Post Session: Quick Review

Indian markets after showing consolidation for most part of the day on Thursday, regained their momentum in final hours to close near the intraday highs, making it third straight session of gains. The trade that started on an optimistic note despite weak global cues got impacted by profit taking in the very first hour with traders remaining on sidelines ahead of the two key macro data. Today, the government will be announcing a new series of Consumer Price Index (CPI) with 2012 as base year for computing retail inflation; the change has been effected in order to present a better picture of the price situation in the country. The CPI data for January is likely to be in the range of 5.3 to 5.8 percent, against 5 percent reported in December. On the other hand the index of industrial production (IIP) data is likely to come lower at around 2 percent, against 3.8 percent on a month-on-month basis. After first hour of trade there was hardly any serious effort to take the markets into green.

The global cues were not very encouraging and after a flat closing of US markets overnight, the Asian markets snapped the session a mixed note after the Euro-area finance ministers, who met for six hours last day went without signing off on any conclusions, though they will return on February 16 to Brussels to try to end the deadlock. However, the European markets, erasing an earlier drop moved higher, as Credit Suisse Group AG and Renault SA rallied after reporting earnings.

Back home, the market mood made a wild swing in the final hours with the sluggish trade suddenly turning jubilant and lots of high beta stocks surging in the last, taking the benchmarks higher by about a percent each with Nifty reclaiming 8700 level and Sensex ending over 28800 mark. Banking, metal and oil & gas sector stocks that had been restricting the market from moving higher in early deals spurted and pulled the markets higher along with power healthcare and capital goods stocks. Though, most of the sectoral indices ended in green on BSE, there were some individual stock movements that kept the markets in action, Pipavav Defence & Offshore Engineering surged over 5 percent on reports that Mahindra & Mahindra is planning to buy around 25-30 percent stake in the company for an aggregate amount of Rs 3,000 crore in a three phase, Pipavav management though denied the report. On the same time JSPL giving up all its early gains ended lower by around 3 percent. A Delhi High court bench hearing on the plea of Jindal Steel & Power (JSPL), took out Utkal B1 and B2 blocks and Gare Palma IV/6, from the auction process. Anil Ambani companies too remained in action, Reliance Power and Government of Rajasthan signed an MoU to develop a 6,000 MW solar park in the state. Reliance Infrastructure rallied over 4 percent after the company announced that it plans to foray into the defence sector for growth opportunities.

The market breadth on BSE was positive, out of 2971 stocks traded, 1610 stocks advanced, while 1231 stocks declined on the BSE.(Provisional) 

The BSE Sensex ended at 28805.10, up by 271.13 points or 0.95% after trading in a range of 28406.25 and 28838.52. There were 23 stocks on the gainers side against 7 stocks on the declining side.(Provisional) 

The broader indices outperformed the benchmarks; the BSE Mid cap index was up by 1.13%, while Small cap index up by 1.27%.(Provisional) 

The top gaining sectoral indices on the BSE were Power up by 2.51%, Capital Goods up by 2.33%, Auto up by 1.47%, INFRA up by 1.32%, Realty up by 1.28% while, FMCG down by 0.16% was the lone losing sectoral index on BSE.(Provisional) 

The top gainers on the Sensex were Dr. Reddys Lab up by 5.88%, BHEL up by 5.02%, Cipla up by 3.99%, GAIL India up by 2.81% and Larsen & Toubro up by 2.47%. On the flip side, Hindustan Unilever down by 1.39%, Bajaj Auto down by 1.13%, Coal India down by 1.01%, Bharti Airtel down by 0.84% and ITC down by 0.50% were the top losers.(Provisional) 

Meanwhile, Union Coal Minister Piyush Goyal after the Delhi High Court asked for removal of three coal blocks from the auction list, has said that the government respects the ruling and assured that the auction process would not be delayed. The court orders were seen as big blow to the government, planning an early coal block auction, though Coal secretary Anil Swarup asserted that this was not a setback to the auction process as these blocks were not part of the 23 being bid out in the first phase.

Earlier, a Delhi High court bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva hearing on the plea of Jindal Steel & Power (JSPL) which had challenged the government decision to change the end use for the Utkal B1 coal block in Odisha and Gare Palma IV/6 in Chhattisgarh to power from steel, took out Utkal B1 and B2 blocks and Gare Palma IV/6, from the auction process, saying that while changing end-use of these blocks to power sector, the aspect of its adverse impact on steel sector has not been considered. The government on its part had contended that end-use of both blocks was changed in view of the energy security of the country. JSPL had been allocated Utkal B1 for operating a steel unit and Gare Palma IV/6 for a sponge iron industry.

The court disagreeing with the government's reason for changing end-use, said the expression “energy security of the country” refers to the coal reserves and not to the power sector and added that power can be generated through various other sources - water, wind, nuclear, solar, etc. The High Court Bench  also directed the committee, which had been set up to classify coal blocks as well as formulate criteria for their auction and allotment, to review its decision to merge Utkal B1 and B2, saying 'there was no application of mind'.

The CNX Nifty ended at 8711.55, up by 84.15 points or 0.98% after trading in a range of 8599.25 and 8732.55. There were 36 stocks advancing against 14 stocks declining on the index.(Provisional) 

The top gainers on Nifty were Dr. Reddys Lab up by 5.67%, BHEL up by 4.80%, Zee Entertainment up by 4.54%, Cipla up by 3.80% and Ambuja Cement up by 3.53%. On the flip side, Jindal Steel & Power down by 2.94%, Asian Paints down by 2.02%, PNB down by 1.57%, Hindustan Unilever down by 1.39% and BPCL down by 0.99% were the top losers.(Provisional) 

European markets were trading in green in early deals, UK’s FTSE 100 was up by 26.02 points or 0.38% to 6,844.19, France’s CAC added 33.97 points or 0.73% to 4,713.35 and Germany’s DAX was up by 126.98 points or 1.18% to 10,879.09.

The Asian indices ended mostly in green on Thursday, despite weak lead from Wall Street and caution over the ongoing Greek debt negotiations. Japanese Prime Minister Shinzo Abe and his economic ministers piled pressure on companies to raise wages to sustain growth as the economy climbs out of a recession triggered by a sales tax increase last year. Wage growth is key to Abe’s aim of generating a virtuous cycle of higher corporate profits, wages, consumption and investment to reflate the economy, and break a two-decade cycle of tepid growth and deflation. Japanese Economics Minister Akira Amari stated that the country is making steady progress beating deflation despite a recent collapse in oil prices.

Japan’s Core Machinery Orders rose to 8.3%, from 1.3% in the preceding month while Japan’s Corporate Goods Price Index fell to a seasonally adjusted annual rate of 0.3%, from 1.9% in the preceding month. Malaysian GDP rose to a seasonally adjusted 5.8%, from 5.6% in the preceding month. Indonesia’s central bank is likely to maintain a tight-bias policy this year despite an easing in inflation amid a global economic slowdown. But external risks such as an imminent policy rate hike by the US Federal Reserve later this year, will still keep Bank Indonesia on edge for the time being.