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Markets surged on Tuesday to end at their highest closing level in three weeks, led by financial shares, amid high growth forecast in the last two quarters of the current fiscal, fiscal deficit target at an 8-year low of 4.1% and reduction in net borrowing for FY15.
The 30-share Sensex ended up 170 points at 20,634 and the 50-share Nifty ended up 54 points at 6,127.
On January 29, 2014, the Sensex had ended at 20,647 and the Nifty had ended at 6,120.
The midcap index gained 0.8% and the smallcap index was up 0.8% in line with the BSE benchmark index.
Finance Minister P Chidambaram in the interim budget said that the country's GDP growth in the last two quarters will be atleast 5.2%.
For 2014-15, the fiscal deficit has been pegged at 4.1% of GDP, 100 basis points lower than the target in the fiscal consolidation road map.
As per the proposals presented in the interim budget, net borrowings of the government in 2014-15 are pegged lower at Rs 4.57 lakh crore against Rs 4.68 lakh crore for the 2013-14 fiscal.
The rupee is trading lower at 62.15 vs previous close of 61.84/85, tracking negative regional stocks and FX cues. The upticks will be sold near 62.30. I am looking at a 61.70-62.30 range for the day, says a dealer with a forex firm.
Sectors & Stocks
Except the FMCG index which was down 0.3% and the IT index which was flat with a negative bias, all the sectoral indices were in the green with Metal, Power, Capital Goods and Bankex indices up 1-2%, leading the gains.
Financial stocks gained after the Finance Minister in the interim budget yesterday made a provision of Rs 11,200 crore for infusing capital in public sector banks and also forecasted GDP growth rate of atleast 5.2% in the last two quarters of the current fiscal. Axis Bank, ICICI Bank, HDFC, HDFC Bank and SBI up 1.5-4.5% were the top gainers.
Auto stocks continued its uptrend after the government provided relief to the sector by reducing the excise duty by 4-6% across two-wheelers, cars, utility vehicles and commercial vehicles. Maruti Suzuki up 2.5% was the top gainer from this space followed by Tata Motors and Mahindra & Mahindra which added 1.3% and 0.7% respectively.
Metal names like Tata Steel, Hindalco and Sesa Sterlite gained 0.5-1.5%.
Tata Power, L&T, BHEL and Infosys up 0.5-2.5% were the other notable gainers.
Gail India, Cipla, Coal India, ITC, Wipro and Bharti Airtel down 0.5-1.5% were the notable losers.
Bharti Airtel slipped 1%, after the company and Loop Mobile announced a strategic agreement for their operations in Mumbai service area.
The market breadth was positive on the BSE. 1,419 stocks advanced while 1,218 stocks declined.
Hexaware Technologies was up 11% at Rs 160 amid heavy volumes.
ABB India moved higher by nearly 13% to Rs 667 after reporting a better-than-expected an over three-fold jump in net profit at Rs 59 crore for the fourth quarter ended December 31, 2013, due to lower operational cost. The company had profit of Rs 17 crore in the same quarter year ago.
Force Motors zoomed 15% to Rs 353, extending its previous day’s 7% surge, after the company said its promoter has acquired nearly 5% stake in the company on Monday.
Japanese shares surged and the yen sagged after the Bank of Japan doubled loan programs aimed at stimulating bank lending and economic growth, while most other Asian shares were softer after solid gains in recent sessions.
Japan's Nikkei average rose as much as 3.5% after the BOJ extended and expanded special loan facilities aimed at driving more funds through the banking sector to borrowers.
The extension had been expected as the schemes were set to expire in March.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1% as Chinese shares slid from two-month highs after the Chinese central bank drained funds from money markets.
Meanwhile, the European shares started lower on account of profit taking after hitting a three-week high the previous day. CAC, DAX and FTSE were marginally down by 0.1-0.6%.