Benchmarks start New Year on optimistic note

After a dismal 2011 run, the Indian equity markets have started the New Year trade on a promising note with Sensex recapturing its crucial 15,500 mark. However, Global cues remained unsupportive as the US markets lost their way on the last trading day of the year, all the major indices down by around half a percent mainly on European concern while, most of the Asian equity indices were trading in the red at this point of time. Back home, the government’s decision to allow qualified foreign investors (QFIs) to directly invest in the Indian equity market helped boost sentiment. Market heavyweight Reliance Industries was trading with a modest gain of over half a percent. It gained ground after touching new lows last week. Meanwhile, auto stocks like Tata Motors and M&M edged higher in the trade after reporting decent growth in December sales. The broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 860 shares on the gaining side against 492 shares on the losing side while 63 shares remained unchanged.

The BSE Sensex opened at 15,534.67; about 80 points higher compared to its previous closing of 15,454.92, and has touched a high and a low of 15,541.95 and 15,443.22 respectively.

The index is currently trading at 15,512.04, up by 57.12 points or 0.37%. There were 17 stocks advancing against 13 declines on the index.

The overall market breadth has made a strong start with 60.78% stocks advancing against 34.44% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.55% and 0.56% respectively.

The top gaining sectoral indices on the BSE were, CD up by 1.36%, Oil and Gas up by 0.87%, Metal up by 0.82%, CG up by 0.73% and Auto up by 0.66%. While, FMCG down by 0.46% and IT down by 0.31% were the only losers on the index.

The top gainers on the Sensex were Coal India up by 2.06%, Tata Motors up by 1.93%, ICICI Bank up by 1.70%, Tata Steel up by 1.57% and Sterlite Industries up by 1.51%.

On the flip side, DLF was down by 1.31%, Bajaj Auto was down by 0.86%, HDFC Bank was down by 0.71%, Jindal Steel was down by 0.70% and Sun Pharma was down by 0.57% were the only losers on the Sensex.

Meanwhile, in a bid to bridge the growing fiscal deficit, Indian government is likely to borrow about Rs 40,000 crore more in the fiscal year 2011-12. The government’s burgeoning expenditure in the wake of a huge subsidy bill, shortfall in revenue receipts and poor disinvestment realization have compelled it to raise more from the market before March, 2012 than it had planned.

The Finance Ministry is of the belief that the fiscal deficit is likely to overrun the target by a notable margin because of a slew of factors like slowdown in economic activity, increase in subsidy on petroleum and fertilizers, dip in collections from small savings schemes and also as tax collections are expected to fall short of estimates.

If this additional borrowing plan materializes, it would be the second additional borrowing than the originally announced in the Budget 2011-12. The government had in September resorted to additional market borrowing of Rs 52,800 crore above Rs 4.16 lakh crore estimated in the Budget.

The S&P CNX Nifty opened at 4,640.20; about 16 points higher compared to its previous closing of 4,624.30, and has touched a high and a low of 4,645.95 and 4,616.40 respectively.

The index is currently trading at 4,636.30, higher by 12.00 points or 0.26%. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were Coal India up by 2.23%, ICICI Bank up by 1.77%, Tata Motors up by 1.76%, Tata Steel up by 1.68% and Sterlite Industries up by 1.56%.

Sesa Goa down by 1.41%, Kotak Bank down by 1.37%, DLF down by 1.28%, Jindal Steel by 0.92% and ACC down by 0.91%, were the major losers on the index.

The benchmark equity indices in South Korea, Taiwan and Indonesia traded on a pessimistic note on the first trading session of 2012, on a day when majority of bourses in Asia remained shuttered for an extended New Year’s holiday; Jakarta Composite was down 4.94 points or 0.13% to 3,817.06, Seoul Composite was down 6.16 points or 0.34% to 1,819.58 and Taiwan Weighted was down by 120.97 points or 1.71% to 6,951.11.

However, Stock markets in China, Hong Kong, Japan and Singapore remained shut for extended New Year holidays.