Post Session: Quick Review

Indian markets went through a very volatile day of trade on Thursday, with major bourses losing track midway looked very close of snapping their gaining streak. The market mood that looked cautious since beginning lacking any major supportive cues, weakened going towards the second half of the trade and at one point of time, sudden profit booking dragged the markets lower by around a percent, however recovery followed soon and took the markets higher, and by the end major bourses surged to their intraday highs.

The global cues too remained unsupportive with US markets making mostly a negative end, while Lunar New Year holidays kept most of the regional markets away from the action, though the Japanese markets extending its gains surged to its fifteen months high. Some drag in local markets was induced by the soft start of the European markets, which fell from their seven years high led by decline in energy stocks. Meanwhile pressure mounted on Greece as US and European officials called on the government to reach a deal with its creditors.

Back home, the face saving spurt in final hours led the markets extend the winning streak for yet another day. Though, there were not any specific cues but the traders went for buying at the lower levels in anticipation of a reform-oriented budget to speed up growth and generate employment, after global rating agency Fitch said that it was expecting a slew of reforms in the upcoming Union Budget and any deviation from fiscal consolidation path could be a negative for its investment grade rating for India. Markets were also supported by strong buying in metal stocks, with companies getting coal mines allocated under the ongoing auction. Jindal Steel and Power surged over 25% on retaining its two coal blocks Gare Palma IV/2 and Gare Palma IV/3 in Chhattisgarh for a surprisingly low winning bid of Rs 108 per tonne. Coal from these blocks will primarily be linked to JSPL's 1000 MW Tamnar-1 power plant in Chhattisgarh. There was some cheer in the jewellery stocks as the Reserve Bank of India (RBI) permitted banks to resume lending against gold to jewellers. The RBI has also lifted the ban on imports of gold coins and medallions. PC Jewellers and Thangamayil Jewellery were by around 3%, Gitanjali Gems was up by over 3% and Titan Company gained by 1%. Shares of most of the frontline cement companies remained in somber mood after Ambuja Cement reported less-than-expected profit in its fourth quarter ended December 31, 2014 and as Minister of Road Transport and Highways Nitin Gadkari slamming the cement industry for indulging in cartelization said that he will be approaching Prime Minister Narendra Modi over the issue of cartelization by the cement industry.

The BSE Sensex ended at 29462.27, up by 142.01 points or 0.48% after trading in a range of 29108.15 and 29522.86. There were 20 stocks on gainers side against 10 stocks on the decliners side.The market breadth on BSE ended in negative, out of 2989 stocks traded,1380 stocks advanced, while 1507 stocks declined. (Provisional)

The broader indices managed a modestly positive close; the BSE Mid cap index was up by 0.04%, while Small cap index gained 0.10%.(Provisional)

The top gaining sectoral indices on the BSE were Metal up by 3.82%, Capital Goods up by 1.36%, Realty up by 1.06%, Power up by 0.86%, IT up by 0.79%, while FMCG down by 0.90%, Bankex down by 0.60% and Auto down by 0.01% were the losing indices on BSE.(Provisional)

The top gainers on the Sensex were Sesa Sterlite up by 6.95%, Hindalco up by 3.07%, Tata Power up by 2.56%, Tata Steel up by 2.29% and Mahindra & Mahindra up by 2.28%. On the flip side, Wipro down by 1.36%, Tata Motors down by 1.10%, ICICI Bank down by 1.08%, SBI down by 1.05% and ITC down by 0.87% were the top losers.(Provisional)

Meanwhile, amid the aggressive bidding by companies in the ongoing coal blocks auctions, which has made states, including Chhattisgarh, Jharkhand and West Bengal, richer by nearly Rs 60,000 crore from just 11 coal blocks sold so far, global rating agency Crisil has said that it can be credit negative, especially for the power sector.

The rating agency in a note said that “Participants at the ongoing e-auction of coal blocks for both regulated and unregulated sectors are facing difficult choices, as outcomes will redefine their cost structures and profitability in the short-term, even as they ensure fuel security and sourcing flexibility over the long term.”

It further warned that allocation of blocks will lead to a four-fold increase in captive coal availability to around 100 million tonne over the medium-term for the regulated power sector. Though, it will improve the plant load factors, but “aggressive bidding will be a credit negative.” It further said that the currently low plant load factors will improve, but the risk shifts to under-recovery in fuel cost, especially for developers with existing power purchase agreements.

Crisil also said that in the unregulated sector, steel and aluminium makers that win coal blocks will have a better handle on profitability than cement producers because coal accounts for a third of their production cost compared to 10-15 percent for the latter, the successful bidders will enhance backward integration of their projects and thereby improve business profile.

The CNX Nifty ended at 8895.30, up by 26.20 points or 0.30% after trading in a range of 8794.45 and 8913.45. There were 27 gainers against 23 decliners on the index.(Provisional)

The top gainers on Nifty were Jindal Steel & Power up by 25.75%, Sesa Sterlite up by 6.75%, Hindalco up by 3.03%, Tata Power up by 2.38% and Larsen & Toubro up by 2.12%. On the flip side, Bank of Baroda down by 2.54%, ACC down by 2.31%, Tech Mahindra down by 2.15%, Grasim Industries down by 2.10% and Ambuja Cement down by 1.87% were the top losers.(Provisional)

The only major Asian market trading today ‘Japanese stock exchange’ ended in green on Thursday, as data showed the country’s exports grew at the fastest annual pace since late 2013 as a weaker yen made it more competitive. Markets in China, Indonesia, Malaysia, Philippines, Singapore, Taiwan and South Korea were all shut on account of trading holiday. Japan’s annual exports in January jumped the most since late 2013 in an encouraging sign a weak yen is finally boosting the nation’s all-important export engine and helping the economy crawl out of recession. The 17% year-on-year gain in exports marked the fifth straight month of increase, supported by shipments of cars to the United States and of electronics parts to Asia. The ministry officials stated that exports are on a firm footing, adding that special factors helped boost shipments such as a rebound from last year’s Chinese New Year holidays which fell in January, and extreme cold weather which hit the US economy a year ago.

Japan’s index of leading economic indicators rose to a seasonally adjusted 105.6, from 105.2 in the preceding month while Japan’s All Industries Activity Index fell to a seasonally adjusted -0.3%, from 0.0% in the preceding month whose figure was revised down from 0.1%. Japan’s trade balance rose to a seasonally adjusted -0.41T, from -0.62T in the preceding month whose figure was revised up from -0.71T.

Nikkei 225 gained 65.62 points or 0.36% to 18264.79.