Exuberant markets showcase a momentous performance; puff up over 3.5%

Indian benchmarks showcased a remarkable feat of registering biggest intra-day gains in the year as they extended their rally for the third straight day after taking a gargantuan three percent laceration to drift to multi-month low levels on Thursday. It seems like Pranab Mukherjee's progressive and balanced Union Budget 2011 has encouraged the market participants with a trigger to go for the reversal of Indian stock markets which off-late were getting accustomed to daily obliteration. Other factors that underpinned today's over six hundred points surge on the Dalal Street were, better than expected Manufacturing PMI data for February which rose swiftly on the back of strong production growth and substantial inflow of new orders while 32.4% yoy growth in exports for the month of January. Leads from the Asian as well as European markets too remained supportive as crude prices eased despite a violent rebellion in OPEC-member Libya. The NSE's 50-share broadly followed index, Nifty shot up by close to two hundred points and settled well above the crucial 5,500 level while the Bombay Stock Exchange's Sensitive Index, or Sensex accumulated a massive three and half a percent points to finish around the psychological 18,500 mark. The broader markets too remained amid the thick of things but continued their run of underperformance compared to their larger peers. The BSE's midcap index went home with 3.20% gains while the smallcap index could manage 2.38%. On the BSE sectoral front, rate sensitive Auto counter remained the top gainer and rallied over 5.50% as investors in auto companies were relieved to see that the government left the excise tax unchanged in its budget proposal for 2011-12, while their delight got further buttressed by strong monthly sales numbers released by companies like Mahindra & Mahindra, Tata Motors and Maruti Suzuki which skyrocketed 5-9%. Another rate sensitive Banking pack too witnessing robust buying interests as it surged 4.35% on the back of over 5% spurt in majors like ICICI Bank and Axis Bank. Interestingly, there remained no laggard either on the BSE sectoral space or on both of the benchmarks.

On the global front, all the Asian equity indices rallied as investors resorted to hefty buying in undervalued stocks despite the escalating civil upheaval in OPEC-member Libya. Singapore's benchmarks, Straits Times remained the top gainer in the space as it went home after surging close to two percent points. The European markets too displayed conviction as they traded on a firm note with moderate gains with the DAX climbing around 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 the Dalal Street, the benchmark began the day on a sturdy note tracking cues from the Asian markets which climbed after investors turned sanguine on the back of optimistic leads from the overnight US markets and decline in crude prices. After the firm start, there was no stopping for the frontline indices as they gathered  strength to strength in the absence of any profit booking as investors resorted to value buying in most of the beaten down shares. Eventually the bourses snapped the first session of the March month with hefty gains of around three and half a percent. The markets registered volumes of over Rs 1.46 lakh crore while the turnover for NSE F&O segment remained at over Rs 1.30 lakh crore. The market breadth on the BSE was extremely optimistic as there were 2128 shares on the gaining side against 759 shares on the losing side while 81 shares remained unchanged.

Finally, the BSE Sensex sky-rocketed 623.10 points or 3.50 to settle at 18,446.50 while the S&P CNX Nifty zoomed 189.05 points or 3.54% to settle at 5522.30.

The BSE Sensex touched a high and a low of 18,478.68 and 17,964.39, respectively.

The top gainers on the Sensex were M&M up 8.36%, Maruti Suzuki up 7.14%, JP Associates up 7.10%, NTPC up 6.32% and Hindalco Inds up 5.78%; while there were no losers on the index.

The BSE Mid-cap and Small-cap indices surged 3.20% and 2.38%, respectively.

Meanwhile, India's exports for the month of January rose 32.4% to $20.6 billion on a year-on-year (YoY) basis, while imports for the said month jumped 13.1% on YoY basis and stood at $28.6 billion. Exports of all the other sectors other than rice, iron ore, fruits and vegetables registered a healthy growth for the month of January.

Cumulative exports for April-January period grew 29.3% to $184.6 billion and imports for the same period increased 17.6% and stood at $273.6 billion. Exports of engineering goods rose 70% in April-January period reaching $45 billion while gems and jewellery shipments were up 9.3% to $24.5 billion in the same period. Export of petroleum products was also up by 36% to $30 billion.

Further, during the April-January period of the fiscal, imports of machinery grew by 31%, project goods by 45% and electrical goods by 32%. Fertilizers imports were up only 3% but are expected to rise further.

In the meantime, India's trade deficit in January widened to $8 billion compared with $2.6 billion in December and it is expected that the trade deficit could double in three years and cause an unsustainable current account deficit. Hence, the commerce ministry is preparing a strategy paper to double India's exports by the end of 2014.

All the sectoral indices were in the green. Auto up 5.64%, Bankex up 4.35%, Realty up 4.20%, Capital Goods (CG) up 4.19% and Metal up 4.13% were the major gainers.

Manufacturing activity in India accelerated at a swift pace in the month of February, extending the growth trend, as production growth remained strong while the substantial inflow of new orders too underpinned the expansion in manufacturing sector. However, costs of raw materials and other inputs faced by factories, jumped as towering inflation played the spoilsport.

According to a survey based on around 500 companies across India, Markit / HSBC manufacturing purchasing managers' index or the PMI climbed to 57.9 from 56.8 in January, a reading above the 50 mark signifies expansion in the activity. Growth was also witnessed in the new orders index which advanced for the three successive months to attain a seven month crest of 62.4 in February against 60.7 in the previous month.

Rising input costs, which grew at the fastest pace since the survey began in 2005, remains the biggest concern for the manufacturers as increasing raw material prices including that for metals like copper, steel etc., adds upward pressure on output prices.

The S&P CNX Nifty touched a high and a low of 5533.05 and 5373.55, respectively.

The top gainers on the Nifty were M&M up 8.81%, JP Associates up 7.97%, Suzlon Energy up 7.18%, Maruti Suzuki up 7.02% and Axis Bank up 6.52%; while there were no losers on the index.

All the Asian equity indices finished the day's trade in the positive terrain as oil price eased despite a violent rebellion in OPEC-member Libya. The crude oil hovered around $97 per barrel as traders remained cautious whether political upheaval in Libya will spread to other oil-rich countries. Chinese Shanghai ended with a gain of over half a percent as investors pulled money out of physical real estate and shifted funds to equities. Moreover, Japanese Nikkei surged more than one percent after fresh data showed the country's jobless rate held steady in January, while stock markets in South Korea remained shut today on account of a public holiday.

Shanghai Composite jumped 14.80 points or 0.51% to 2,919.85, Hang Seng gained 58.40 points or 0.25% to 23,396.42, Jakarta Composite surged 42.27 points or 1.22% to 3,512.62, KLSE Composite rose 10.99 points or 0.74% to 1,502.24, Nikkei 225 soared 129.94 points or 1.22% to 10,754.03, Straits Times added 57.09 points or 1.90% to 3,067.60 and Taiwan Weighted was up by 127.91 points or 1.49% to 8,727.56.

European markets were trading in the green on Tuesday. CAC-40 gained 0.39%, DAX surged 0.70% and FTSE added 0.33%.

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