Boisterous benchmarks extend jubilation in noon trades

Indian equity markets continued to rally enthusiastically in Tuesday afternoon trades as the frontline indices kept gaining steam in line with other Asian peers. Benchmarks tested the psychological 4,950 (Nifty) and 16,450 (Sensex) levels in the session and are currently trading just below those levels with over one and half a percent gains. The key gauges finally managed to pierce the 4,900 (Nifty) and 16,400 (Sensex) levels as investors took to hefty across the board buying. Sentiments got bolstered amid indications of improving overall domestic macro-economic scenario and hopes that the government will employ a slew of investor friendly measures in the forthcoming budget in March, as the government looks to revive the economy without raising fiscal deficit. However, UP based sugar stocks remained in somber mood in the session after the Apex court directed the private sugar mill owners in Uttar Pradesh to clear the dues of sugarcane growers. Meanwhile encouraging earnings report from technology major HCL Technologies too lifted sentiments. Leads from the Asian peers too remained heartening as markets in China rallied over four percent on hopes of monetary easing after the world’s second largest economy registered stronger than expected growth in the quarter ended December 31. The European futures too indicated a positive opening for the markets after a successful French debt auction which alleviated concerns over the S&P’s downgrade of European nations’ debt rating. Back home, on the BSE sectoral space, there appeared absolutely no evidence of selling as all the indices traded with notable gains. The high beta Realty stocks remained top gainers with around four and half a percent gains while the metal pocket too shone brightly with around three and half a percent gains.

Moreover, the broader markets traded in tandem with larger peers and surged around one and half a percent in noon trades. The bourses jumped on good volumes of over Rs 0.50 lakh crore. The market breadth on BSE was dominantly in favor of advances in the ratio of 1796:760 while 106 scrips remained unchanged.

The BSE Sensex is currently trading at 16,441.90 up by 252.54 points or 1.56% after trading as high as 16,449.38 and as low as 16,270.87. There were 28 stocks advancing against 2 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index surged 1.53% and Small cap soared 1.47%.

On the BSE sectoral space, Realty up 4.48%, Metal up 3.37%, Capital Goods up 2.62%, Auto up 2.18% and Oil & Gas up 2.05% were the major gainers while there remained no losers in the space.

Maruti up 7.20%, Hindalco up 5.40%, Sterlite up 4.76%, DLF up 4.29% and Tata Steel up 3.57% were the major gainers on the Sensex, while TCS down 0.09% and ITC down 0.05% were the only losers in the index.

Meanwhile, even as the Union Finance Minister exuded confidence that the headline inflation would moderate between 6 and 7 percent by the end of fiscal year 2011-12, Pranab Mukherjee remained a bit apprehensive over only slight decline in manufacturing inflation and rate of price rise in the power group of items. According to the monthly inflation data, the index for manufactured products, which has weight of almost 65% in the wholesale price index (WPI), slipped only to 7.41% in December as against 7.70% in the previous month.

Finance Minister remained confident that moderation in inflation would continue in the coming months though softening in the prices of manufactured goods, despite the rapid decline in non-food primary inflation, may be more gradual. India’s headline inflation sank below the uncomfortable 9% levels for the first time since December, 2010 to the lowest levels in around two years to 7.47% in December, 2011. The sharp plunge in December headline inflation was mainly due to significant decline in inflation for primary articles including food inflation.

Mukherjee also underscored the fact that with encouraging November industrial production growth, the recent headline inflation figures point at improving overall macro-economic scenario in the second half of 2011-12 and with some policy measures this trend is likely to consolidate in the coming months.

The S&P CNX Nifty is currently trading at 4,953.40, higher by 79.50 points or 1.63% after trading as high as 4,957.60 and as low as 4,904.00. There were 46 stocks advancing against 4 declines on the index.

The top gainers on the Nifty were Maruti up 7.06%, Hindalco up 5.92%, IDFC up 5.22%, HCL Tech up 5.19% and Sterlite up 4.98%.

Dr Reddy’s down 0.74%, Ranbaxy down 0.70%, TCS down 0.30% and ITC down 0.05% were the only losers on the index.

Asian markets were trading on an optimistic note; Shanghai Composite rocketed 4.05%, Hang Seng spurted 2.29%, Jakarta Composite climbed 0.60%, Nikkei 225 surged 1.05%, Straits Times soared 1.37%, Seoul Composite jumped 1.80% and Taiwan Weighted amassed 1.65%.