Rush to buy equities a booster shot for bourses

Tags: Stock Market
Equity market benchmarks Sensex and Nifty closed at yet another record high on a day marked by very volatile trading due to monthly expiry of equity derivatives on the National Stock Exchange (NSE).

Heavy rush of foreign investors to buy Indian equities as compared to other emerging markets and expectations of a downward rate revision by the RBI fuelled buy in rate-sensitive stocks.

S&P BSE Sensex touched a high of 22,307.74 in the intra-day trade, later it closed 119.07 points up at 22,214.37, a new lifetime high close.

NSE’s Nifty index also touched a new high of 6,673.95 and later closed 40.35 points up at 6,641.75, also a new lifetime high close.

The Asian markets were mixed with Japan’s Nikkei up 1.01 per cent, Hong Kong’s Hang Seng down 0.24 per cent and China’s Shanghai down 0.83 per cent.

The BSE benchmark Sensex rose more than 200 points intra-day to another record high as March 2014 futures and options (F&O) contracts expired.

Nifty also gained around 70 points to move above 6,665-6,670 levels just an hour before the market closed, in a highly volatile trading session.

Sahaj Agrawal, deputy vice-president, derivatives research, Kotak Securities said, “Nifty gained significantly in the March series. An initial upmove in the index was followed by a period of consolidation. The series ended on a positive note with the index testing 6,650 levels. Rollover in the index is not very aggressive. This could result in profit-booking/consolidation for the April series.”

Shakti Siva, Asia Strategist, Credit Suisse in a media interaction said, “India was relatively better among BRIC countries” as an investment destination.

Foreign institutional investors were net buyers of equities worth Rs 2,191.93 crore topping Rs 1,029.20 crore investment on Wednesday. Domestic institutional investors were yet again net sellers of equities worth Rs 591.83 crore.

Amar Ambani, head of research, IIFL said, "Interest rate-sensitive stocks continue their recent outperformance ahead of the RBI bi-monthly meet as traders punt of a rate cut backed by the steep moderation in inflation over the past few months. The Bank Nifty closed 0.71 per cent up at 12,606. SBI was up 4.27 per cent, PNB gained 3.75 per cent, Bank of Baroda rose 3.49 per cent, Union Bank 2.73 per cent and Canara Bank 2.21 per cent on NSE.

Among the sectoral gainers, BSE Consumer Durables index topped the chart with gains of 1.46 per cent ahead of BSE Oil & Gas index with gains of 1.28 per cent.

Index heavyweight Reliance Industries closed 1.34 per cent up at Rs 902.15.

BSE Bankex closed with a gain of 0.74 per cent after some profit-taking in the last hour of the crucial F&O expiry, ditto for capital goods with gains of 0.69 per cent. BSE Realty and BSE Power gained 1.06 per cent and 0.92 per cent respectively.

Telecom stocks rose on renewed buying. Bharti Airtel was up 3.5 per cent, while Idea Cellular rose 2.5 per cent on NSE.

“Bharti Airtel is likely to be a key beneficiary of strong data momentum and upward bias in voice pricing, adequately supported by a healthy spectrum portfolio,” Amar Ambani said.

Due to F&O expiry day, notional turnover in F&O segment was very high at Rs 3,77,262

crore of which Rs 2,81,866.78 crore was in index options. NSE cash segment turnover was Rs 20,475.95 crore.

In BSE, which follows a mid-month equity derivative expiry, the F&O segment turnover was Rs 20,501.50 crore while the cash market turnover was Rs 2,585.81 crore.

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