2.55 points or 0.05% to end at 5538.75.
The BSE Sensex touched a high and a low of 18,736.97 and 18,448.69, respectively. The BSE Mid-cap and Small-cap indices declined by 0.10% and 0.26%, respectively.
Tata Power up 2.27%, Hero Honda up 2.15%, Bajaj Auto up 2.00%, HDFC up 1.63% and Reliance Infra up 1.38% were the major gainers on the Sensex.
On the flip side, L&T down 3.08%, Jaiprakash Associates down 2.04%, BHEL down 1.94%, TCS down 1.37%, and Bharti Airtel down 1.19% were the main losers on the index.
According to Finance Ministry, the parliamentary panel is soon expected to give its final recommendations regarding the Insurance amendment Bill, which seeks to enhance foreign direct investment (FDI) limit in the sector to 49% from 26%. "On the insurance amendment Bill, the standing committee of Parliament is expected to give its final recommendation shortly," Department of Economic Affairs Secretary R Gopalan said at an International Institute of Finance event in New Delhi.
The UPA government, which introduced the Insurance bill in Rajya Sabha in the year 2008, is pressing for passage of this bill in the current session of Parliament and has also asked India Inc to persuade opposition on the urgency of introducing such reforms in the financial sector.
Meanwhile, Finance Minister who has taken up the charge of taking up six other bills in the Budget for passage; which includes Insurance Laws (Amendment), Life Insurance Corporation (Amendment), the Revised Pension Fund Regulatory and Development Authority, Banking Laws Amendment, Bill on Factoring, Bill to Amend RDBFI Act and SARFAESI Act, is saying that if these important financial sector legislations are passed, this give will give positive signal to international investors for new investment opportunities.
In another development, the government is also considering the proposal of allowing FDI way of instruments like warrants and partly paid shares into the country. Warrants provide options to subscribers to convert them into shares at a pre-determined price on a future date. Partly paid shares are those instruments where the investor pays an initial amount of a minimum 5% of the value and promises to pay the remaining sum as an when asked by the company.
Though current FDI policy does not allow foreign direct investment through these instruments in Indian companies by foreign entities or NRIs, applications for such requests have been cleared by the Foreign Investment Promotion Board (FIPB) on a case-by-case basis.
The main losers in the BSE sectoral space were Capital Goods (CG) down 2.06%, PSU down 0.25%, Metal down 0.19%, FMCG down 0.18% and Consumer Durables (CD) down 0.18%.
On the other hand, Bankex up 0.53%, Auto up 0.44%, Information Technology (IT) up 0.31%, Oil & Gas up 0.25% and Realty up 0.23% were the gainers in the BSE sectoral space.
The S&P CNX Nifty touched a high and a low of 5608.20 and 5524.10, respectively.
The top gainers on the Nifty were RPower up 6.12%, Tata Power up 2.43%, BPCL up 2.21%, Hero Honda up 1.96% and Bajaj Auto up 1.84%.
The top losers on the index were L&T down 3.05%, JP Associates down 2.50%, Maruti down 1.91%, SAIL down 1.59% and Suzlon down 1.55%.
European markets were trading in the green on Friday. France's CAC 40 gained 0.70%, Germany's DAX rose 0.92% and Britain's FTSE 100 surged by 0.56%.
All the Asian equity indices finished the day's trade in the positive terrain on the last trading day of the week as Wall Street closed with a gain of over one percent overnight after unexpected drop in the unemployment benefit claim and good retail sales number boosted the morale of the investors. Easing concern over oil prices and Middle East unrest also aided the sentiments in the region. Seoul shares rose more than one and a half percent fuelled by the biggest foreign net buying in two months, as optimism over the economic outlook boosted shares in banks viz. Hana Financial Group. Most of the Asian counterparts surged more than one percent.
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