Sensex spurts for third straight session

The Indian stock markets extended their winning streak to a third straight trading session on Tuesday. After opening with a positive bias, the benchmark indices surged even higher, with the NSE Nifty moving towards the 5400 mark. However, the Nifty was unable to breach the psychological level as selling in Pharma, Auto and select IT stocks dragged the markets from day's high. A reversal in the European markets from a good start also weighed on the sentiment.

The BSE Sensex ended at 17,597, up 119 points or ~0.7% over the previous close. It had earlier touched a day’s low of 17,570 and a day’s high of 17,664. It opened at 17,576. The NSE Nifty settled at 5,359, up 41 points or 0.8% over the previous close. It earlier touched a day’s low of 5,344 and day’s high of 5,379.



The INDIA VIX on the NSE ended lower by 4.2% to close at 20.01. It hit days high of 20.88. It hit a low of 19.93.

Among the BSE sectoral indices, the Consumer Durables index was the top gainer, up 2.1%, while the Capital Goods index gained 1.6%. The Oil & Gas index was up 1.5% and the Metal index ended higher by 1.3%. The Auto index ended down marginally while Pharma closed down ~0.5%.

The BSE Mid-Cap index gained 1% while the BSE Small-Cap index ended fell by 1.1%.

Out of the 50 stocks in the Sensex index notable gainers were Hindalco, Sterlite, SBI, L&T, ICICI Bank, RIL, BHEL and Gail India.

Among the major losers were Hero Motocorp, Maruti, Sun Pharma, TCS and Bharti.

The advance in the Indian market was in line with the trend in other Asian markets. The Japanese and Taiwanese shares were among the only ones that finished in the red today. Asian shares rose after data on China’s services industries beat estimates. China’s non- manufacturing purchasing managers’ index climbed to 58 in March, indicating an expansion, official data show.

Separately, the Reserve Bank of Australia left its policy cash rate unchanged, in line with expectations, but hinted that it might cut rates next month.

"The first quarter of 2012 was very good for Indian equities although it was marred somewhat by the events in March. The start of the second quarter has been positive as well. However, one is not sure whether the rally is sustainable for long given the number of headwinds confronting the Indian and global markets. So, one has to be cautious as the prospects for the short-term to medium-term will hinge on a multitude of factors turning favourable. Among the key variables include inflation, interest rates, crude oil, policy action and stability in global markets," says Amar Ambani, Head of Research, IIFL.

Technically, a formation of a small shooting star at the bearish resistance line of 5360 is indicating a short term pause. The Nifty needs to surpass this level in order to negate the short term bearish implication.

The rupee climbed to its strongest level in nearly two weeks, bolstered by bunched up dollar inflows after a three-day weekend.

Stronger-than-expected manufacturing growth in the US and China bolstered demand for riskier assets.

The Indian currency extended this year’s advance to 4.9% after the BSE Sensex rose for a third day.

The rupee touched 50.5150 earlier, the strongest level since March 21. The currency fell 3.6 % last month, the first decline in 2012.

The Indian currency market was shut as banks closed their accounts for the financial year.

India’s bonds fell, pushing yields to a four-month high, as the government start its record debt-sale program for the new fiscal year later today.

The Government has projected a borrowing programme worth Rs 5.7 trillion for FY13.

Meanwhile, the European stock indices turned lower in a choppy session due to losses in banks. Gains for heavyweight Novo Nordisk prevented the pan-European index from falling further. Spanish banks were among the big losers after government data revealed that unemployment in the country rose 0.8% in March to 4.75 million.

Yields on Spanish and Italian bonds increased while stocks in the two larger euro area members declined.