Equity benchmarks closed flat for the week as investors decided to take some cash off the table after a prolonged winning streak. The 30-share BSE Sensex gained 19.53 points to 22359.50 while the 50-share NSE Nifty fell 1.55 points to 6694.35. Both benchmarks saw record highs during the week - 22620.65 on Sensex and 6776.75 on Nifty. Market players now expect the market to consolidate a bit even as the mood remains positive. Many still feel the Nifty could surpass 7000 before the election results in mid-May, amid intermittent corrections. They see every correction till the poll results as a buying opportunity.
Expectations of a reformist government post elections and an impending economic recovery have been the key drivers of the current rally. "The market does not move in straight line and there would be volatility as we go along. But I believe the overall sentiment remains positive and the market would remain in a buoyant mood in the near-term,” Prabodh Agarwal of IIFL said. According to him, India may see a disproportionately higher share of FII inflows this year. In March alone, foreign funds net bought Rs 22,351.70 crore of equities . For the calendar so far, they have been net buyers of Rs 27,000 crore.
The big event of the week was the monetary policy announced by the Reserve Bank of India. As widely expected, the RBI kept policy rates unchanged and hinted that further hikes were unlikely in the near future. However, market is still worried about inflation; reasons being a possible el-nino effect on food inflation, increase in minimum support prices, changes in administered prices of fuel, fertilisers, etc, and the geopolitical tensions.“If some of these factors play out, interest rate reductions will likely be further delayed. Although the policy rates are unlikely to come down in current fiscal, we are hopeful that the need for raising rates wouldn’t arise as well,” Dipen Shah, Head- Private Client Group Research, Kotak Securities said. Monthly auto sales numbers did not give much cause for cheer. Commercial vehicle sales of the companies like Tata Motors and Ashok Leyland continued to be subdued but there was slight improvement in car sales due to excise cut and better growth in two-wheeler sales.
After a long wait, the RBI gave in-principle nod for banking license to IDFC and Bandhan Financial Services after getting go ahead from Election Commission. This in-principle bank license approval is valid for 18 months. The companies, which did not get bank license in this round, can reapply, the RBI said. LIC Housing Finance, IFCI, L&T Finance Holdings, Reliance Capital, Shriram Capital etc were among the 25 applicants. L&T Finance and IFCI fell 6 percent. India March HSBC Services PMI fell to three-month low at 47.5 as against 48.8 in previous month, pointing to a weakening in activity and businesses flows in the month gone by. In the corporate developments, GMR Infrastructure said its subsidiary GMR Energy has filed draft red herring prospectus with Sebi on March 28 for IPO.
Top telecom operator Bharti Airtel said it became the second largest operator in Nigeria by subscribers’ base that was 2.629 crore in February. Agrochemical company UPL has sold entire 50 percent stake in Brazil JV Sipcam UPL for Rs 351 crore. Oil marketing company IOC has cut petrol prices by 75 paise per litre excluding taxes. In sectoral indices, Bank Nifty fell more than 1.5 percent on profit booking. BSE FMCG Index was down 2 percent and Capital Goods fell over a percent but Realty Index hogged the limelight, rising nearly 7 percent followed by Metals with 4.4 percent and Pharma 3.2 percent. Among gainers, Jindal Steel & Power topped the buying list with 6.7 percent gains. Tata Steel, Hindalco Industries, Cipla, Bank of Baroda, Lupin, M&M, Reliance Industries, Cairn India, HDFC and Tata Motors were up 2-5 percent. Sesa Sterlite gained nearly 4 percent. Rating agency Moody's has raised Vedanta Resources rating outlook to stable from negative. However, BHEL was the top loser, falling 8 percent. GAIL, ITC, Tata Power, BPCL, Kotak Mahindra Bank, HDFC Bank and Axis Bank were prominent losers with 2-5 percent decline.
The broader markets outperformed benchmarks with the CNX Midcap rising 1.5 percent and BSE Small Cap Index 3.8 percent. Among midcaps, HDIL surged 29 percent as Kotak Securities bought 2.13 million shares of the company at Rs 51.56 apiece on March 27. India’s largest turbine maker Suzlon Energy gained 27 percent as reports suggest that the company is looking raise about 600 million euros (USD 822 million) through an initial public offering of its German unit Senvion. Realty major Unitech was up 26 percent as sources told CNBC-TV18 that the company and UK company Unitech Corporate Parks will sell six Indian assets for upto Rs 12,500 crore. Ranbaxy Labs gained 26.3 percent followed by HCL Infosystems with 20 percent and Indiabulls Real Estate 15 percent. Bajaj Hindusthan climbed 20 percent. Sugar prices have risen 24 percent in three weeks. Analysts said concerns over el-nino effect going ahead and increase in buying by stockists maybe triggering the upmove. For the week ahead, Lok Sabha elections will begin next week. Polls will be held in six constituencies in two states - Assam and Tripura.
The big event of the week was the monetary policy announced by the Reserve Bank of India. As widely expected, the RBI kept policy rates unchanged and hinted that further hikes were unlikely in the near future. However, market is still worried about inflation; reasons being a possible el-nino effect on food inflation, increase in minimum support prices, changes in administered prices of fuel, fertilisers, etc, and the geopolitical tensions.“If some of these factors play out, interest rate reductions will likely be further delayed. Although the policy rates are unlikely to come down in current fiscal, we are hopeful that the need for raising rates wouldn’t arise as well,” Dipen Shah, Head- Private Client Group Research, Kotak Securities said. Monthly auto sales numbers did not give much cause for cheer. Commercial vehicle sales of the companies like Tata Motors and Ashok Leyland continued to be subdued but there was slight improvement in car sales due to excise cut and better growth in two-wheeler sales.
After a long wait, the RBI gave in-principle nod for banking license to IDFC and Bandhan Financial Services after getting go ahead from Election Commission. This in-principle bank license approval is valid for 18 months. The companies, which did not get bank license in this round, can reapply, the RBI said. LIC Housing Finance, IFCI, L&T Finance Holdings, Reliance Capital, Shriram Capital etc were among the 25 applicants. L&T Finance and IFCI fell 6 percent. India March HSBC Services PMI fell to three-month low at 47.5 as against 48.8 in previous month, pointing to a weakening in activity and businesses flows in the month gone by. In the corporate developments, GMR Infrastructure said its subsidiary GMR Energy has filed draft red herring prospectus with Sebi on March 28 for IPO.
Top telecom operator Bharti Airtel said it became the second largest operator in Nigeria by subscribers’ base that was 2.629 crore in February. Agrochemical company UPL has sold entire 50 percent stake in Brazil JV Sipcam UPL for Rs 351 crore. Oil marketing company IOC has cut petrol prices by 75 paise per litre excluding taxes. In sectoral indices, Bank Nifty fell more than 1.5 percent on profit booking. BSE FMCG Index was down 2 percent and Capital Goods fell over a percent but Realty Index hogged the limelight, rising nearly 7 percent followed by Metals with 4.4 percent and Pharma 3.2 percent. Among gainers, Jindal Steel & Power topped the buying list with 6.7 percent gains. Tata Steel, Hindalco Industries, Cipla, Bank of Baroda, Lupin, M&M, Reliance Industries, Cairn India, HDFC and Tata Motors were up 2-5 percent. Sesa Sterlite gained nearly 4 percent. Rating agency Moody's has raised Vedanta Resources rating outlook to stable from negative. However, BHEL was the top loser, falling 8 percent. GAIL, ITC, Tata Power, BPCL, Kotak Mahindra Bank, HDFC Bank and Axis Bank were prominent losers with 2-5 percent decline.
The broader markets outperformed benchmarks with the CNX Midcap rising 1.5 percent and BSE Small Cap Index 3.8 percent. Among midcaps, HDIL surged 29 percent as Kotak Securities bought 2.13 million shares of the company at Rs 51.56 apiece on March 27. India’s largest turbine maker Suzlon Energy gained 27 percent as reports suggest that the company is looking raise about 600 million euros (USD 822 million) through an initial public offering of its German unit Senvion. Realty major Unitech was up 26 percent as sources told CNBC-TV18 that the company and UK company Unitech Corporate Parks will sell six Indian assets for upto Rs 12,500 crore. Ranbaxy Labs gained 26.3 percent followed by HCL Infosystems with 20 percent and Indiabulls Real Estate 15 percent. Bajaj Hindusthan climbed 20 percent. Sugar prices have risen 24 percent in three weeks. Analysts said concerns over el-nino effect going ahead and increase in buying by stockists maybe triggering the upmove. For the week ahead, Lok Sabha elections will begin next week. Polls will be held in six constituencies in two states - Assam and Tripura.
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