 "Broader markets outperform; Sensex tops 30,000, Nifty hits 9,000")
Markets gained for the fourth straight week with both the benchmark shares indices Sensex and Nifty scaling new lifetime peaks amid a growth-oriented Budget, while a surprise rate cut by the Reserve Bank of India (RBI) also boosted sentiment.
The benchmark BSE Sensex gained approximately 1.46 per cent to mark its all-time high of 30,024.74, surpassing the psychologically important 30,000-level for the first time and the 50-share Nifty rose around 1.37 per cent to mark a record high of 9,119.20 on Wednesday.
In the truncated week to March 5, the 30-share Sensex ended up 87.45 points or 0.3 per cent at 29,449 and the 50-share Nifty ended up 36 points or 0.4 per cent at 8,938. Meanwhile, broader indices outperformed the benchmark indices with the BSE Mid-cap Index rising 2.17 per cent and the BSE Small-cap Index gaining 1.69 per cent. Six of the 12 BSE sectoral indices ended in green.
Foreign institutional investors were net buyers in Indian equities worth Rs 4,064 crore for the week, as per provisional stock exchange data.
Events that shaped the week
The RBI surprised the markets on Wednesday with an early post-Budget repo rate cut of 25 bps (basis points) to 7.5 per cent from 7.75 per cent, which was again outside of central bank's scheduled policy review meetings. On the macroeconomic front, the HSBC Manufacturing Purchasing Managers' Index, compiled by Markit fell for the second consecutive month, to 51.2 in February from 52.9 in January implying that manufacturing activity expanded at its slowest pace in five months in February on slowdown in new orders dragging overall output.
The annual growth in production of the eight key infrastructure industries declined to at least a year’s low of 1.8 per cent in January compared to 3.7 per cent in the same month last year and is likely to have a negative impact on the industrial growth numbers for the month, as these industries have a weight of 38 per cent in the Index of Industrial Production (IIP).
The benchmark BSE Sensex gained approximately 1.46 per cent to mark its all-time high of 30,024.74, surpassing the psychologically important 30,000-level for the first time and the 50-share Nifty rose around 1.37 per cent to mark a record high of 9,119.20 on Wednesday.
In the truncated week to March 5, the 30-share Sensex ended up 87.45 points or 0.3 per cent at 29,449 and the 50-share Nifty ended up 36 points or 0.4 per cent at 8,938. Meanwhile, broader indices outperformed the benchmark indices with the BSE Mid-cap Index rising 2.17 per cent and the BSE Small-cap Index gaining 1.69 per cent. Six of the 12 BSE sectoral indices ended in green.
Foreign institutional investors were net buyers in Indian equities worth Rs 4,064 crore for the week, as per provisional stock exchange data.
Events that shaped the week
The RBI surprised the markets on Wednesday with an early post-Budget repo rate cut of 25 bps (basis points) to 7.5 per cent from 7.75 per cent, which was again outside of central bank's scheduled policy review meetings. On the macroeconomic front, the HSBC Manufacturing Purchasing Managers' Index, compiled by Markit fell for the second consecutive month, to 51.2 in February from 52.9 in January implying that manufacturing activity expanded at its slowest pace in five months in February on slowdown in new orders dragging overall output.
The annual growth in production of the eight key infrastructure industries declined to at least a year’s low of 1.8 per cent in January compared to 3.7 per cent in the same month last year and is likely to have a negative impact on the industrial growth numbers for the month, as these industries have a weight of 38 per cent in the Index of Industrial Production (IIP).
Shares of mid-cap companies recorded sharp gains with the BSE Mid-cap Index hitting a record closing high of 10,952.93 levels on Monday. Top gainers include Alstom T&D (15 per cent), AstraZenca Pharma (15 per cent), BF Utilities (12 per cent), Dewan Housing (13 per cent), eClerx Services (19 per cent), Indoco Remedies (20 per cent), JP Associates (13 per cent).
Shares of cement, construction and capital goods surged after the government provided a thrust on the infrastructure sector and sharply increased the government's capital expenditure for 2015-16 in Union Budget. L&T, BHEL, ACC, Ambuja Cements, Ultratech Cements, NBCC, NCC gained up to 22 per cent.
Private lenders rose on the Budget proposal, stating that the fungibility of FII and FDI would allow private sector lenders to raise additional foreign capital. RBI rate cut boosted the sentiments. Axis Bank, HDFC Bank, ICICI Bank gained up to 2 per cent.
Cigarette maker ITC lost 4 per cent after the finance minister proposed to hike excise duty on cigarettes to 25 per cent for under 65 mm category, and 15 per cent for other categories in the Budget.
Sun Pharmaceuticals, India’s largest drug maker, galloped by 14 per cent on approval granted to Sun Pharma Advanced Research Company (SPARC) by US FDA for an antiepileptic drug.
Reliance Industries climbed 2 per cent after LIC increased its stake in the company by 2.09 per cent. Shares of telecom companies ended lower due to investor worries that buying spectrum at high rates could impact margins. Bharti Airtel lost 3 per cent, Idea Cellular dropped 2 per cent and Reliance Communication slipped 3 per cent. Auto shares declined across the bourses on weak sales numbers. Bajaj Auto, M&M, Hero Motocorp and Tata Motors slipped between 1-4 per cent.
Week ahead
The January industrial production data and February combined consumer price data (rural/urban) will be announced on Thursday and Friday, respectively, and these would be important data points to watch out for, going into the next week. Trend in global markets, the movement of rupee against the dollar, crude oil price movement and developments in the ongoing Budget session of Parliament will hold key triggers for domestic markets in the week ahead.
The initial public offering from Adlabs Entertainment in the price band of Rs 221-230 opens on March 10 and closes on March 12.