Indian markets riding on sanguine global cues stage smart intraday turnaround

Boisterous Indian equity markets managed to elegantly overcome early blues and staged an exciting bounce back from the lowest levels in Wednesday’s session, taking the benchmark indices beyond crucial technical levels. The frontline indices surged over one and half a percentage points from intraday lows to settle around the psychological 17,300 (Sensex) and 5,250 (Nifty) levels. After commencing the session on a sluggish note and trading below the neutral line for most part of the day, the stock indices rebounded in the second half following the encouraging leads from European markets. The Chinese manufacturing sector led the optimism in the market today. Furthermore, the European manufacturing sectors improved beyond expectations in January, raising optimism in the market that the euro-area region is on the right track to avoid slipping back into another phase of recession despite the two-year debt crisis. Investors kept piling up positions in late trade amid hopes that Europe will beat the escalating debt crisis, especially after the encouraging European summit and the improvement seen in fundamentals in addition to the better bond market. On the domestic front, the encouraging monthly sales numbers by auto majors like Tata Motors, Mahindra & Mahindra, TVS Motors and Maruti Suzuki, kept the rate sensitive automobile counter buzzing. Meanwhile, the overwhelming manufacturing PMI numbers which showed Indian manufacturing sector business conditions improved at fastest rate in eight months. The encouraging manufacturing sector data helped the Metal and Capital Goods counters gain additional traction which were instrumental in turning around the momentum of the benchmarks. Moreover, marketmen overlooked India’s foreign trade numbers which showed that trade deficit widened in December to $12.7 billion from $8.0 billion a year earlier as export growth slowed due to falling global demand.

Earlier on Dalal Street, the benchmark got off to a subdued start as investors remained cautious following mixed close on Wall Street after getting weaker than expected economic reports from the US. The equity indices kept moving in a tight range through the morning trades as investors chose to take some profits off the table after the recent sharp rally. After slipping to intraday lows in early afternoon trades the key gauges showed a swift trend reversal in tandem with European markets. The northbound journey only ended with the session’s close around the high point of the day. Eventually, the NSE’s 50-share broadly followed index Nifty, climbed around three fourth of a percent and settled  below the psychological 5,250 support level while Bombay Stock Exchange’s Sensitive Index - Sensex- amassed triple digit gains to close at the psychological 17,300 mark. The broader markets showed resilience in the session and comprehensively outclassed their larger peers with over a percent gain. On the BSE sectoral front, the Metal counter remained the leading gainer with close to 3% gains. The Capital Goods and Auto pockets too went home with over strong gains of over 2%. The Consumer Durables pocket on the other hand languished at the bottom of the table with over 1% cuts. The markets rebounded on good volumes of over Rs 1.21 lakh core while the turnover for NSE F&O segment remained on the higher side as compared to that on Tuesday at over Rs 0.96 lakh crore. The market breadth remained optimistic as there were 1868 shares on the gaining side against 980 shares on the losing side while 113 shares remained unchanged.

Finally, the BSE Sensex rose 107.03 points or 0.62% to settle at 17,300.58, while the S&P CNX Nifty up by 36.45 points or 0.70% to close at 5,235.70.

The BSE Sensex touched a high and a low of 17,327.21 and 17,061.55 respectively. The BSE Mid cap and Small cap indices were up by 1.12% and 1.71% respectively.

The major gainers on the Sensex were Jindal Steel up 6.43%, Tata Power up 6.02%, Hindalco Industries up 4.23%, Tata Steel up 4.11% and Hero MotoCorp up 3.45%. While, Coal India down 2.61%, ICICI Bank down 1.53%, ONGC down 1.32%, HDFC down 1.28% and Bharti Airtel down 1.04%, were the major losers on the index.

The top gainers on the BSE sectoral space were Metal up 2.97%, Capital Goods (CG) up 2.34%, Auto up 2.02%, Power up 1.62% and Realty up 1.00%, while Consumer Durables (CD) down 1.31%, PSU down 0.15%, IT down 0.11%, TECk down 0.10% and FMCG down 0.03% were top losers on the sectoral space.

Meanwhile, India's trade deficit in December 2011, widened to $12.7 billion as compared to $8.0 billion a year ago. Exports grew by a meager 6.7% to $25 billion, whereas imports were up to $37.7 billion, registering an increase of 19.8%. The slowdown in exports was expected, given the slackening of demand from the US and European markets.

According to the data released by the Commerce & Industry, the cumulative value of exports for the period April-December 2011-12 was $217.6 billion, up by 25.84%, given the better performance in the earlier two quarters. Cumulative imports were up by 30.37% to $350.9 billion for April-December 2011-12. As a result the cumulative trade deficit for the first three quarters of FY12 (April-December 2011-12) stood at $133.2 billion, which was 38.5% higher, than the deficit for the corresponding period last year.

Oil imports during December 2011, were at $10.2 billion which was 11.20% higher than in December 2010. Non-oil imports during December 2011 were estimated at $27.4 billion which was 23.38% higher than $22.2 billion in December, 2010. Cumulatively, during April-December 2011, oil imports stood at $105.5 billion, an increase of 40.3% as compared to the corresponding period last year. Non-oil imports rose by 26.5% to $245.3 billion for the same period.

The S&P CNX Nifty touched a high and low of 5,244.60 and 5,159.00 respectively.

The top gainers on the Nifty were Tata Power up 6.54%, Jindal Steel up 6.29%, Tata Steel up 5.12%, JP Associates up 4.65% and Hindalco up 4.64%.

On the flip side, Coal India down 2.95%, BPCL down 2.07%, ICICI Bank down 1.46%, Powergrid down 1.30% and ITC down 1.27% were the top losers on the index.

The European markets were trading in green as France's CAC 40 was up 1.43%, Britain’s FTSE 100 up 1.36% and Germany's DAX up by 1.87%.

Most of the Asian equity indices were modestly higher on Wednesday as encouraging Chinese manufacturing data tempered concerns over downbeat US economic reports, while earnings disappointments in Japan capped stocks there. Meanwhile, Taiwan stocks ended 0.43 percent higher, lifted by HTC Corp and defensive plays such as transportation and biotech. While, the Nikkei average held on to recent gains, edging up for the second session and brushing off worse-than-expected earnings from blue chips.

However, Hong Kong shares declined, dragged by weak Chinese banks after new loan growth in January cited in mainland media lagged figures reported earlier. China shares closed down 1.1 percent on Wednesday, led by large-cap shares, with investor sentiment weak.