Post session - Quick review

After trading choppy throughout the day’s trade on Monday, markets snapped the session on flat note supported by short covering in late hour. The benchmarks recouped their losses sharply from day’s low, led by power, capital goods and realty stocks. Decent recovery was seen in the second half of the day’s trade after some improvement witnessed in sentiments which remained pessimistic since the start of trade tracking the weakness in most Asian markets. Domestic bourses followed the European counters which showed decent opening ahead of the meeting of German Chancellor and French President later in the day which will be followed by a round of talks among euro-area leaders before the next European summit in Brussels. Moreover, Chinese benchmark too exhibited smart move gaining about three percent after the Chinese Premier Wen Jiabao said Beijing would improve market regulation.

Earlier, the markets made a soft start on the back of weak global cues as all the Asian equity indices barring Shanghai Composite remained in red.  Afterwards, markets extended their downfall tumbling below crucial 15,700 (Sensex) and 4,700 (Nifty) marks as Prime Minister Manmohan Singh, admitting that the country was going through difficult times has cut the nation's growth rate down to 7% in the current fiscal from 8.5% last year. Meanwhile, Telecom Regulatory Authority of India (TRAI) has floated a pre-consultation paper on exit policy for telcos. The regulator on the basis of the inputs is contemplating to issue a consultation paper on exit-policy for the telecom service providers soon, however most of the telecom companies ended in the red. Moreover, Auto stocks fell on worries growing competition from global vehicle makers could adversely impact sales of listed auto firms. But, the benchmarks found strong support at their psychological levels and the indices gradually started moving northward as most of the Asian counters pared their initial losses. Meanwhile, sugar companies remained in jubilant mood after getting a clean chit from CCI. Bajaj Hindusthan, Shree Renuka Sugars and Rana Sugars all traded superbly with ample of gains. In the last leg of trade, market regained their positive territory as sentiments were supported by shares of companies linked to railway business spurted as investors snapped up these battered stocks in the run up to the Railway Budget in March 2012. Aviation stocks too supported the sentiments and extended recent gains triggered by reports the Civil Aviation Ministry is likely to drop its opposition to higher investment by foreign airlines in the sector and agree to let them hold up to 49% in domestic carriers. Finally, markets snapped the day’s trade near their neutral line with a marginal cut.

The BSE Sensex lost 34.17 points or 0.22% and settled at 15,814.63. The index touched a high and a low of 15,871.51 and 15,678.30 respectively. 12 stocks advanced against 17 declining ones while 1 stock remained unchanged on the index (Provisional)

The BSE Mid-cap index gained 0.67% while Small-cap index was up by 1.44%. (Provisional)

On the BSE Sectoral front, Power up 1.72%, Capital Goods up 1.71%, Realty up 1.41%, HealthCare up 1.04% and Consumer Durables up 0.82% were the top gainers while TECk down 0.52%, FMCG down 0.39%, Oil & Gas down 0.55%, Auto down 0.39% and IT down 0.16% were the top losers.

The top gainers on the Sensex were BHEL up 3.33%, Jindal Steel up 2.83%, Cipla up 2.77%, Tata Power up 2.07% and Maruti up 1.97%. (Provisional)

On the flip side, Bharti Airtel down 2.99%, SBI down 1.96%, Tata Motors down 1.74%, Coal India down 1.61% and HUL down 1.43% were the top losers in the index. (Provisional)

Meanwhile, Foreign institutional investors (FIIs) have invested nearly Rs 6,500 crore into the Indian market, including stocks and bonds, in the first week of the January 2012. According to information available with market regulator SEBI, FIIs have purchased equities and debt securities worth a gross amount of Rs 15,168 crore. On the other hand, they have sold shares and bonds worth Rs 8,674 crore in the same period, making a net investment of Rs 6,494 crore for the period.

Experts are of the view that optimistic global cues along with declining food inflation number have helped to enhance investor confidence in the market during the week. In the first week, FIIs were more bullish on the debt market, translating into a net investment of Rs 5,488 crore during the period, whereas their investment in stocks stood at Rs 1,006 crore.

The government on January 1 had announced a new scheme, under which qualified foreign investors (QFI), including overseas individuals were allowed to invest directly in Indian stock markets. This was done with the intention to widen the profile of investors and attract more foreign funds in the wake of FII money being taken-out from the markets.

Further, the move is also expected to trim down market volatility and deepen the Indian stock markets. Earlier, QFIs were permitted to invest only in mutual fund schemes. The foreign investors could earlier invest into Indian markets through opening accounts with SEBI registered FIIs or through participatory notes.

In 2011, FIIs purchased stocks and bonds worth Rs 8 lakh crore, but sold securities worth Rs 7.9 lakh crore, resulting into an investment of Rs 1,7480 crore for the year. On the other hand, investors have gathered towards the debt market and made an investment of Rs 20,293 in the year 2011, while at the same time they stayed away from equity market and pulled out Rs 2,812 crore.

India VIX, a gauge for market’s short term expectation of volatility gained 0.11% at 25.68 from its previous close of 25.65 on Saturday. (Provisional)

The S&P CNX Nifty lost 2.55 points or 0.05% to settle at 4,744.35. The index touched high and low of 4,758.70 and 4,695.45 respectively. 29 stocks advanced against 20 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were BHEL up 3.35%, Cipla up 3.14%, JP Associates up 2.80%, Jindal Steel up 2.56% and IDFC up 2.55%.

On the other hand, Bharti Airtel down 3.25%, Sesa Goa down 2.29%, SBI down 2.07%, Coal India down 1.72% and Bajaj Auto down 1.64% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 0.08%, Germany's DAX up 0.13% and Britain’s FTSE 100 up 0.27%.

Asian stock markets ended the day’s trade mixed on Monday as continued concerns over the outlook for Europe overshadowed better-than-expected US jobs data on Friday, and pushed the euro to fresh lows against the US dollar and Japanese yen. Concerns about the ability of European leaders to find a comprehensive solution to the eurozone’s ongoing sovereign-debt and banking crisis amid growing worries over the outlook for Greece, Italy and Spain took center stage on Monday ahead of a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel.

Chinese benchmark jumped about three percent after the Chinese Premier Wen Jiabao said Beijing would improve market regulation. However, Seoul benchmark fell about a percentage point, weighed down by programme selling ahead of the year’s first expiration date on stock options, with investors remaining dispirited by persistent euro zone debt worries and concerns about upcoming fourth-quarter results.

The stock markets in Japan remained closed on Monday in observance of a public holiday.