Benchmarks end near day’s high; bulls wake-up in late trade

Thursday’s session turned out to be a fabulous day of trade for the Indian equity markets, where frontline gauges garnered gains of around one percent. Hectic buying activity which took place during last leg of trade mainly drove the markets higher, with frontline gauges ending at intraday high levels, recapturing their crucial 28,800 (Sensex) and 8,700 (Nifty) bastions. Earlier, domestic bourses traded listless for most part of the day as investors remained wary ahead of the important macro data, Industrial production (IIP) data for December 2014 and data for inflation based on combined consumer price index (CPI) for January 2015, which are slated to be announced later in the day. While the IIP data may come flat, the CPI data for the month of January is likely to rise. Report that foreign portfolio investors (FPIs) sold shares worth a net Rs 371.27 crore on Wednesday, too weighed down sentiments.

However, sentiments took U-turn in last hour of trade as market-participants opted to take positions in beaten down but fundamentally strong stocks. Sentiments also turned up-beat after global credit rating agency Moody’s Investors Service said the lower oil prices are expected to alleviate India’s high inflation and spur economic growth. Some support also came with a private study of MasterCard consumer confidence index, which has said that India is the second most optimistic nation among the Asia Pacific Region after Myanmar, scoring 91.6 in the index which is calculated with zero as the most pessimistic and 100 as the most optimistic.

Positive opening in European counters too supported the sentiments. CAC, DAX and FTSE all indices were trading in the green terrain in early deals, with investors focusing on a big batch of quarterly results from companies, including EDF, Rio Tinto and Credit Suisse. Asian markets ended mostly in the green despite caution over the ongoing Greek debt negotiations.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Meanwhile, surge in Auto stocks too supported the sentiments after the Society of Indian Automobile Manufacturers (SIAM) said that it expects passenger vehicle sales to rise three to five per cent in 2014-15, up from its earlier projection of one-two per cent, on improved consumer sentiment over the past few months. Additionally, software and technology counters continued to trade jubilantly for second straight day after Nasscom, the IT industry body in its latest forecast said that IT sector are expected to grow at 13 percent this fiscal year 2014-15, and estimated that it would be between 12 percent and 14 percent in the coming year, lower than its own previous forecast.

The NSE’s 50-share broadly followed index Nifty ended higher by over eighty points to end above its psychological 8,700 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex edged higher by over two hundred and seventy points to regain the psychological 28,800 mark. The broader markets too were traded in-line with benchmarks and ended the session with a gain of over one percent. The market breadth remained in favour of advances, as there were 1,616 shares on the gaining side against 1,229 shares on the losing side while 126 shares remain unchanged.

Finally, the BSE Sensex surged by 271.13 points or 0.95% to 28805.10, while the CNX Nifty gained 84.15 points or 0.98% to 8711.55.

The BSE Sensex touched a high and a low of 28838.52 and 28406.25, respectively. The BSE Mid cap index was up by 1.13%, while Small cap index was up by 1.27%.

The top gainers on the Sensex were Dr. Reddys Lab up by 5.49%, BHEL up by 4.98%, Cipla up by 4.07%, GAIL India up by 3.23% and Maruti Suzuki up by 2.51%. On the flip side, Hindustan Unilever down by 1.53%, Bajaj Auto down by 1.37%, Bharti Airtel down by 1.01%, Coal India down by 0.78% and SBI down by 0.56% were the top losers.

The top gaining sectoral indices on the BSE were Power up by 2.51%, Capital Goods up by 2.33%, Healthcare up by 1.69%, Auto up by 1.47% and Infrastructure up by 1.32% while, FMCG down by 0.16% was the lone losing index on BSE.

Meanwhile, a MasterCard Index of Consumer Confidence survey has stated that India is the second most optimistic nation among the Asia Pacific Region after Myanmar. India scored 91.6 in the index which is calculated with zero as the most pessimistic and 100 as the most optimistic, while Myanmar's score was 97.2. The Index is based on a survey conducted between October-November last year and covered 8,235 respondents aged 18 - 64 in 16 countries across Asia Pacific.

The survey tracks five major indicators - employment, economy, regular income, stock market and quality of life. Among these parameters, India rated the highest in its outlook toward employment prospects with a score of 93.5 points in the second half compared to 88.5 points recorded in the first half of the calendar year 2014. Overall, in the first half of 2014, India figured in the very optimistic range with a total score of 89.1.

Citywise Bengaluru topped the list as India's most optimistic city with a score of 98.1 followed by Delhi with 97.3 points and Mumbai with 87.2. Further, the study noted that the women of the country have a more confident stance on the economic outlook with a score of 91.9, 0.6 points ahead of men.

The overall sentiment in Asia witnessed a drop with the consumer confidence index score at 65.5 points down from 68.3 Index points in the first half of 2014. Taiwan, Japan and Hong Kong saw a steep decline in consumer confidence at 33.8, 34.2 and 40.9 respectively.

The CNX Nifty touched a high and low of 8732.55 and 8599.25 respectively.

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.

European Markets were trading in the green; Germany’s DAX was up by 1.34%, France’s CAC gained 0.75% and UK’s FTSE 100 was higher by 0.42%.

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.