Mkts retreat from highs; Budget,rate-cut enthusiasm shortlived

The Benchmark indices - BSE Sensex and NSE Nifty - retreated from their record highs struck after the Reserve Bank of India (RBI) slashed key policy rates, as the initial excitement proved to be short-lived on the back of hectic profit-taking, though crawled back to end modestly higher during the holiday shortened week.

A steady steam of buying excitement following the growth-oriented Budget proposals helped the bourses to maintain its strong rallying momentum initially with investors' sentiment surpassing street expectations.

Robust foreign institutional investors appetite for Indian stocks alongwith positive economic momentum and expectations that the much awaited Insurance and Coal Mines bills will get the Lok Sabha nod also supported the general mood.

The unabated buying frenzy charged up further after the apex bank eased policy rates by 25 basis points to 7.5 per cent on Wednesday, its second inter-meeting cut this year on the back of easing inflation.

The move witnessed benchmark indices scaling new highs.

It was a memorable moment for the India markets as both the indices the BSE Sensex and the NSE Nifty conquered the 30,000 and 9,100 milestone respectively with massive wave of buying spree.

But the enthusiasm has proved short lived, as market took a complete U-turn from its historic high levels following a sudden gush of implied volatility, downplaying the significance of the surprise rate cut as investors' reaction to the rate cut was lacklusture.

With two major events - the Union Budget and the much awaited rate cut by the central bank out of the way, domestic investors preferred booking profits and stayed sidelines ahead of long weekend. However, the right mix of policy measures adopted by the government in its budget mainly buoyed investors sentiment, helping the indices to close in positive zone.

The stock market was closed on Friday in view of Holi festival.

Sun Pharmaceutical emerged as the best Sensex performer this week.

The Sensex opened firmly higher 29,533.42 and fluctuated between a high of 30,024.74 and a low of 29,162.47 before finishing at 29,448.95, posting a gain of 87.45 points, or 0.30 per cent.

Similarly, the broad-based 50-share CNX Nifty of the NSE also overpowered a new peak of 9,119.20 and a fresh low of 8,849.35 before rebounding to finish at 8,937.75, showing a rise of 35.90 points, or 0.40 per cent.

The broader markets also performed on revival of buying.

Sustained buying by foreign institutional investors, the backbone and the sole reason for the buoyancy in Indian equity markets stepped up their activity and made a net investment of Rs 2,692.56 crore in the four trading sessions following a business-friendly and growth-oriented Budget proposals.

Second-tier stocks attracted huge buying interest and witnessed a smart rebound after last week's massive selling. Both the BSE-smallcap and BSE-midcap indices rallied by 2.17 per cent and 1.69 per cent respectively, outperforming the Sensex.

Elsewhere in the region, South Korea's Kospi index and Japan's Nikkei 225 index ended at new highs supported by robust US macro data amid concerns after China lowered its GDP growth target.  Out of the 30-share Sensex basket, fourteen scrips ended higher while 16 others finished lower.

Among the major sectoral gainers for the week, Healthcare topped its peers, surging by a whopping 7.17 per cent led by key frontline heavyweights. It followed by Capital Goods 2.88 per cent, Oil and Gas 0.95 per cent, Power 0.76 per cent, FMCG 0.34 per cent and Bankex 0.31 per cent.

On the flip side, Metal remained under intense selling pressure for the second consecutive week and plunged sharply by a massive 4.98 per cent spooked by China's decision to lower its economic growth target for the year to around 7 per cent.

Other laggards included Realty by 1.48 per cent, Consumer Durable 1.45 per cent, Auto 1.43 per cent, PSU 1.40 per cent and Technology by 0.39 per cent.

The smart movers in the stocks' front, Sun Pharma jumped 13.87 per cent to end at Rs 1,037.35 after scaling all time-high of Rs 1,045.90 on the back of news based buying.

Other prominent gainers included Cipla by 8.27 per cent, HDFC by 3.96 per cent, L&T 3.30 per cent, Hindunilver 3.21 per cent, BHEL 2.80 per cent, Dr Reddy's 2.68 per cent,  Reliance Industries 1.89 per cent, HDFC Bank 1.61 per cent, Maruti Suzuki 1.53 per cent, NTPC 1.28 per cent, Wipro 1.16 per cent and ICICI Bank 0.64 per cent.

The notable losers were Coal India plummeted by 7.59 per cent, M&M 4.77 per cent, ITC 4.24 per cent, Tata Motors 3.87 per cent, Sesa Sterlite 3.45 per cent, Tata Steel 3.44 per cent, Hindalco 3.36 per cent, Heromotoco 2.78 per cent,  SBI 2.64 per cent, Bharti Airtel 2.60 per cent, Bajaj Auto 2.33 per cent,  GAIL 2.30 per cent,  Infosys  1.88 per cent, Tata Power 1.79 per cent and ONGC 1.43 per cent.

The total turnover at BSE and NSE drifted to Rs 19,381.01 crore and Rs 91,137.63 crore, respectively, as compared to Rs 25,062.88 crore and Rs 1,21,836.79 crore last Saturday.