Benchmarks manage to keep head above water; Nifty recaptures 8,200 mark

Key domestic benchmarks managed to keep their head above water on Friday with nifty and Sensex recapturing their crucial 8,200 mark and 27,200 levels respectively as investors opted to buy beaten down but fundamentally strong stocks, after two sessions of drubbing. Hectic buying activity which took place during last leg of trade mainly drove the markets higher. Some support also came with a report that the government is pushing ministries to ensure mechanism for faster clearances. The Prime Minister's Office has shot off letters to the ministries and departments concerned, asking them to expedite implementation of tasks identified as being their responsibility.

However, gains remained capped on report that foreign institutional investors were net sellers in Indian equities worth Rs 2,808.27 crore on December 24, as per provisional stock exchange data. Depreciation in Indian rupee too dampened the sentiments. Rupee were trading at 63.61 per dollar at the time of equity markets closing compared with its previous close of 63.51 on month-end dollar demand and profit-booking by FIIs.

On the global front, Asian markets extended a weekly gain while the yen fell against the dollar as slowing inflation in Japan boosted hopes that the central bank will introduce more stimulus to revive the economy.

Back home, some support came after the government has approved key insurance, coal and pharma sector reforms which were stuck in Parliament logjam, to boost the domestic economic growth. Some sense of relief also came after Minister of State for Finance Jayant Sinha said, the government is committed to containing fiscal deficit at 4.1% of the Gross Domestic Product (GDP) this fiscal. The government has targeted fiscal deficit of 4.1% of GDP for FY15, down from 4.5% in the previous year and plans to reduce it further to 3% by 2016-17.

Meanwhile, PSU banks remained on buyers’ radar on reports that the Prime Minister Narendra Modi will hold discussions with chiefs of public sector banks on January 3 to work out an action plan for major reforms in the banking sector. Stocks related to select edible oil companies like Ruchi Soya, JVL Agro, Vimal Oil etc. edged higher as the government has hiked import duty on both crude and refined edible oil by 5 percent to protect the interest of domestic farmers and oil processors amid fall in global prices. The customs duty on crude oil has been increased to 7.5 percent from 2.5 percent earlier. Software and technology related stocks too traded jubilantly on the back of decline in US jobless claims for the fourth straight week.

The NSE’s 50-share broadly followed index Nifty rose by over twenty five to end above its psychological 8,200 level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged over thirty points to end above the psychological 27,200 mark. Broader markets too traded in-line with benchmarks and ended the session slightly in the green. The market breadth was evenly divided, as there were 1418 shares on the gaining side against 1418 shares on the losing side, while 115 shares remained unchanged.

Finally, the BSE Sensex added 33.17 points or 0.12%, to 27241.78, while the CNX Nifty gained 26.60 points or 0.33% to 8,200.70.

The BSE Sensex touched a high and a low of 27370.63 and 27091.38, respectively. The BSE Mid cap index was up by 0.41%, while the Small cap index was up by 0.02%.

The top gainers on the Sensex were HDFC up by 1.18%, Sesa Sterlite up by 1.00%, TCS up by 0.98%, Infosys up by 0.84% and Hindalco up by 0.83%. On the flip side, Maruti Suzuki down by 1.31%, BHEL down by 1.26%, ITC down by 1.14%, Hindustan Unilever down by 0.77% and ICICI Bank down by 0.61% were the top losers.

On the BSE Sectoral front Realty up by 0.93%, IT up by 0.85%, TECK up by 0.66%, INFRA up by 0.64%, and Metal up by 0.58% were the top gainers, while FMCG down by 0.81%, Consumer Durables down by 0.50%, Power down by 0.16% and Auto down by 0.04% were only losers in the space. 

Meanwhile, exuding confidence in growth story of Railway sector, Railway Minister Suresh Prabhu hopes that the performance of ailing railways would improve with a clear vision. The Minister for this sought innovative ideas and futuristic vision to turnaround the Railways. Meanwhile, the minister ruled out the possibility of slashing rail fares as a result of the reduction in international crude fuel prices and also to any possibility of privatization in the rail sector. However, he emphasized upon the need to private capital to improve the infrastructure of Indian railways.

The minister further stated that with losses mounting for the sector, the ministry is not implementing the Fuel Adjustment Component (FAC), which provides for half-yearly exercise of adjusting passenger fares on the basis of market rates of diesel. However, he revealed that FAC adjustments were scheduled this month, but the ministry decided to put off this exercise with the view that railways would still be able to save some revenue on account of fuel costs.

Separately, the minister has formulated a six-member task force under the chairmanship of Member (Traffic) to generate advertising revenue by leveraging spaces in coaches, wagons, trains and railway stations. Additionally, a second task force, under the chairmanship of Member (Engineering)-which has representation from the KPMG and Earnest and Young - have been set up by the ministry to implement on strategies delegated to financial powers within the organization. Both of these groups are expected to submit their reports by December 26.

The CNX Nifty touched a high and low of 8,234.55 and 8,147.95 respectively.

The top gainers on Nifty were DLF up by 3.27%, Jindal Steel & Power up by 2.09%, Tech Mahindra up by 1.87%, HCL Technologies up by 1.51% and HDFC up by 1.40%. On the flip side, BHEL down by 1.30%, ZEEL down by 1.04%, Maruti Suzuki India down by 1.04%, Grasim Industries down by 1.02% and ITC down by 0.97% were the top losers.

The Asian equity benchmarks ended in green on Friday, with China’s stocks rallying sending the benchmark index to its biggest two-day gain in five years, on a drop in money-market rates and speculation that government will take more measures to bolster the economy. Hong Kong Stock Exchange was closed on account of ‘The first weekday after Christmas Day’ holiday while Indonesia Stock Exchange was closed on account of ‘National Leave’ holiday. Japanese annual core consumer inflation slowed for a fourth straight month in November due largely to sliding oil prices, highlighting the challenges the central bank faces in achieving its 2% inflation target. Factory output unexpectedly fell and household spending remained weak, suggesting that any rebound in the economy from recession will be mild and fragile. The core consumer price index (CPI), which excludes volatile fresh food but includes oil products, rose 2.7% in November from a year earlier, matching a median market forecast.

Japanese Statistics Bureau stated that the percentage of the total work force that is unemployed and actively seeking employment during the previous month remained unchanged at a seasonally adjusted 3.5% compared to the preceding month. Japan’s industrial production fell to a seasonally adjusted -0.6%, from 0.4% in the preceding month while Japan’s Average Cash Earnings fell to a seasonally adjusted -1.5%, from 0.2% in the preceding quarter whose figure was revised down from 0.5%. Japanese Household Spending rose to a seasonally adjusted -2.5%, from -4.0% in the preceding month. Singaporean Industrial Production fell to an annual rate of -2.8%, from -0.2% in the preceding month.