Benchmarks end near day’s high; bulls wake-up in late trade

Monday’s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of over a percent. Hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending at intraday high levels, recapturing their crucial 27,700 (Sensex) and 8,300 (Nifty) bastions. Earlier, markets made flat-to-positive start and traded in tight band for most part of the day’s trade as investors remained concern after Finance Ministry’s Mid-Year Economic Analysis stated that meeting the 4.1 per cent fiscal deficit target for 2014-15 is a ‘major challenge’. There will be another concern from a report that Foreign Direct Investment (FDI) in the country’s services sector, which contributes about 60 per cent to India’s GDP, fell 7.5 per cent to $1.22 billion during the first half of the current fiscal. Markets witnessed a sharp spurt in last hours of trade as investors continued hunt for fundamentally strong but oversold stocks. Some support came in from a private survey which stated that India remains one of the most preferred investment destinations for global investors while domestic companies expect stable economic conditions in the near term.

Buying got intensified after European counters made firm opening, as a recovery in beaten-down oil prices and the rouble and more calls for quantitative easing from the ECB helped lift the sentiment. Asian equity benchmarks ended mostly in the green supported by gain in commodity stocks amid a rally in crude oil. Meanwhile, Chinese stocks trading in Hong Kong rallied the most in two weeks amid speculation the government will take more measures to support economic growth and the slump in oil prices may be excessive.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Recovery in Indian rupee too supported the sentiments. The rupee firmed up against the US dollar and was trading at 63.23 at the time of equity markets closing as compared to Friday’s close of 63.29. Meanwhile, banking shares, which were trading lower in first half of the session, also made a splendid recovery by close of trade. On the flip side, shares of tyre companies like Apollo Tyres, Ceat and JK Tyre witnessed immense pressure as reports suggest of these companies agreeing to procure rubber from the domestic market, which is 25% higher price over international price to aid the fund-starved sector in Kerala.

The NSE’s 50-share broadly followed index Nifty rose by around hundred points and ended above the psychological 8,300 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by around three hundred and thirty points to finish above the psychological 27,700 mark. Broader markets too were traded with traction and ended the session with a gain of around half a percent. The market breadth remained in favour of advances, as there were 1,552 shares on the gaining side against 1355 shares on the losing side while 117 shares remain unchanged.

Finally, the BSE Sensex surged by 329.95 points or 1.21%, to 27701.79, while the CNX Nifty soared by 98.80 points or 1.20% to 8,324.00.

The BSE Sensex touched a high and a low of 27725.27 and 27382.32, respectively. The BSE Mid cap index was up by 0.92%, while the Small cap index was up by 0.35%.

The top gainers on the Sensex were Mahindra & Mahindra up by 4.09%, Coal India up by 3.61%, HDFC up by 2.80%, BHEL up by 2.67% and GAIL India up by 2.64%. On the flip side, Hindalco down by 1.17%, Larsen & Toubro down by 0.57%, Tata Steel down by 0.33% and Infosys down by 0.24% were the only losers.

On the BSE Sectoral front PSU up by 1.72%, Power up by 1.48%, FMCG up by 1.47%, Bankex up by 1.47%, Auto up by 1.40% were the top gainers, while there were no losers in the space. 

Meanwhile, with government’s ‘Mid-year Economic Review’ report pegging India’s growth rate of 5.5% in ongoing fiscal, Union Finance Minister, Arun jaitley underscored that India could well achieve 6% growth next fiscal and required shared vision to achieve 9-10% economic growth.

He further underscored that his government was completely committed to the insurance reform and would not allow opposition from obstructing this. The minister is all set to present Insurance Amendment Bill for consideration and approval in Rajya Sabha.

Meanwhile, Finance minister introduced the long-pending GST Bill in the Lok Sabha to roll out the new regime from April 2016, which would subsume various levies like entry tax and Octroi. Touted as the single biggest indirect taxation reform since independence and a 'win-win' for Centre and states, the 122nd Constitution Amendment Bill for Goods and Services Tax (GST) was tabled by Finance Minister Arun Jaitley after extensive discussions to get states on board by addressing their concerns.

The CNX Nifty touched a high and low of 8,330.95 and 8,228.20 respectively.

The top gainers on Nifty were Jindal Steel & Power up by 6.79%, Mahindra & Mahindra up by 4.23%, Coal India up by 4.06%, NMDC up by 3.63% and Cairn India up by 3.24%. On the flip side, Hindalco Industries down by 1.17%, Zee Entertainment Enterprises down by 0.92%, Larsen & Toubro down by 0.64%, HCL Technologies down by 0.26% and Tata Steel down by 0.17% were the top losers.

European markets were trading in green, France’s CAC 40 was up by 0.92%, Germany’s DAX was up by 0.75% and United Kingdom’s FTSE 100 was up by 0.94%.

The Asian equity benchmarks ended mostly in green on Monday, with Chinese stocks trading in Hong Kong rallied the most in two weeks amid speculation the government will take more measures to support economic growth and the slump in oil prices may be excessive. China’s factory output is likely to rise about 8.3% in 2014 from a year earlier. Factory output rose 7.2% in November from a year earlier, down from October’s 7.7%. South Korea cut its bullish growth forecasts for both this year and next but its revised projections were still seen as too optimistic, supporting expectations of an interest rate cut early next year. The Ministry of Strategy and Finance forecasted that economy will grow by 3.4% this year, down from 3.7% projected in July, with private investment and sentiment turning out weaker than the government had expected. It also downgraded its 2015 growth forecast to 3.8% from 4%.

Singapore’s headline inflation rate in November may turn negative for the first time in five years due partly to sliding oil prices, and a few economists see scope for the central bank to ease tight monetary policy to support economic growth. The last time the Monetary Authority of Singapore (MAS) eased monetary policy was October 2011. It has stuck to a framework of allowing a modest and gradual appreciation of the Singapore dollar since April 2010 to curb inflationary pressures.