Post session - Quick review

Indian equity markets took a U-turn to end surprisingly well in positive territory as market participants built hefty position across the board after benchmark indices seemed approaching an upheaval. Choppy session of trade at Dalal Street emerged as a surprising one as just when the investors anticipated the rally, witnessed in the previous session, as “short- lived”, benchmark equity indices made investors believe that gains are here to stay at Dalal Street. Barometer gauges after languishing down in the first half of the session, made astonishing recuperation to end in the green zone.

Qualms over no easy fix to Europe's debt crisis albeit news of the European Central Bank injecting cash into euro-zone banks, made Asia pacific stocks take a nasty laceration. 523 financial institutions in the euro zone took out EURO 489.19 billion in low-interest loans from the ECB on Wednesday under its newly-activated three-year lending facility. Doubts mainly remained over how much of the funds that banks raised from an inaugural long-term European Central Bank tender would actually flow into struggling euro zone economies and help restore confidence.

Meanwhile, strength was pumped into Indian equity markets post European stocks advanced in early deal as investors’ awaited data on US jobless claims and consumer confidence for signals on the recovery in the world’s largest economy. The US future indices too showed an uptick in the screen trade, indicated positive start of trade at Wall Street.

Back home, investor’s took a heart out of weekly food inflation figures, which sliding for sixth successive week, cooled off to a nearly four-year low of 1.81% for the week ended December 10, its lowest rate since the week ended February 9, 2008, when it stood at 2.26%.It had stood at 13.22% in the corresponding week of 2010. Meanwhile, sugar stocks that were in demand on likelihood of sugar decontrol provided additional fillip to the barometer gauges. Considering that sugar industry would be the priority area after Food Bill, Food Minister KV Thomas reportedly said on Wednesday, 21 December 2011, the government will consider the demand for partial decontrol of the sector. Stocks of Shree Renuka Sugars, Balrampur Chini Mills, Dwarikesh Sugar Industries and Dhampur Sugar Mills, all traded in jubilant mood.On the BSE sectoral front, stocks from Realty, Bankex and Consumer Durable counters were the ones that took the lead for the reversal towards the northbound trajectory of the bourses. However, stocks from Information Technology, TECk counters remained the weak links of the trade.

30 share barometer index- Sensex-after falling sub 15500, recaptured close to 100 points to end above 15700 psychological mark. Similarly, the broadly followed 50 share index- Nifty-accumulating over 25 points pierced through the 4700 level. Broader indices too gained sufficient traction for the day and went home with gains of over 0.75% each. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1543:1166 while 118 scrips remained unchanged.

The BSE Sensex gained 111.96 points or 0.71% and settled at 15,797.17. The index touched a high and a low of 15,834.63 and 15,472.70 respectively. 22 stocks advanced against 8 declining ones on the index (Provisional)The BSE Mid-cap index gained 0.77% while Small-cap index was up by 0.69%. (Provisional)

On the BSE Sectoral front, Realty up 2.90%, Consumer Durables up 2.12%, Power up 2.01%,Bankex up 2.00% and Auto up 1.70% were the top gainers while IT down 1.51% and TECk down 1.33% were the only losers.

The top gainers on the Sensex were DLF up 5.09%, Tata Motors up 3.64%, SBI up 2.72%, ICICI Bank up 2.64% and JP Associates up 2.43%.

On the flip side, Wipro down 3.21%, Bharti Airtel down 1.61%, Infosys down 1.39%, TCS down 1.30% and Coal India down 1.01% were the only losers in the index. (Provisional)

Meanwhile, India’s weekly food inflation, measured by the Wholesale Price Index (WPI), sliding for sixth successive week, cooled off to a nearly four-year low of 1.81% for the week ended December 10, its lowest rate since the week ended February 9, 2008, when it stood at 2.26%. The decline was mainly on the back of declining prices of essential items like vegetables, onion and potato.  Food inflation was 4.35% in the previous week. It had stood at 13.22% in the corresponding week of 2010.

According to the data released by the Ministry of Commerce and Industry, the index for ‘Food Articles’ group declined by 0.5% to 191.0 (Provisional) from 191.9 (Provisional) for the previous week to lower prices of fruits and vegetables and condiments and spices (2% each) and ragi, tea and rice (1% each).  However, the prices of jowar, gram and masur (2% each) and fish-inland, poultry chicken and fish-marine (1% each) moved up.

The index for 'Non-Food Articles' group declined by 0.6% to 177.4 (Provisional) from 178.4 (Provisional) for the previous week due to lower prices of flowers (13%), cotton seed (7%), sunflower (4%) and coir fibre,  copra  and gingelly seed (2% each). However, the prices of gaur seed (5 %), soyabean (4%), raw silk (2%) and linseed, raw rubber, castor seed, rape and mustard seed and groundnut seed (1% each) moved up.

As a result the index for ‘Primary Articles’ which accounts for 20.12% of the WPI declined by 0.2% to 197.7 (Provisional) from 198.1 (Provisional) for the previous week. The annual rate of inflation, calculated on point to point basis, stood at 3.78% (Provisional) for the week ended December 10, 2011 as compared to 5.48% (Provisional) for the previous week ended December 3, 2011.

Meanwhile, the index and annual rate of inflation calculated on point to point basis for ‘Fuel and Power’ group, which accounts for 14.91% of WPI, remained unchanged at their previous week’s level of 172.4 (Provisional) and 15.24% (Provisional) for the week ended December 10, 2011.

The sharp fall in food inflation numbers, which were in double-digit till the first week of November are seen as a big relief to both the government and the Reserve Bank who have been battling high prices for over two years. In a bid to rein inflation, RBI has hiked key policy rates by 13 times since March 2010. However, this time around, the RBI has kept policy rates on hold at its policy review last Friday, sending a strong signal that its next move is likely to be an easing of monetary policy as risks to growth increase. India VIX, a gauge for market’s short term expectation of volatility lost 2.50% at 26.84 from its previous close of 27.53 on Wednesday. (Provisional)

The S&P CNX Nifty gained 38.20 points or 0.81% to settle at 4,731.35. The index touched high and low of 4,740.60 and 4,632.95 respectively. 35 stocks advanced against 15 declining ones on the index. (Provisional)

The top gainers on the Nifty were DLF up 5.62%, PNB up 4.37%, Tata Motors up 4.10%, IDFC up 3.39% and JP Associates up 3.37%.

On the other hand, Wipro down 3.00%, Sesa Goa down 2.04%, Bharti Airtel down 1.92%, Cairn down 1.55% and SAIL down 1.24% were the top losers. (Provisional)

The European markets are trading in green, with France's CAC 40 up 1.25%, Germany's DAX up 1.55% and FTSE 100 up 1.29%.

Asian stock markets ended mostly lower on Thursday amid expectations that the European Central Bank’s massive lending to euro-zone banks will not solve the region’s debt crisis. The performance in Asia followed a flat finish for the Dow Jones Industrial Average on Wednesday, after an ECB bank-lending program garnered higher-than-expected demand. The ECB loaned 489 billion euro to 523 banks for three years.

Chinese key share market closed down 0.2 percent after hitting its lowest level since March 2009, as investors were worried that liquidity will tighten at the year-end following fundraising by large corporates. However, the index bounced back from a decline of as much as 1.9 percent, led by the energy sector, especially green energy-related shares due to the government's support for environmental protection. Moreover, Seoul shares inched down as market cheer from the ECB’s release of cheap liquidity was met with doubt over how much would flow to euro zone countries.