Sensex up 74 points on hopes of liquidity easing

The Bombay Stock Exchange (BSE) Sensex gained 74 points to close at over a week's high of 17,478.15 as investors picked up stocks on the first day of the new fiscal despite HSBC India survey showing a slowdown in manufacturing growth.

Consumer durables, power, capital goods, realty and banking stocks made gains amid hopes of greater liquidity in the system in the coming days and a possible rate cut by the Reserve Bank at its monetary review later this month.

Although global markets showed a mixed trend, European equities were trading higher in early trade.

L&T, TCS, HDFC Bank, HDFC, SBI, NTPC, M&M, Bharti Airtel, ICICI Bank and ONGC made gains. However, top two Sensex players, RIL and Infosys, made losses and restricted gains.

The Bombay Stock Exchange 30-share barometer resumed higher at 17,429.96 and reached 17,529.98. But it closed at 17,478.15, up 73.95 points or 0.42%. On Friday, it had spurt 345.59 points or 2.03%.

The NSE 50-issue index Nifty also improved further by 22.35 points or 0.42% to above 5,300-mark at 5,317.90.

Meanwhile, India's manufacturing sector witnessed the third consecutive month of decline in March as output and new order growth weakened amid power cuts leading to capacity constraints, an HSBC survey said.

The HSBC India Manufacturing Purchasing Managers' Index (PMI) - a measure of factory production - stood at 54.7 in March, down from 56.6 in February. In January, the PMI stood at 57.5. A reading above 50 shows that the sector is growing, while a reading below 50 means the segment is contracting.

"Economic worries led markets to trade in negative for a while but recovery was seen during the afternoon trade as European markets opened in the positive zone," said Shanu Goel, research analyst at Bonanza Portfolio.  

This is a truncated week on account of holidays on Thursday and Friday, hence the markets are expected to trade in a range, Goel added.

Second line stocks outperformed the Sensex as the BSE-Smallcap and BSE-Midcap indices rose by 1.68% and 1.08%, a reflection of retail participation.

FIIs, which have pumped in close of $10 billion in Indian equities this year, bought shares worth Rs962.65 crore on last Friday, as per the provisional data from the stock exchanges.

Globally, key indices in Japan, Singapore and South Korea closed with gains, while from Hong and Taiwan markets finished with losses. Chinese market was closed today. European stocks too were quoting mixed.

Overall 19 of the 30 Sensex scrips closed in the green. DLF was up 2.88%, followed by NTPC (2.74%), TCS (2.01%), L&T (1.96%), M&M (1.66%), SBI (1.64%), HDFC Bank (1.36%), Bhel (1.30%), Cipla (1.28%), HDFC (1.13%), Bharti Airtel (0.95%) and Sun Pharma (0.92%).

However, Bajaj Auto fell 1.45%, followed by Hindalco -1.39%, Sterlite - 1.26% and RIL - 1%.

Among the sectoral indices, the BSE-Consumer Durables rose 3.89%, Power - 1.89%, Capital Goods - 1.74%, Realty - 1.59%, Bankex - 1.02% and PSU - 0.93%.

The total market breadth remained positive with 1,932 stocks gaining ground as against 852 finishing with losses.

The total turnover dropped sharply to Rs2,049.98 crore from Rs3,686.73 crore on Friday.