Post-budget announcements, RBI rate cut cheers markets

Mumbai, March 7: Post-budget announcements and an unexpected lending rates cut by the apex bank, led a benchmark index of Indian equities markets to gain 87.45 points or 0.29 percent during the weekly trade ended March 5.

For the weekly trade ended March 5, the benchmark 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE) closed at 29,448.95 points, up 87.45 point or 0.29 percent.

The Indian markets were closed on March 6, Friday on account of Holi.

The barometer index had ended the previous week's trade at 29,361.50 points (Feb 28).

The Indian stock markets were opened on the budget day after the market regulator Securities and Exchange Board of India (SEBI) gave its nod to allow trading on Feb 28.

For the previous weekly trade ended Feb 28, the benchmark Sensex was up 130.09 points or 0.44 percent.

The barometer index closed at 29,231.41 points Feb 20.

The market's had gained nearly 400 points to touch a new high of 30,024.74 points on March 4, Wednesday after India's central bank, the Reserve Bank of India, cut its key lending rates by 25 basis points.

Market analysts said the truncated weekly trade ended on a flat note despite the initial euphoria over the unexpected rate cut announced by the RBI and the post-budget rally.

"Markets ended last week's trade on a flat note despite the initial euphoria over the unexpected RBI rate cut. There were concerns over the ECB (European Central Bank) meet and the data that was supposed to come out of the US," Dipen Shah, head, private client group research, Kotak Securities told IANS.

"In the coming week markets will react to the US data as well as the parliaments on going budget session. Focus will be on to see the government's ability to pass key bills in the on going session."

According to Vinod Nair, head, fundamental research, Geojit BNP Paribas Financial Services, the market has shifted its focus to look at measures to be taken post the Budget.

"This session will gain more relevance as key bills are likely to come-up for discussion which can add more teeth to proposals like 'Make in India'," Nair said.

"The ongoing session is also expected to bring some clarity on budget proposals like REITs (real estate investment trust) and bank holding structure."

Nair added that as all the post-budget measures gets achieved over the medium term can increase the earnings growth in respective sectors by FY16-17.

"Hence over the time we can expect sector shift towards infrastructure, capital goods, engineering and electricals," Nair said.

On the global front, the Indian markets are expected to react on the sharp increase in the U.S. non-farm payroll data for January and a slow rebound in oil prices.

The U.S. non-farm payrolls rose 295,000 jobs last month. The unemployment rate fell to 5.5 percent from 5.7 percent in January.

The Indian markets were anxious as rapid increases in non-farm payroll data might lead to an increase in inflation.

This can make the US Federal Reserve to raise interest rates sooner than previously expected. With higher interest rates the foreign institutional investors (FIIs) will be lead away from the emerging markets such as India.

"In the coming week the Indian market will be cautious as the US non-farm payroll data has gone up rapidly. This might lead to a sooner than expected rate rise in the US," Devendra Nevgi, chief executive, ZyFin Advisors told IANS.

On Friday, S&P BSE Sensex closed the day's trade at 29,448.95 points, up 68.22 points or 0.23 percent from the previous day's close at 29,380.73 points.

The Sensex had touched a high of 29,518.32 points and a low of 29,162.47 points in the intra-day trade.

The major Sensex gainers on Friday were: Sun Pharma, up 3.24 percent at Rs.1,037.35; Hindustan Unilever, up 2.49 percent at Rs.939; HDFC Bank, up 1.87 percent at Rs.1,085.05; Cipla, up 1.81 percent at Rs.737.85; and HDFC, up 1.75 percent at Rs.1,389.05.

The losers were: Hindalco, down 3.36 percent at Rs.147.90; Coal India, down 2.19 percent at Rs.363.95; Tata Consultancy Services (TCS), down 1.72 percent at Rs.2,696.35; Tata Steel, down 1.28 percent at Rs.343.40; and Sesa Sterlite, down 1.08 percent at Rs.210.10.

IANS