Post Session: Quick Review

Local equity markets after snapping three consecutive sessions’ losing streak, witnessed sharp recovery, rallying over 1.25% which lifted both Sensex and Nifty past psychologically crucial 27,250 and 8,200 levels respectively. Buying remained largely broad-based on sustained buying activities by both funds and retail investors thanks to positive global set-up. Additionally, bargain buying activities after three straight sessions of drubbing which presented market-participants with an opportunity to pick fundamentally strong stocks that were available at attractive valuations, also buoyed bourses. Besides, the sentiments were also supported by Finance Minister Arun Jaitley’s statement that the ongoing global slow growth presented an opportunity for the country. In the extremely strong session of trade, benchmarks just went on adding ground to conclude at day’s high point. There appeared no iota of profit-booking as bulls continued to hold on to their strength. Meanwhile, broader indices also participating into the rally, rather outperforming larger counterparts, were up with gains of around 1.50%.

On the global front, Asian stocks gained on Thursday after upbeat U.S. employment data and a halt to a slide in oil tempered investor risk aversion. Hopes that the European Central Bank will embark upon bolder stimulus after data showing the euro zone had slipped into deflation also shored up risk assets. Meanwhile, European shares rose sharply on Thursday, tracking gains in the United States and Asia, as retail stocks rallied and the minutes from the Fed's recent meeting reassured investors that it was not in a hurry to start raising rates.

Closer home, while none of the sectoral indices on BSE ended into negative territory, stocks from Realty, Banking and Fast Moving Consumer Goods counters were the top gainers of the session. IT stocks advanced on positive jobs data from US, with Infosys concluding higher ahead of its Q3 results, January 9, 2015. United States is the world's biggest outsourcing market for Indian IT firms. Additionally, banking stocks too rallied on hopes of rate cut by RBI in its upcoming monetary policy review in February. Besides, hospitality firms advanced after latest data showed that Foreign Tourist Arrivals to India increased 6.8% to 8.77 lakh in December 2014 over December 2013. Moreover, shares of fertilizer manufacturers gained ground after Minister of Chemicals and Fertilizers Ananth Kumar said that the government has removed the cap/restrictions to production of Neem coated urea. The overall market breadth on BSE was in the favour of advances, which thumped decliners in the ratio of 2029:844, while 101 shares remained unchanged (Provisional).

The BSE Sensex ended at 27274.71, up by 365.89 points or 1.36% after trading in a range of 27101.94 and 27316.41. There were 28 stocks advancing against 2 stocks declining on the index. (Provisional)

The broader indices ended in the green; the BSE Mid cap index was up by 1.82%, while Small cap index up by 1.79%. (Provisional)

The gaining sectoral indices on the BSE were Realty up by 2.63%, Bankex up by 2.07%, FMCG up by 1.95%, Power up by 1.62%, Infrastructure up by 1.61%, while there were no losers on the BSE sectoral index. (Provisional)

The top gainers on the Sensex were Tata Motors up by 3.44%, Hindalco up by 2.65%, ICICI Bank up by 2.52%, ITC up by 2.38% and HDFC up by 2.30%. On the flip side, Reliance Industries down by 1.47% and Bajaj Auto down by 0.03% were the only losers. (Provisional)

Meanwhile, with an aim of unleashing fresh set of reforms for the sector, the Power Ministry is drafting a Cabinet Note proposing amendments to the Tariff Policy, which would enable greater competition and create feasible conditions in the sector. This cabinet note is likely to be prepared in another week i.e. January 15, 2015.

As a part of procedure, the Power minister after seeking responses from other concerned ministries on the draft note would send the final note to Cabinet for approval. Stakeholders like Central Electricity Authority (CEA), Central Electricity Regulatory Commission (CERC), principal secretaries of all the state governments and chairpersons of power generation, transmission and distribution utilities reportedly are expected to submit their feedback on the same.

Reports suggest that the ministry, as part of the amendment to the Tariff Policy, has sought extension of Section 62, under which electricity regulatory commissions posses the power to determine tariffs - beyond the financial year 2017 and keep the hydro projects under this section, enabling the continuation of the cost plus tariff structure.

Under the cost plus tariff structure PSUs, like NTPC and NHPC charge cost plus tariff, a lump-sum fee as well as a per-unit charge from the distribution companies or discoms. Additionally, another suggestion is to have a formula which would ensure that variation in fuel and power purchase cost is recovered by the power generating firms. The earlier amendment to the Tariff Policy was approved in 2011. 

India VIX, a gauge for markets short term expectation of volatility declined 9.19% at 16.47 from its previous close of 18.14 on Wednesday. (Provisional)

The CNX Nifty ended at 8234.60, up by 132.50 points or 1.64% after trading in a range of 8167.30 and 8243.50. There were 48 stocks advancing against 2 stocks declining on the index. (Provisional)

The top gainers on Nifty were Asian Paints up by 6.30%, DLF up by 6.05%, Kotak Mahindra Bank up by 5.44%, BPCL up by 5.06% and Jindal Steel & Power up by 5.02%. On the flip side, Reliance Industries down by 1.43% and Zee Entertainment down by 0.10% were the only losers. (Provisional)

European Markets were trading in the green; UK's FTSE 100 was up by 1.31%, France's CAC was up by 1.44% and Germany's DAX was up by 1.09%.

The Asian equity benchmarks ended mostly in green on Thursday, while Chinese stocks fell the most in two weeks. Japan’s government is preparing a projection of real economic growth of around 1.5% in the next fiscal year after marking its first economic contraction this year since the global financial crisis. The government projection compared with a forecast of 1.4% growth issued in July, and is in line with the Bank of Japan’s growth estimate published in October. The government’s forecast provides the basis for its economic policies, including its annual budget plan for the next fiscal year, which will be decided on January 14. Malaysian Trade Balance rose to 11.13B, from 1.20B in the preceding month. The Central Statistics Agency, or BPS, last week released Indonesia’s latest poverty data, which found that 27.73 million people, or about 11% of the country’s population, lived below the poverty line as of September last year.