Post Session: Quick Review

Indian markets after suffering five consecutive session’s of decline finally tasted a decent pullback rally, with benchmarks rallying over one and half a percent, regaining their nearest crucial support levels. The jubilation in the markets was contributed by both the global and domestic factors. While, on global front the US Federal Reserve gave the much needed respite after the Fed chief in a testimony said the US central bank can be patient before it begins to raise rates, on domestic front it was the cabinet approving a constitutional amendment bill to rationalise state and central indirect taxes into a harmonised goods and services tax (GST).

The global cues helped the markets get a gap-up start, with the US markets rallying overnight after Fed concluding its two days meeting left interest rates at near-zero levels and said it can be patient in beginning to normalize the stance of monetary policy. The Asian markets too made mostly a positive close led by the Japanese Nikkei, though the South Korean stocks ended lower for the seventh day, the longest losing streak in two months that took the Kospi index to its lowest level since Feb. 5. The European markets too made a solid start, gaining for the third straight day on growing confidence that central banks around the world will support the economy.

Back home, markets bounced back in a style with the benchmarks making triple digit gains, recovering considerable ground of last few days of mayhem. Bourses after a gap-up start never looked up giving up and ended slightly lower from the highs of the day. Traders sensing a buying opportunity lapped up stocks at lower levels and went for value buying. On the sectoral front the consumer durables was the biggest mover with gains of over 5%, power, capital goods and banking followed the chart.  Metals and power stocks were buzzing during the session after the government came out with draft rules for e-auction of 101 (higher from 92 earlier) cancelled coal mines in the first phase, fixing a floor price of Rs 150 per tonne for sectors like steel, sponge iron, cement and captive power. The Coal Ministry has sought comments from stakeholders by December 22. Also as the largest PSU lender State Bank of India (SBI), approved one-time settlement (OTS) scheme for its borrowers from the beleaguered mining industry in Goa. The other non sectoral gauge that was in jubilant mood was of logistics companies, on business growth hopes with lower tax rate and fast movement of goods and inventories after the Cabinet cleared the GST Bill for nationwide sales tax. Gati gained around 6%, Sical logistics surged by 10%, Snowman Logistics was up by around 8%, Gateway Distriparks was up by over 3% and Container Corporation of India moved higher by around 5%. Airlines stocks too got some traction on reports that aviation ministry has drawn up a relief plan for loss-making airlines and series of proposals are being readied for submission to the PMO.

The BSE Sensex ended at 27126.57, up by 416.44 points or 1.56% after trading in a range of 26900.57 and 27180.92. There were 27 stocks advancing against 3 stocks declining on the index.(Provisional)

The broader indices outperformed the benchmarks; the BSE Mid cap index was up by 2.66%, while Small cap index surged by 3.28%.(Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 5.26%, Power up by 3.26%, INFRA up by 3.18%, Capital Goods up by 2.78%, Bankex up by 2.49%, while there were no losing index on BSE.(Provisional)

The top gainers on the Sensex were BHEL up by 4.91%, Hindalco up by 4.31%, GAIL India up by 4.10%, Maruti Suzuki up by 3.91% and ICICI Bank up by 3.82%. On the flip side, Mahindra & Mahindra down by 0.46%, Dr. Reddys Lab down by 0.25% and Hindustan Unilever down by 0.05% were the only losers.(Provisional)

Meanwhile, in an encouraging development for the country, Asian Development Bank (ADB) highlighted that India was well on track of achieving projected 5.5% economic growth rate in 2014-15 as declining oil prices presented the country with golden opportunity for undertaking many beneficial reforms. Falling global oil prices present a golden opportunity for importers like Indonesia and India to reform their costly fuel subsidy programmes.

The Manila-based agency pointed that the target of 5.5% economic growth was well possible after the country registered growth of 5.7% in the first quarter and 5.3% in the second quarter. It emphasized that growth outlook remained steady despite slowed momentum in second half of 2014 and also there were chances of India achieving 6.3% next year, provided Narendra Modi’s government continues with its reform drive.

Further, the agency acknowledged the efforts taken by the Indian government to tackle contentious reforms by eliminating diesel subsidies, but at the same time urged them to extend its efforts to reach the forecast of 6.3% GDP growth in FY2015.

However, the agency in its report titled ‘Cheap Oil Can Benefit Asia’ lowered the GDP growth projection for Asia pacific region to 6.1% in 2014, from 6.2% earlier, and to 6.2% in 2015, from 6.4% earlier.

The ADB also slashed its 2014 and 2015 growth forecasts for China to 7.4% and 7.2%, respectively, from the 7.5% and 7.4% estimates made in September, due to falling property prices and the spillover effects on the construction sector.

The CNX Nifty ended at 8159.30, up by 129.50 points or 1.61% after trading in a range of 8084.90 and 8174.30. There were 46 stocks advanced against 4 declining ones the index.(Provisional)

The top gainers on Nifty were Jindal Steel & Power up by 7.48%, BHEL up by 5.02%, Bank Of Baroda up by 4.46%, Cairn India up by 4.45% and GAIL India up by 4.16%. On the flip side, Grasim Industries down by 0.77%, Mahindra & Mahindra down by 0.57%, Dr. Reddys Lab down by 0.29% and Hindustan Unilever down by 0.05% were the top losers.(Provisional)

All the major Asian indices ended in green barring KOSPI Index which was down by 2.66 points or 0.14% to 1,897.50 and Shanghai Composite which ended lower by 3.5 points or 0.11% to 3,057.52.

On the other hand, Straits Times was up by 16.42 points or 0.51% to 3,243.65, FTSE Bursa Malaysia KLCI increased by 18.05 points or 1.07% to 1,699.95, Taiwan Weighted gained 50.27 points or 0.57% to 8,878.63, Jakarta Composite ended higher by  77.7 points or 1.54% to 5,113.35, Hang Seng surged by 246.37 points or 1.09% to 22,832.21 and Nikkei 225 was higher by 390.32 points or 2.32% to 17,210.05,

European Markets have made a green start and UK’s FTSE 100 was up by 35.73 points or 0.56% to 6,372.21, France’s CAC gained 84.63 points or 2.06% to 4,196.54 and Germany’s DAX was up by 166.33 points or 1.74% to 9,710.76.

The Asian equity benchmarks ended mostly in green on Thursday, after the Federal Reserve pledged patience on interest-rate increase and the yen weakened. China’s foreign exchange regulator expressed concerns over the devaluation of the Russian ruble, asking Chinese entities to take measures to avoid risks. China’s economy showed mild signs of stabilization in the fourth quarter but corporates remained cautious on investment, a business survey found, highlighting stubborn resistance to efforts from Beijing to reinvigorate growth. China’s new home prices fell again in November and a business survey showed a deep drop in real estate investment plans, adding gloom to a slumping property market that has so far defied government efforts to revive it. Average home prices in 70 major Chinese cities fell by an annual 3.7% last month following a 2.6% fall in October, the biggest drop since 2011 and a threat to economic growth.

Japan will spend up to $30 billion in a stimulus package to revive the country’s regions but will keep new bond issuance in check, highlighting the tough balance Prime Minister Shinzo Abe must strike between lifting growth and fixing Tokyo’s tattered finances. A finance ministry’s key fiscal panel has called for drastic steps to cut government spending and secure revenue to meet Tokyo’s aim of halving the primary budget deficit next year, describing the goal as quite difficult. Hong Kong Unemployment Rate remained unchanged at a seasonally adjusted 3.3% compared to the preceding month.