If the Nifty closes above 5,310 tomorrow, it is likely to hit 5,370

After a flat opening, the market which received a boost from the RBI’s 50 basis point rate cut, closed in the green for the second day in a row. Today the Nifty made a higher high, an indication of the market heading higher. If the Nifty closes above 5,310 tomorrow, it is likely to hit 5,370. The National Stock Exchange (NSE) saw a volume of 65.06 crore being traded.

The market opened with a positive bias on hopes that the Reserve Bank of India (RBI) in its monetary policy for the current fiscal would cut rates in a move to boost liquidity. The Nifty started trade at 5,267, up 41 points, and the Sensex gained 50 points to resume trade at 17,201.

Markets in Asia were mostly lower as Spanish bond yields on Monday surged past the 6% mark, for the first time this year, raising doubts on the European Central Bank’s bond purchase plan. US stocks settled mixed on Monday as better-than-expected retail sales helped improve sentiments.

The benchmarks were flat in morning trade as the market waited for the much-awaited RBI policy announcement. The indices dipped to their intraday lows in early trade with the Nifty going down to 5,208 and the Sensex falling to 17,103.

The Sensex and Nifty surged over 1% post RBI announcement of a 50 basis points (bps) cut in repo rate. The development saw all sectoral indices trading in the green. However, the market came off the highs as investors were disappointed with the RBI governor D Subbarao ruling out further reduction in policy rate in the immediate future citing persistent upside risks to inflation and possible fiscal slippages.

The RBI, in its monetary policy for the current fiscal, cut the repo rate to 8%. However, it kept the cash reserve ratio (CRR), the portion of deposits which banks are required to keep with the central bank, unchanged at 4.75%.

The market retreated to its previous close in noon trade as investors resorted to profit booking at higher levels following a lower opening of the key European indices. But a recovery in European stocks helped the domestic indices stay in the positive. All-round buying support from institutional investors resulted in the market moving further northward in the late session.

British telecom operator Vodafone said it had served the Indian government with a notice of dispute regarding India’s proposal to retrospectively tax overseas transactions.

The benchmarks hit their highs towards the end of trade with the Nifty climbing to 5,298 and the Sensex surging to 17,382. Closing in the green for the second day, the market settled marginally off the highs. The Nifty gained 64 points (1.22%) at 5,290 and the Sensex finished trade at 17,358, up 207 points (1.21%).

The advance-decline ratio on the NSE was a positive 1007:655.

While the broader markets also ended in the green, they couldn’t match the Sensex. The BSE Mid-cap index gained 0.72% and the BSE Small-cap index rose 0.63%.

The sectoral gainers were BSE Realty (up 2.41%); BSE Metal (up 2.01%); BSE PSU (up 1.83%); BSE Capital Goods (up 1.67%) and BSE Power (up 1.64%).

ONGC (up 3.62%); Coal India (up 3.18%); Hindalco Industries (up 3.06%); DLF (up 2.76%) and Hero MotoCorp (up 2.71%) topped the Sensex list. Mahindra & Mahindra (down 0.47%); Reliance Industries (down 0.25%) and Maruti Suzuki (down 0.03%) settled lower on the index.

The Nifty was led by Reliance Infrastructure (up 6.13%); Reliance Communications (up 5.57%); ONGC (up 4.19%); Reliance Power (up 3.88%) and Jaiprakash Associates (up 3.32%). The key losers were Cairn India (down 1.36%); HCL Technologies (down 0.78%); Dr Reddy’s Laboratories (down 0.69%); Kotak Mahindra Bank (down 0.51%) and RIL (down 0.19%).

Markets in Asia settled lower on unending European debt concerns and on reports that foreign direct investment (FDI) into China dropped for a fifth month. FDI in China fell 6.1% in March to $11.76 billion from a year earlier, the ministry of commerce said in Beijing.

The Shanghai Composite declined 0.94%; the Hang Seng fell by 0.23%; the KLSE Composite shed 0.08%; the Nikkei 225 lost 0.06%; the Straits Times fell 0.18%; the Seoul Composite declined 0.37% and the Taiwan Weighted tanked 1.86%. At the time of writing, the key European indices were trading with gains of around 1% and the US stocks futures were in the positive.

Back home, foreign institutional investors were net sellers of shares totalling Rs509.43 crore on Monday. On the other hand, domestic institutional investors were net buyers of equities amounting Rs218.23 crore.

McNally Bharat Engineering Company has bagged a Rs298 crore contract from the West Bengal Power Development Corporation for its Sagardighi power (extension) project’s coal handling plant. The order envisages erection, services, supply of equipment and material. McNally Bharat closed 1.05% down at Rs98.50 on the NSE.

IG Petrochemicals has induced a planned shutdown of one of its PA Plant (PA-2) at Taloja, Maharashtra for change of catalyst. The shutdown is expected to last for around three weeks. The company has sufficient stock of PA in hand and supplies to its customers will be unaffected during the period of shutdown. The stock tumbled 5.33% to close at Rs24.85 on the NSE.

Essar Oil is in advance negotiations with the State Bank of India (SBI) to arrange for a six-year loan with an average interest rate of 12.5% in order to settle its Rs6,300-crore sales tax issue with the Gujarat government. If sanctioned, SBI’s exposure in Essar Oil alone will be close to Rs9,500 crore. Essar Oil settled at Rs53.90 on the NSE, up 0.94% over its previous close.