Post Session: Quick Review

Extending their gaining streak for fifth consecutive session, local equity markets ended into positive territory on Monday, although with slender gains of around one tenth of a percent that lifted both Sensex and Nifty higher above psychologically crucial 29,050 and 8,800 levels respectively. However, markets surrendered most of their early gains in the last hour of trade mainly on the back of subdued start of European equities, while profit-booking by participants ahead of holiday also weighed on the sentiment. Markets remain shut on Tuesday .i.e. February 17 on account of ‘ Mahashivratri’. Nevertheless, mood remained upbeat after annual rate of inflation, based on monthly wholesale price index (WPI) ebbed way below street expectation at -0.39% in January as compared to 0.11% in December on the back of sharp correction in oil prices. Sentiments were bolstered after Prime Minister Narendra Modi, just a fortnight ahead of Union Budget assured more reforms as he rolled out the red carpet to investors, especially the multinationals.

On the global front, Most Asian stocks gained on Monday in morning trade following a record close on Wall Street as data showed Japan’s economy exited recession. Gross domestic product grew at an annualized 2.2% in the three months through December, government data showed Monday, undershooting street’s forecast for a 3.6% rise. Meanwhile, European shares  taking a breather following last week’s sharp gains were trading into negative territory as investors awaited the euro zone finance minister’s meeting in Brussels to see if common ground would be found with Greece’s new government.

Closer home, most of the sectoral indices on BSE concluded into positive territory, nevertheless maximum buying was witnessed by stocks from FMCG, Realty and Power counters. On the flip side, stocks from Banking, Consumer Durables and Oil & Gas counters were the top losers of the session. Healthcare stocks tanked after shares of Sun Pharma slipped over 3% on Monday after its December quarter profit declined. The drug major reported a 6.92 percent fall in its consolidated net profit at Rs 1425.07 crore for the third quarter ended December 31 2014. Net sales of the company fell to Rs 4279.54 crore for the quarter under consideration, as against Rs 4286.59 crore during the same period of previous fiscal. The overall market breadth on BSE was in the favour of decliners, which thumped advances in the ratio of 1303:1601, while 103 shares remained unchanged (Provisional).

The BSE Sensex ended at 29127.63, up by 32.70 points or 0.11% after trading in a range of 29083.40 and 29325.35. There were 16 stocks advancing against 14 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.02%, while Small cap index up by 0.03%. (Provisional)

The gaining sectoral indices on the BSE were FMCG up by 1.84%, Realty up by 0.92%, Power up by 0.74%, Infrastructure up by 0.66%, Auto up by 0.51% while, Bankex down by 1.12%, Consumer Durables down by 1.00%, Oil & Gas down by 0.95% and Healthcare down by 0.92% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 3.20%, Bharti Airtel up by 1.79%, TCS up by 1.71%, Tata Motors up by 1.64% and Hindustan Unilever up by 1.48%. On the flip side, Sun Pharma down by 2.77%, ICICI Bank down by 1.79%, Hindalco down by 1.73%, Hero MotoCorp down by 1.68% and Axis Bank down by 1.60% were the top losers. (Provisional)

Meanwhile, for the first time since late 2009, the annual rate of inflation, based on monthly wholesale price index (WPI) came below 0 at -0.39% in January, as compared to 0.11% in December on the back of sharp correction in oil prices.

Street was widely expecting the inflation to inch up to 0.15% for the month under review. Meanwhile, November inflation has been revised to -0.17% from 0% earlier. Build up inflation rate in the financial year so far was -1.11% compared to a build up rate of 5.23% in the corresponding period of the previous year.  Wholesale Price Index for 'All Commodities' (Base: 2004-05 = 100) for the month of January, 2015 declined by 0.8% to 178.3 (provisional) from 179.8 (provisional) for the previous month.

The moderation in WPI inflation was broad based and primarily driven by lower prices of fuels and manufacturing products. Fuel & Power index, which occupies 14.91% in the overall index, declined by 2.5% to  189.7 (provisional) from 194.6  (provisional) for the previous month due to lower price of aviation turbine fuel (14%), furnace oil (6%) and petrol and high speed diesel (4% each).

The index of manufactured products which contributes to majority 64.97% of the overall index weight declined by 0.3% to 154.5 from 154.9. Besides, the index of Primary Articles declined by 1.0% to 246.6 (provisional) from 249.0 (provisional) for the previous month.  Meanwhile, the index of Primary Articles declined by 1% to 246.6 from 249.0 for the previous month.

India had been struggling with high inflation in the summer - when the WPI has been hovered above 5 per cent for 14 straight months - but since oil prices began falling the index has been cooling down. The latest data comes as encouraging development for the economy as India's central bank governor won't have to look hard for green light to cut interest rates again. Raghuram Rajan slashed interest rates at an unscheduled meeting in Januaryh, but he held steady two weeks ago due to uncertainty over the direction of prices.

India VIX, a gauge for markets short term expectation of volatility rose 3.59% at 20.82 from its previous close of 20.10 on Friday. (Provisional)

The CNX Nifty ended at 8809.35, up by 3.85 points or 0.04% after trading in a range of 8793.40 and 8870.10. There were 24 stocks advancing against 26 stocks declining on the index. (Provisional)

The top gainers on Nifty were ITC up by 3.06%, NMDC up by 2.56%, TCS up by 1.81%, Bharti Airtel up by 1.79% and Hindustan Unilever up by 1.59%. On the flip side, Sun Pharma down by 2.74%, Axis Bank down by 1.86%, Hindalco down by 1.69%, ICICI Bank down by 1.69% and Hero MotoCorp down by 1.68% were the top losers. (Provisional)

European Markets were trading mostly in the green; UK's FTSE 100 was down by 0.77% and Germany's DAX was down by 0.54%, while France's CAC was up by 0.01%.

The Asian indices ended mostly in green on Monday, as Japan posted growth in the fourth quarter albeit at a slower pace than expected, but managed to exit recession. Japan’s economy rebounded from recession in the final quarter of last year but growth was weaker than expected as household and corporate spending disappointed, underlining the challenges premier Shinzo Abe faces in shaking off decades of stagnation. The annualized 2.2% expansion in October-December was smaller than a 3.7% increase forecast, suggesting a fragile recovery, as the hangover from last year’s sales tax hike lingered. Japan’s GDP rose to a seasonally adjusted 0.6%, from -0.6% in the preceding quarter whose figure was revised down from -0.5%. The preliminary reading for gross domestic product (GDP), which translates into a quarter-on-quarter increase of 0.6%, follows two straight quarters of contraction.

Foreign direct investment (FDI) in China grew at its strongest pace in nearly four years in January, surging 29.4% from a year earlier to $13.9 billion as investors largely shunned the troubled manufacturing sector and focused on the more resilient services industry. Indonesia posted a higher-than-expected trade surplus in January as global oil prices slumped. Southeast Asia’s biggest economy saw exports slide 8.09% on-year to $13.30 billion and imports sank 15.59 percent to $12.59 billion.