Markets rally ahead of key economic events

The markets consistently witnessed firm trades during the day to end the trading session on a strong note led by index heavyweight Reliance Industries. The BSE Sensex ended higher by 226 points at 17,814 and the S&P CNX Nifty ended at 5,430, up 70 points.

The Sensex gained as traders remained positive on the advance taxes that domestic companies are due to file by March 15. Data on advance tax is expected to hint at improved corporate earnings for Q4 March 2012. Further, on Wednesday, March 14, Minister for Railways, Dinesh Trivedi would be presenting the Railway Budget for the financial year 2012-2013.

According to reports, industry experts hope that the railway Budget will reduce export levy on iron ore fines which would, in turn, push up exports. Given the financial condition of railways, this Rail Budget is also likely to seek a two-year moratorium on paying dividend to the government.

Earlier in the day, the BSE benchmark index had touched the day's high at 17,843 and the day's low at 17,680.

In Asia, Japan's Nikkei share average eked out modest gains on Tuesday despite giving up an earlier increase to above the key 10,000 mark after the Bank of Japan held off on easing monetary policy following a two-day policy meeting. The index ended marginally higher by 0.09% at 9,899. The Shanghai Composite index ended marginally lower by 0.19%, while the Hang Seng index ended higher by 0.97%.

European markets are broadly higher today with shares in Germany leading the region, on hopes that German and US data will support rising hopes of an economic recovery ahead of a monetary policy statement by the Federal Reserve. At 1600 hours, the DAX was up 1.04% while France's CAC 40 was up 0.84% and London's FTSE 100 was up 0.74%.

Back home, Ranak Merchant, Technical Analyst - Strategies, Sushil Financial Services said, "Considering the events lined up in the current week, we do expect volatility to remain high. The outcome of the events would be the major driving factor for the medium term. On the upside 5,491 appears to be a resistance point for the Nifty for the current week." The bourses will further take cues from the Reserve Bank of India (RBI) policy meet and the government budget, due later this week.

Buying was visible across all boards. BSE Metal, Oil & Gas, Realty and Capital Goods indices, up 2-3% each, led the gains.

Realty stocks extended gains in today's trading session, on expectations that the RBI will continue cutting interest rates in the coming months to support the slowing economy. Lower interest rates are expected to help revive demand for properties. HDIL, Sobha Developers, Godrej Properties, Anant Raj Industries and DLF gained up to 3-5% each.

PSU stocks rose after Finance Minister Pranab Mukherjee said today that the government plans to raise Rs 30,000 crore by selling stakes in state-run firms in the fiscal year that begins on 1 April 2012. The index advanced 1.3% at 7,732.

Shares of infrastructure companies rallied on the bourses on hopes that the RBI may reduce interest rates in its mid-quarter policy review on March 15. GMR Infrastructure, Jaiprakash Associates, Lanco Infrastructure and IRB Infrastructure Developers rallied up to 5-13% each on the Bombay Stock Exchange.

On the Sensex, Sterlite Industries advanced 5% at Rs 121 and was the top gainer. Other prominent gainers included Gas Authority of India (GAIL), Jindal Steel, ONGC and Reliance Industries, up 3-5% each. GAIL traded higher by 5% at Rs 370 on reports that the company plans to commission liquefied natural gas (LNG) terminal at Dabhol in Maharashtra in the first week of April. “Dabhol LNG terminal will be commissioned on the first week of April with the first cargo of spot liquefied natural gas expected to arrive at the Maharashtra port on March 27,” the report suggests quoting Gail India chairman BC Tripathi.

Wipro was the top loser from the pack, down 1.3% at Rs 432. The company said the Azim Premji Foundation, a trust controlled by the company’s promoter plans to sell up to 35 million shares, representing 1.4% stake of the company through an auction route. “The auction will take place on Wednesday, March 14, 2012 between 9:15 am and 1:30 pm,” the company said in a filing to the stock exchanges.

Mahindra & Mahindra shed 1% at Rs 657. Bajaj Auto, Tata Motors and ICICI Bank, down marginally, were the other losers from among the Sensex 30 stocks.

The overall market breadth was positive as 1,712 stocks advanced against 1,214 declining ones, on the BSE.