Indian frontline indices went through a rollercoaster ride on the settlement day of March series futures and options contracts as sentiments turned highly volatile in the second half of the session. The seven successive days of winning streak got extended for yet another day, thanks to the late short covering rally after the indices drifted to the red terrain on the back of hefty position squaring in rate sensitive and healthcare counters. The rebound in international crude prices by around a percent on the back of the ongoing turbulences in Libya and neighboring nations too weighed on the local sentiments. However, the rally in software and technology stocks capped the downside risks for the markets while the ease in inflation numbers to single digits during the week-ended March 19 after showing an unexpected increase in the previous week also supported the investor mood. The NSE's 50-share broadly followed index Nifty, settled a tad below the crucial 5,850 support level, after surging around a percent while Bombay Stock Exchange's Sensitive Index, or Sensex garnered over one hundred fifty points and closed just below the psychological 19,450 level. In the broader markets especially the mid cap stocks after a tremendous rally in last session showed some sign of fatigue but managed to hold in green. The BSE's Midcap and Smallcap indices went home with trivial gains of 0.29% and 0.21% respectively, underperforming their larger peers by quite a margin. On the sectoral front, The IT pocket grabbed the top gainer's position after garnering 1.92% on hopes that upbeat results and outlooks last week from global technology majors Oracle Corp and Accenture bode well for resurgence in tech spending. Heavyweight TCS soared 2.71%, being the top gainer on the index while stocks like Infosys and Wipro too gained 2.10% and 1.15% respectively. The FMCG counter too remained amid the thick of things and advanced 1.67% on the back of around 2.50% gains in Marico and Hindustan Unilever each. Rally in index bellwether Reliance Industries in the last too lifted local mood as it amassed almost one and half a percentage points. The paper stocks continued to remain in jubilant mood while AP Paper Mills once again got locked in upper circuit other paper stocks too traded higher. On the other hand, the Banking sector languished at the bottom of the table after slipping 0.70% as majors like SBI and Indusind Bank plummeted 3.19% and 4.87% respectively. While the Auto stocks also slipped after Maharashtra state government reportedly withdrew a sales tax exemption offered to several mega projects in state's new automobile hub Chakan-Talegaon. The incentives were offered to woo big investments to Maharashtra; with the roll back the automobile industry has expressed its concern that the government has changed the rules after the works got started.
On the global front, all the Asian equity indices barring Shanghai Composite finished the day's trade in the positive terrain on Thursday as Wall Street closed higher overnight on the back of strong jobs data from the United States that boosted hopes for the global recovery. The European markets though traded on a subdued note as France's CAC, Germany's DAX and Britain's FTSE exhibited negative trends. On the other hand, the screen trading for US index futures indicated that the Dow could open in the flat zone.
Earlier on Dalal Street, the benchmark got off to a steady start in the morning trade tracking optimistic leads from overnight Wall Street which closed higher led by good jobs data and rally in Telecom companies on reports that private companies are continuing to add workers and planned layoffs at US firms fell in March. Thereafter, the indices gradually kept gathering momentum through the first half of day's trade as they went on to touch intraday highs of 19,575.16 and 5,872.00. However hefty bouts of profit booking in counters like Bank, Auto and Realty dragged the indices even below the neutral line that too just half an hour before the closing bell. But what followed in the final moments of trade was an unexpected short covering rally that helped the bourses convalesce most of the losses and snap eighth straight session in the positive terrain settling a tad below the psychological levels of 5,850 and 19,450. The March F&O series expired on a strong note with Sensex and Nifty gaining about 8.7% and 9% respectively from the previous series. On the expected lines, markets registered extremely large volumes of over Rs 2.77 lakh crore while the turnover for NSE F&O segment too remained at the higher side at over Rs 2.54 lakh crore on the March series F&O settlement day. Market breadth turned negative by the end as there were 1444 shares on the gaining side against 1412 shares on the losing side while 95 shares remained unchanged.
Finally, the BSE Sensex surged by 155.04 points or 0.80% to settle at 19,445.22 while the S&P CNX Nifty climbed 46.10 points or 0.80% to end at 5,833.75.
The BSE Sensex touched a high and a low of 19,575.16 and 19,284.35 respectively. The BSE Mid-cap and Small-cap indices gained by 0.29% and 0.21%, respectively.
Bajaj Auto up 2.90%, ONGC up 2.76%, TCS up 2.71%, Hindustan Unilever up 2.50% and Hero Honda up 2.23% were the major gainers on the Sensex.
On the flip side, SBI down 3.19%, Cipla down 2.01%, Reliance Communication down 2.00%, Mahindra & Mahindra down 1.61% and Maruti Suzuki down 0.95% were the Major losers on the index.
Despite the Indian government looking to further ease the regulations governing the foreign direct investment (FDI), the direct capital inflows into the country declined for a second consecutive month in February to $1.2 billion. The figure is about 30% below the FDI worth $1.7 billion received in the same month a year ago.
Various agencies have been raising concerns over declining FDI amidst a widening current account deficit (CAD). Cumulative FDI into India during the first 11-months of the current fiscal year has declined by 25% to $18.3 billion, putting pressure on the government to fine-tune its policies in order to attract greater amount of overseas investment. The country had received FDI worth $24.6 billion during the corresponding period of last financial year.
The Reserve Bank of India (RBI) had said recently that it preferred greater amount of long-term and stable flows through FDI into the country rather than often short-term oriented foreign institutional investment (FII) to bridge the current account deficit (CAD) that the country faces. The Governor of the central bank D Subbarao said that while inflow of foreign capital was welcome for bridging the CAD, the RBI would always prefer the stable inflows in terms of FDI, which comes with a long term commitment, rather than volatile portfolio inflows which can reverse in case of even a small change in either domestic of global economic scenario.
The decline in FDI in India has been rather against the trend seen in other developing countries. A recent report by the United Nations Conference on Trade and Development (UNCTAD) had observed that in the last calendar year, emerging market economies (EMEs) attracted more foreign investment than developed countries for the first time in history as the global economic engine shifts to the EMEs. Despite this, the FDI into India has seen a decline.
Meanwhile, the government is set to release a revised FDI policy circular later in the day hoping to attract greater amount of foreign funds in the next financial year beginning April 1. Among other modifications, the third edition of the Consolidated FDI Policy Circular (CFPC) may contain guidelines on domestic companies issuing shares to foreign entities for considerations other than cash, a move aimed at checking possible misuse of FDI policy to engage in money laundering.
IT up 1.92%, FMCG up 1.67%, Oil & Gas up 1.44%, TECk up 1.42%, and Metal up 0.98% were the major gainers in the BSE sectoral space. Bankex down 0.70%, Health Care down 0.35%, CD down 0.22%, Capital Goods down 0.16 were the loser in the BSE sectoral space.
In a positive news for India's Information Technology (IT) industry, the global IT spending is all set to increase at a faster pace as global economy recovers from the slowdown. According to the latest estimates prepared by the Research and consultancy firm Gartner, IT spending worldwide is projected to touch $3.6 trillion in the current calendar year.
'Worldwide IT spending is forecast to total $3.6 trillion in 2011, a 5.6% increase from $3.4 trillion in 2010,' Gartner said. The forecast has been revised up from a 5.1% estimate given earlier, and reflects the overall improvement in global economy that is giving more confidence to business worldwide. This will be a second consecutive year in significant increase in IT spending after a decline seen in 2008.
India is a major player in global IT market, particularly in the IT services segment. The biggest outsourcing destination in world will benefit directly from the increased IT spending budgets worldwide. In fact, most of the India's top line IT players have shown good buoyancy in revenues in recent quarters hinting the improving global economy was bringing the IT services back towards a high growth trajectory.
The global financial crisis that started in late 2008 with crash of the US banking major Lehman Brothers had clouded the IT industry's outlook with most of the clients scrapping discretionary spending and IT budget getting stagnated or even contracted as an austerity derive was set in motion by business around the world to counter a sudden drop in demand.
However, over last 2-3 quarters, most tech companies have reported that IT spending was again beginning to increase and discretionary spending was also back in picture. Gartner said that while there could be some impact from the disaster in Japan, the current evaluation was that it will not be significant to alter the IT spending plans of major companies. The Indian IT industry is anyway not much worried from the Japan crisis as in terms of volumes, the US and EU are main markets for Indian IT vendors while only a small share of total business comes from Japan.
The S&P CNX Nifty touched a high and a low of 5,872.00 and 5,778.65 respectively.
The top gainers on the Nifty were Reliance Power up 5.25%, Reliance Infrastructure up 3.98%, DLF up 3.15%, Bajaj Auto up 3.02% and ITC up 2.90%.
The top losers on the index were SBIN down 3.29%, Ambuja Cement down 2.50%, RCOM down 1.82%, M&M down 1.68% and Sun Pharma down 1.51%.
European markets were trading in red on Thursday. France's CAC 40 drops by 0.44%, Germany's DAX declined by 0.02% and Britain's FTSE 100 falls by 0.16%.
All the Asian equity indices barring Shanghai Composite finished the day's trade in the positive terrain on Thursday as Wall Street closed higher overnight on the back of strong jobs data from the United States that boosted hopes for the global recovery. Japanese Nikkei jumped about half a percent today as weaker yen boosted exporters. However, Chinese index finished with a cut of about one percent as investors booked their profits in heavyweight stocks after recent gains and amid speculation of another interest rate hike over the weekend
No comments:
Post a Comment