Post Session: Quick Review

Extending their record-setting spree for fourth straight session, Indian equity markets were in jubilant mood on Friday, ending with gains of around a percent, which lifted both Sensex and Nifty above psychologically crucial 29,250 and 8,800 levels respectively. In sync with global counterparts, local equity markets were overwhelmed by larger than expected measures by European Central Bank (ECB) to stimulate the region’s sagging economy, which in turned bolstered the appeal of all the emerging market assets, including local equity markets. Besides, Finance Minister’s assurance of continued reforms by NDA government also buttressed sentiment at Dalal Street. Despite across the broad gains, the broader markets underperformed benchmarks and ended down with cut in the range of 0.15%-0.75%.

On the global front, both Asian and European equity markets were upbeat on the final trading day of the week, tracking a global rally after the European Central Bank (ECB) unleashed a 1 trillion euro ($1.11 trillion) stimulus package to resuscitate the deflation-hit euro zone. Asian shares also edged higher after markets received a better-than-anticipated HSBC flash China's purchasing managers' index (PMI). The flash reading came in at 49.8, after registering a 49.6 final reading in December, its first contraction in seven month.

Closer home, amidst across the board gains, all the sectoral indices on BSE concluded into positive territory, however stocks from Consumer Durables, PSU  counters were the losers of the session. On the flip side, bourses’ gains were led by stocks from Infrastructure, Auto and Realty counters. Rate sensitive stocks were abuzz for yet another session amidst hopes that RBI would cut rates in its upcoming monetary policy on February 3, 2015. The overall market breadth on BSE was in the favour of decliners, which thumped advances in the ratio of 1126:1819, while 97 shares remained unchanged (Provisional).

The BSE Sensex ended at 29278.84, up by 272.82 points or 0.94% after trading in a range of 29165.56 and 29408.73. There were 22 stocks advancing against 8 stocks declining on the index. (Provisional)

The broader indices ended in the red; the BSE Mid cap index was down by 0.14%, while Small cap index down by 0.73%. (Provisional)

The gaining sectoral indices on the BSE were Infrastructure up by 1.51%, Auto up by 1.51%, Realty up by 1.48%, Capital Goods up by 1.32% and Power up by 1.17% while, Consumer Durables down by 0.25% and PSU down by 0.03% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Power up by 6.38%, Cipla up by 4.18%, Bharti Airtel up by 3.51%, Tata Motors up by 3.30% and Larsen & Toubro up by 2.64%. On the flip side, GAIL India down by 1.82%, BHEL down by 1.64%, ONGC down by 0.99%, Coal India down by 0.88% and Dr. Reddys Lab down by 0.57% were the top losers. (Provisional)

Meanwhile, a high level panel has suggested that government's food subsidy bill can come down by over Rs 30,000 crore a year by reducing coverage of beneficiaries to 40 percent under the food law and outsourcing major work of Food Corporation of India (FCI)  to state governments and private players. The eight member panel, headed by Shanta Kumar, has submitted its report on restructuring FCI to Prime Minister Narendra Modi.

The panel has recommended direct cash transfer of Rs 3,000 per person a year as food subsidy and Rs 7,000 per hectare as farm input subsidy besides revising minimum support price (MSP) policy with more focus on pulses and oilseeds. It also suggested revising the National Food Security Act, which the UPA government had rolled out in 2013 as the coverage of beneficiaries is higher and not targeted well.

Further, the panel has suggested giving cash transfer in 52 cities having 1 million or more population in two years and also asked the government to give deficit states the option of either supplying grain or cash transfer. The committee is of the view that lowering the coverage of beneficiaries under the food law to 40 percent, from 67 percent, to cover more BPL families and increase the quantity of foodgrains supply to 7 kg per person from the existing 5 kg.

On restructuring the FCI, the panel suggested that despite FCI is in operation for last 50 years, only 6% of the nine crore farmers are getting the MSP and most poor people are not receiving subsidised grain under PDS due to leakages of upto 40-60 percent. Therefore, there is need to restructure the corporation. Finance Ministry had allocated Rs 1.15 lakh crore for food subsidy this year, of which Rs 92,000 crore is for FCI.

India VIX, a gauge for markets short term expectation of volatility slipped 0.60% at 17.96 from its previous close of 18.56 on Thursday. (Provisional)

The CNX Nifty ended at 8821.55, up by 60.15 points or 0.69% after trading in a range of 8795.40 and 8866.40. There were 31 stocks advancing against 19 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Power up by 6.24%, DLF up by 5.65%, Cipla up by 4.15%, Cairn India up by 3.98% and Jindal Steel & Power up by 3.68%. On the flip side, PNB down by 2.68%, BHEL down by 1.90%, GAIL India down by 1.87%, Lupin down by 1.29% and HCL Tech. down by 1.18% were the top losers. (Provisional)

European Markets were trading in the green; France's CAC was up by 1.52%, Germany's DAX was up by 1.33% and UK's FTSE 100 was up by 0.37%.

The Asian equity benchmarks ended in green on Friday, after European Central Bank President Mario Draghi expanded stimulus. Chinese stocks in Hong Kong climbed to a three-year high as an unexpected gain in a manufacturing gauge signaled the world’s second-largest economy is stabilizing. The bad debt ratio of Chinese banks climbed to 1.6% as of the end of 2014, a level not seen since the global financial crisis and underscoring building financial pressures as China’s economy cools. China’s labour market was stable last year even as its economic growth plumbed a 24-year low, with the urban unemployment rate little changed at 4.1% at the end of December. An economic adviser to Japanese Prime Minister Shinzo Abe stated that Japan could see some concrete movement in its real economy in 2015, adding that inflation expectations have been rising under the Bank of Japan’s monetary stimulus. Taiwanese Industrial Production rose to a seasonally adjusted annual rate of 7.33%, from 6.86% in the preceding month. South Korean GDP fell to a seasonally adjusted annual rate of 2.7%, from 3.2% in the preceding month.