Bulls (M)arch ahead to bid farewell to FY2010

Where monetary tightening by the Reserve Bank of India’s (RBI hiking the repo and reverse repo by 25 basis points each) and deepening crises in Euro zone — Greece’s debt problems and Fitch Ratings downgrading Portugal's sovereign credit outlook— had a sobering effect on the market in the month, there were panoply of positives that the market can rejoice on. And the long list included — the surge in manufacturing and services activity in February, rise in exports for the third month straight in January 2010, record auto sales, strong index of industrial production (IIP) reading for January (16.7% year-on-year growth) combined with encouraging Q4FY 2010 advanced tax payouts by the top Indian corporates, food inflation contained at its four-month low (16.3% year on year) and Standard & Poor’s upgrading India’s outlook from ‘negative’ to ‘stable’.

In the month the Sensex swung 1,355 points while Nifty moved 394 points. Sensex and Nifty touched their two-year high of 17793 and 5329 respectively. The BSE bellwether ended the month 1,098 points (6.27%) higher at 17528 and the NSE benchmark posted gains of 327 points (or 6.64%) to close at 5249.

Of the 13 sector indices on the BSE all posted gains except BSE PSU that ended 1.91% lower. With the global economy looking up, commodities were the first to gain. This saw BSE Metal post the highest gains (up 9.58%). BSE Bankex (up 8.48%) was at second spot and Indian pharmaceutical and device makers set to benefit from the passage of US Healthcare Reform bill led BSE Health Care (up 8.45%) occupy the third spot.

As mad as a March hare stocks were Sintex Industries (up 23.76%), Chennai Petroleum (higher 20.33%) and Gujarat NRE Coke (20.15% up). The stocks that received max bashing for the month were public sector utilities NMDC (down 31.86%) and Rashtriya Chemicals and Fertilisers (slid 14.33%) and sugar major Balrampur Chini (12.48% lower).

Foreign institutional investors (FIIs) were the net buyers all through March, buying stocks worth Rs19,087 crore, whereas domestic institutional investors (DIIs) were the net sellers shedding Rs3,325 crore worth of shares in the month.

The coming months will see Domestic indices witness lot of volatility on Q4 earnings and guidance, auto sales numbers, cements production figures, export numbers, IIP numbers and inflation figures. However, most anticipated event for the month — RBI’s quarterly monetary policy review scheduled on April 20, 2010 — along with global signals will play instrumental role in deciding the market’s course.