Report that Standard & Poor’s may upgrade India’s sovereign rating outlook if the new govt at the Centre tackles the economic issues ailing the country also supported sentiment
Mumbai : Snapping a losing streak across three consecutive sessions, the BSE benchmark Sensex surged by 351 points at 22,628.84 on short covering ahead of the extended weekend. Markets will be closed on Good Friday. Banks, real estate, automobile and power stocks were among the top gainers.
Bulls re-entered the market with a vengeance, with frenzied buying across the sector mainly in high-growth stocks and recently beaten down infotech stocks, as sentiment got a boost from better-than-expected Q4 earning figures reported by sector heavyweight TCS and HCL Tech. Moreover, highly positive statements by Standard & Poor’s that it may upgrade India’s rating outlook if the next government addresses the country’s fiscal and economic challenges, too contributed to the optimism. With a long earnings calendar ahead, packed with big names from across sectors coinciding with general election results, markets may see heavy volatility, a trader said.
“The markets also took note of S&P report, which stated that it may upgrade India’s outlook if the next government (after the general elections) addresses some of the country’s fiscal and economic challenges on priority,” said Jayant Manglik, President, Retail
Distribution, Religare Securities.
Experts said while the current market rally is largely on account of brightening prospects of the Bharatiya Janata Party-led National Democratic Alliance coming to power at the Centre, India’s macro outlook is also improving with current account deficit expected to remain under 2% in 2014-15 (Apr-Mar).
The gain comes after the index tumbled by 438.10 points or 1.93 % in the previous three days.
The 50-issue CNX Nifty of the NSE also bounced back by 104.10 points or 1.56 % to 6,779.40. Mid-tier counters also witnessed strong buying support from retail investors, with BSE-Midcap and BSE-Smallcap indices gaining 1.47 % and 1.43 %, respectively.
Hindalco spurted by 4.40 %, the best gain among Sensex stocks. Tata Motors closely followed at 4.24 %.
“Markets continue to be driven by expectations of a favourable outcome of elections…. Early implementation of important domestic reforms is needed, for markets to sustain and move up from current levels,” said Dipen Shah of Kotak Securities.
The rupee also gained by 8 paise to close at 60.29 against the dollar in line with the surge in stock markets, breaking three-day losing streak.
In the coming week, global markets and Jan-Mar earnings of companies will lend cues to benchmark indices. Trade is expected to be volatile on account of April futures and options contract expiry on Wednesday.
Developments on the political front will also be in focus as the 2014 General Elections are underway. Phase six of Lok Sabha election will take place on Apr 24 and will cover 117 parliamentary constituencies in 11 states and one Union Territory. By-election for assembly seats, one each in Madhya Pradesh and Tamil Nadu, will also be held.
Next week, HDFC Bank, IDFC, UltraTech Cement, Ambuja Cements, Axis Bank, Cairn India, ACC, ICICI Bank, and Maruti Suzuki India will detail earnings for the quarter ended March. On Monday, Reliance Industries will be in focus, as the company will report Jan-Mar earnings on Friday.