Post session - Quick review

The Indian equity markets after much deliberation and choppiness managed a close of green on Monday, the trade that started on a soft note slowly gathered momentum in the second half with the recovery of the European markets and touched the high points of the day in last hour to finally close with modest gains, after some profit booking in the last. The global cues dominated the initial trade of the markets and most of the Asian markets made a somber start as late on Friday, ratings agency Standard and Poor’s (S&P) downgraded the credit ratings of nine European nations, including France and Austria, which lost their precious triple-A ratings, though usually the ratings downgrade indicates higher borrowing cost for the nations but European Central Bank is expected to forays into the secondary market, as per its commitment to keep borrowing costs for Italy and Spain affordable seen as key to prevent a fast escalation of the crisis. The major European markets were seen reversing their early losses and moving into the positive territory.

Back home, the local markets seemed in a pessimistic mood with the start of the new week, while on one hand the global cues were weighing down on the other, there was not much on domestic front that could support the markets to move higher from their Friday’s close. The beaten down IT and technology sector stocks witnessed some buying interest at the lower levels and gathered gains of over one and half a percent. While, by the end capital goods sector emerged as the clear winner with gains of over two percent, Auto and metal sector also managed a green close after the monthly inflation numbers for the month of December came much in line with the street expectation, declining sharply to 7.47% from 9.11% in the month of November, sharp decline in prices of primary articles and food articles mainly contributed to the fall. The decline in inflation numbers raised the speculation that RBI may go for CRR cut in its upcoming monetary policy review and led the rate sensitive’s in the jubilant mood. There was another positive news, Exports grew by 6.7% year-on-year, though Imports, too, increased by 19.8%, leaving a trade deficit of $ 12.8 billion. Some of the non sectoral gauges kept buzzing for the day, the cable companies started moving higher since morning on the buzz that Reliance Industries is planning to pick up a minimum 26 per cent stake in leading cable operators, including multi-system operators. It was said that the company, has approached Den Networks, Digicable Networks, Hathway Cable and Datacom, IndusInd Media and Communications and several independent multi-system operators. The other non sectoral gauge in limelight was fertilizers on buzz that government is going to consider hike in urea prices ahead of state elections. Stocks like, RCF, Chambal Fertilizers, Zuari Industries and national Fertilizers were up by 1-4%. The broader markets presented a mixed show, BSE Mid cap index was down by 0.06%, while the Small cap index was up by 0.32%.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1390:1352 while 105 scrips remained unchanged. (Provisional)

The BSE Sensex gained 35.75 points or 0.22% and settled at 16,190.37. The index touched a high and a low of 16,214.36 and 16,037.60 respectively. 15 stocks advanced against 15 declining ones on the index (Provisional)

The BSE Mid-cap index lost 0.06% while Small-cap index was up by 0.28%. (Provisional)

On the BSE Sectoral front, Capital Goods up 2.48%, IT up 1.80%, TECk up 1.56%, Auto up 0.85% and FMCG up 0.52% were the top gainers while Oil & Gas down 1.71%, Health Care down 0.68%, Realty down 0.57%, PSU down 0.54% and Bankex down 0.24% were the only losers.

The top gainers on the Sensex were BHEL up 4.31%, Maruti Suzuki up 3.47%, L&T up 3.02%, SBI up 2.65% and Sterlite up 2.42%.

On the flip side, RIL down 2.51%, NTPC down 2.26%, HDFC Bank down 1.77%, Cipla down 1.76% and HUL down 1.58% were the top losers in the index. (Provisional)

Meanwhile, exports of services like software, construction, and transportation from India declined slightly in the month of November to $11.28 billion over the previous month, according to the data released by Reserve Bank of India (RBI). The central bank’s provisional aggregate data on India’s international trade in services, which is released on a monthly basis with a lag of 45 days, showed that the exports stood at $11.45 billion in October.

India’s services sector, which plays a major role in India’s economy as it constitutes about 60 percent of the GDP, saw its imports rise to $7.40 billion in the month under review as against $6.82 billion in October. Thus, services exports during the first eight months of this fiscal stood at around $124 billion, while imports were over $69 billion during the April-November period.

In the first six months of the fiscal, the country’s net foreign inflows from trade in services were at $46.4 billion while merchandise exports in the eight-month period from April-November aggregated to $192.69 billion and imports equaled $309.5 billion.

India VIX, a gauge for market’s short term expectation of volatility gained 2.51% at 24.07 from its previous close of 23.48 on Friday. (Provisional)

The S&P CNX Nifty gained 12.65 points or 0.26% to settle at 4,878.65. The index touched high and low of 4,880.80 and 4,827.05 respectively. 23 stocks advanced against 27 declining ones on the index. (Provisional)

The top gainers on the Nifty were Maruti up 4.38%, BHEL up 3.64%, L&T up 3.03%, SBI up 3.03% and IDFC up 2.90%.

On the other hand, Reliance Power down 3.30%, NTPC down 2.68%, Kotak Bank down 2.45%, RIL down 2.26% and HDFC Bank down 2.03% were the top losers. (Provisional)

The European markets traded on a mix note, with France's CAC 40 down 0.34%, Germany's DAX up 0.32% and Britain’s FTSE 100 down 0.17%.

Asian equity markets ended with grave losses on Monday ahead of a debt sale by France after Standard & Poor’s stripped the nation’s AAA rating and downgraded eight other European nations, stoking fears the region’s debt crisis may deteriorate. The rating cuts will keep market focus pinned on auctions, with France and Spain providing another key test of investor confidence this week, but also increase pressure for urgent policy responses from European leaders. Meanwhile, Japan’s Nikkei 225 Stock Average fell 1.4% even after a report showed the country’s machine orders in November jumped to the highest level since January 2008.