Post Session: Quick Review

Indian equity markets clocked sixth straight session of gains on Friday as market-participants continued to lap up equities at the start of the New Year amidst hopes of more reforms from Narendra Modi Government, while positive economic data also added to the upside of the markets. Sentiment got a boost after Indian manufacturing activity expanded at its fastest pace in two years in December as new orders, both from home and from abroad, flooded in and as factories kept price increases to a minimum. The HSBC India Purchasing Managers' Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, climbed to two year high at 54.5 in December, up from 53.3 in the prior month. By close of trade, both Sensex and Nifty rallying over 1.25%, concluded past crucial 27,850 and 8,350 levels respectively. Stocks from midcap and smallcap companies also joined the rally along with key private financials like HDFC bank, ICICI and Axis Banks.

On the global front, Asian stock markets concluded marginally higher on Friday in the absence of firm global cues, amid thin volumes following the New Year's Day holiday. Some of the markets in the region, including Japan, continue to remain shut for the extended New Year's holiday. Meanwhile, European shares fell into negative territory after data revealed that the euro zone manufacturing sector ended 2014 on a subdued note. Markit's manufacturing purchasing manager’s index (PMI) for the region came in at 50.6 in December, slightly below a flash estimate. The 50-point mark separates contraction from expansion.

Closer home, with buying activity being broad-based, all the sectoral indices on BSE concluded into positive territory, nevertheless stocks from Capital Goods, Banking and Power counters were the prominent gainers. Banking stocks spurted in today’s trade as the two-day brainstorming session of the finance minister, the Reserve Bank of India (RBI) governor and chiefs of state-owned banks begins on January 2, 2015. The meeting's agenda includes universal financial inclusion, leveraging technology, improving risk management, recovery and asset quality, talent management in PSU banks, and consolidation & restructuring of PSU banks for better efficiency, governance and capital efficiency. Moreover, infra stocks were trading higher after government in order to fund the ambitious infrastructure development programme of the Government, particularly the building of 15000 kms of roads, during current and next financial year decided to increase basic excise duty on petrol and diesel (both branded and unbranded) by Rs 2 per litre. Besides, Auto stocks rose after the release of monthly sales numbers. The overall market breadth on BSE was in the favour of advances, which thumped decliners in the ratio of 1773:1157, while 112 shares remained unchanged (Provisional).

The BSE Sensex ended at 27887.90, up by 380.36 points or 1.38% after trading in a range of 27519.26 and 27937.47. There were 24 stocks advancing against 6 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.86%, while Small cap index up by 0.74%. (Provisional)

The gaining sectoral indices on the BSE were Capital Goods up by 1.67%, Bankex up by 1.66%, IT up by 1.20%, Power up by 1.17%, TECK up by 0.98%, while there were no losers on the index. (Provisional)

The top gainers on the Sensex were HDFC up by 4.07%, BHEL up by 2.83%, Tata Motors up by 2.83%, ICICI Bank up by 2.78% and Axis Bank up by 2.43%. On the flip side, Mahindra & Mahindra down by 1.03%, Reliance Industries down by 0.38%, Bajaj Auto down by 0.32%, Hero MotoCorp down by 0.23% and Hindustan Unilever down by 0.16% were the top losers. (Provisional)

Meanwhile, the government has replaced 65-year-old Planning Commission by a new body, NITI Aayog that will be headed by the Prime Minister Narendra Modi. All chief ministers and Lt. Governors of Union Territories will be on its governing council to evolve national development priorities with the involvement of states. The new body will have a Vice Chairperson and CEO in addition to five full-time members and two part-time members, while four union ministers would serve as ex-officio members.

NITI Aayog aims to foster cooperative federalism through structured support initiatives and mechanisms with the States on a continuous basis, recognizing that strong states make a strong nation. States will continue to receive support for removing bottlenecks and will be able to approach the new institution for consulting and capacity building. Further, the states will also tailor their plans to suit their needs under more than 40 centrally sponsored schemes.

Instead of top down approach in planning commission, the new body will adopt a 'Bottom Up' approach, where decisions will be taken at the local level and then endorsed at the Central level. This also reflects new government's approach to develop mechanisms to formulate credible plans at the village level and aggregate these progressively at higher levels of Government. NITI Aayog will also serve as a 'Think Tank' of the Government and will provide Centre and States with relevant strategic and technical advice across the spectrum of key elements of policy.

India VIX, a gauge for markets short term expectation of volatility tumbled 8.18% at 13.79 from its previous close of 15.02 on Thursday. (Provisional)

The CNX Nifty ended at 8395.45, up by 111.45 points or 1.35% after trading in a range of 8288.70 and 8410.60. There were 42 stocks advancing against 8 stocks declining on the index. (Provisional)

The top gainers on Nifty were HDFC up by 4.26%, Asian Paints up by 3.46%, Jindal Steel & Power up by 3.45%, Ultratech Cement up by 2.99%, ICICI Bank up by 2.84%. On the flip side, BPCL down by 1.50%, Mahindra & Mahindra down by 1.00%, NMDC down by 0.88%, Hindustan Unilever down by 0.33% and Reliance Industries down by 0.26% were the top losers. (Provisional)

European Markets were trading in the red; UK's FTSE 100 was down by 0.47%, France's CAC was down by 0.56% and Germany's DAX was down by 0.83%.

The Asian equity benchmarks ended mostly in green on Friday, as Chinese shares in Hong Kong jumped amid speculation that government will relax monetary policy to boost growth. Shanghai, Nikkei and Taiwan Weighted stock exchange were closed on account of holiday. China’s growth engine looks to have ended last year on a flat note as its massive factory sector sputtered in December, though ebbing price pressures also offered scope for more policy stimulus from Beijing and across much of Asia. The tale was similar from Singapore to South Korea to Indonesia as manufacturers struggled with weak demand, both at home and abroad. Chinese Manufacturing PMI fell to an annual rate of 50.1, from 50.3 in the preceding month. Singapore’s economic growth slowed more than expected in the fourth quarter as the manufacturing sector contracted in the face of erratic global demand, raising concerns about the outlook for 2015. Singaporean GDP fell to a seasonally adjusted 1.5%, from 2.8% in the preceding quarter. Indonesian Trade Balance fell to a seasonally adjusted -0.42B, from 0.02B in the preceding month while Indonesian Inflation rose to a seasonally adjusted 8.36%, from 6.23% in the preceding month.