The Indian markets remained in jubilant mood for the second consecutive day with benchmarks gaining over one percent each in last session, there were lots of short covering and the gains remained broad based, though the PSU oil marketing companies remained a bit under pressure. Today the start is likely to be good with global cues indicating for a positive start, fund buying in realty, banking and pharma may continue for yet another day, while the latest governments’ proposal of lowering taxes in some sectors may continue to support the stocks move further high. There is a new listing of one of India’s leading women’s innerwear ' Lovable Lingerie' today that too is likely to keep the markets buzzing. The issue price has been fixed at Rs 205, at the higher end of price band of Rs 195-205 a share. The issue got overwhelming response and was subscribed around 35 times raising around Rs 93 crore.
In a latest development Capital market regulator, the Securities and Exchange Board of India (SEBI) has ordered restriction on transmitting ‘unauthenticated news’ by brokers and wealth managers on blogs and mobile phones. The Advice from the SEBI also says that broking firms will have to ensure that staffs don’t circulate rumours, or unverified information, obtained from client, industry or any other sources. They will also have to restrict their employees from accessing blogs and messenger sites.
The US markets closed modestly higher as the Japanese worries along with report that new single-family homes plunged to the lowest on record in February capped the gains. Most of the Asian markets have made a positive start though the Japanese Nikkei is trading marginally lower on government estimation that the direct damage from a deadly earthquake and tsunami that struck the country’s northeast this month was at as much as $310 billion.
Back home, Indian benchmarks carried forward their northbound journey for yet another session on Wednesday, as optimistic cues from across the globe helped the indices to surpass crucial support levels of 5,400 and 18,000 and move in higher trajectories. Sentiments remained sanguine right from the start of trade as tabling of the banking sector amendment bill and the Constitution Amendment Bill in parliament on Tuesday buttressed the chances of a rebound for the domestic indices. The discouraging leads from Japanese markets which plunged over one and half a percent too went unnoticed amid reports that billionaire investor Warren Buffet intends to use the huge cash pile of his flagship firm Berkshire Hathaway to acquire companies in India, an investment destination Buffett feels is too big to be called an emerging market. Meanwhile, spiraling crude oil showed little signs of dying down as they toped $105 a barrel amid the ongoing turmoil in Libya and other parts of the Middle East, thereby raising skepticism over the advance on fears that the market lacks clear direction amid mounting global and local uncertainties. The NSE’s 50-share broadly followed index Nifty, settled just below the crucial 5,500 support level while Bombay Stock Exchange’s Sensitive Index, Sensex garnered a double century to regain the psychological 18,200 mark. The broader markets too remained amid the thick of the things but failed to outperform their larger peers. Rate sensitive banking index soared after Finance Minister Pranab Mukherjee proposed changes to tax and banking laws. The reform bill seeks to make voting rights for bank shareholders proportional to their holdings, a move believed to boost the attractiveness of state-owned banks for investors. Earlier on Dalal Street, the benchmarks had slipped to their intra-day low levels in the initial moments of trade tracking weak cues from the Wall Street and towering crude oil prices on concerns that conflicts in Middle East could pinch oil supplies. However the frontline indices staged a strong and stable pullback thereafter led by gains in banking, FMCG, healthcare and metal stocks. The indices gradually gained traction and sailed beyond the crucial support levels of 5,450 and 18,200 in the absence of any bouts of profit booking. Sustained buying interests across the board through the session helped the bourses eventually snap the day’s trade around the high point of the day with over a percent gains. Finally, the BSE Sensex surged by 217.86 points or 1.21% to settle at 18,206.16 while the S&P CNX Nifty climbed 66.40 points or 1.23% to end at 5,480.25.
US markets closed modestly higher on Wednesday, worries of Japanese crisis was still looming and the stocks remained lower for most of the day however a spurt in energy stocks was seen after Energy Department report showed that gasoline consumption continues to grow despite sharp price increases at the pump, it shows that higher fuel cost has not made much impact. Meanwhile the Japanese government estimated that rebuilding costs for the earthquake could be as high as $300 billion, dragging the economy growth by 0.5 percent this year due to the widespread devastation. Also there was a disappointment from the housing front; sales of new single-family homes plunged to the lowest on record in February.
Commerce Department reported that home sales fell 17 percent to 250,000, well below the 700,000 rate being expected, it was the third straight monthly drop. That decline in activity is weighing down the construction industry, which in the past has fueled economic recoveries.
The Dow Jones industrial average gained 67.39 points, or 0.56 percent, to close at 12,086.02.The Standard & Poor's 500 index edged up 3.77 points, or 0.29 percent, to close at 1,297.54. The Nasdaq composite index rose 14.43, or 0.54 percent, to 2,698.30.
Crude oil futures moved higher on Wednesday as Middle East crisis aggravated after attacks on Israel, unrest in Yemen and other neighbouring countries. Falling gasoline stocks in the United States too supported the prices to touch two and half year peak above $105 a barrel at settlement. US gasoline inventories fell 5.32 million barrels in the week to March 18. The stocks fell in the first three weeks in March, which was the biggest decline for the period since 1990 even though refiners boosted utilization rates by 0.7 percentage point.
Meanwhile, Yemen's president offered to step down by the end of the year in a bid to appease opposition groups demanding his resignation, but they showed no sign of easing up on efforts to force him out.
Benchmark crude for May delivery rose 78 cents, or 0.74 percent, to settle at $105.75 a barrel, after trading in a range of $104.38 to $106.34 on the New York Mercantile Exchange. In London, Brent May crude futures pared losses and settled down 15 cents at $115.55 on the ICE.
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