Post session - Quick review

Indian stocks extended their longest weekly run in 16 months on Monday tracing the positive global milieu after surprisingly robust U.S. jobs data heightened investor confidence about a turnaround in the world economy, while bolstering the outlook for foreign fund investments. The US Labour Department said the economy added 243,000 new jobs in January, the strongest job growth in nine months, that helped to push the unemployment rate down to 8.3% and the number of unemployed down to 12.8 million. This spurt, which propelled Dow Jones industrial average to clock its highest close since May 2008 on Friday, also shored up Asian equity indices beside’s the local ones. The Nasdaq closed at its highest level since December 2000.

However, the European markets remained a haul over the Indian equity markets as Greece remained a drag after a number of major conditions demanded by the 'Troika', representing Greece's European Union, European Central Bank and IMF lenders, were still outstanding. Athens must tell the EU by Monday whether they accept the stern terms of a new bailout deal. Without the deal, Athens would head for a disorderly default.

Back home, although the 30 share volatile index gave a picture of one side slide, but recuperation emerged which yanked the Index above its stiff support level of 17700 mark. High beta stocks, metals and realty, outperformed the broader indices. The realty index (4%) was the top gainer among all other groups of stocks on the Bombay Stock Exchange. While, banking stocks also saw buying interest. Three banking stocks - SBI, ICICI Bank and HDFC- contributed nearly 50 index points to the Sensex. However, the broader indices too went home with sparkling gain of over 1.25% each. 50 share’s widely followed index- Nifty-too after losing the crucial 5350 bastion, showcased dead cat bounce during the hours of the trade as the index clinched above the 5350 mark. ACC (5.74%) was the top gainer on the Nifty index followed by Ambuja Cement (5.22%), Siemens (4.01%), Cairn India (3.53%) and Jindal Steel (3.50%).

In stocks moving on news flow, Hindustan Unilever, the Indian unit of Anglo-Dutch Unilever Plc, beating market forecasts with an 18 percent jump in quarterly net profit, sent its shares up nearly 2 percent. Piramal Healthcare (3%) traded with big gains. The stock surged nearly 8% before seeing some correction. The company will acquire a further 5.5% stake in Vodafone India for Rs 3,007 crore, taking its stake to 11%.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1855:1044 while 108 scrips remained unchanged. (Provisional)

The BSE Sensex gained 115.37 points or 0.66% and settled at 17,720.33. The index touched a high and a low of 17,829.72 and 17,595.10 respectively. 22 stocks advanced against 8 declining ones on the index (Provisional)

The BSE Mid-cap index gained 1.31% while Small-cap index was up by 1.51%. (Provisional)

On the BSE Sectoral front, Realty up 4.05%, Capital Goods up 2.03%, Metal up 1.76%, PSU up 1.49% and Bankex up 1.35% were the top gainers while Health Care down 0.27% was the only losers. (Provisional)

The top gainers on the Sensex were Jindal Steel up 3.71%, SBI up 2.94%, BHEL up 2.67% L&T up 2.23% and TCS up 2.19%.(Provisional)

On the flip side, Tata Power down 3.74%, HUL down 3.28%, Sun Pharma down 2.02%, RIL down 0.48% and Gail India down 0.31% were the top losers in the index. (Provisional)

Meanwhile, to help the ailing airline industry, a Group of Ministers (GoM) is likely to meet later this week to discuss the issues concerning the aviation sector. The GoM is likely to take a decision on investments limits in Indian carriers by foreign airlines, direct import of jet fuel by Indian carriers and Air India's financial restructuring plan. There is a common consensus on the fact that the ailing Indian aviation industry needs assistance to come out of its financial debt. It had been suggested that the government should allow foreign investments by international carriers in the Indian airline industry to help the industry to survive the current financial crisis.

Earlier, foreign airlines were not allowed to invest in Indian airlines though foreign direct investment (FDI) of up to 49% was allowed. A Committee of Secretaries has proposed a 49% cap on FDI by foreign airlines. But earlier, the Civil Aviation Ministry had suggested 24%, while the Department of Industrial Policy and Promotion (DIPP) had recommended 26%. At present, foreign investment of up to 49% is permitted in the aviation sector, apart from 100% in MRO (maintenance, repair and overhaul), airports, helicopter and sea-plane operations, but foreign carriers are not allowed to invest.

Another topic of discussion would be the direct import of jet fuel by Indian carriers. The expenditure on jet fuel accounts 40-50% of an airline’s total operational cost and the airlines have demanded that they be allowed to import fuel to escape the heavy sales tax levied by states. The petroleum ministry is understood to have raised objections to the proposal but the Committee of Secretaries is said to have recommended the direct import.

The GoM shall also be discussing, the cash-strapped, Air India’s financial restructuring plan (FRP) and turnaround plan (TAP). A decision on injecting additional equity into the national carrier is also likely to be taken up. The debt-ridden carrier has outstanding loans and dues worth Rs 67,520 crore, of which Rs 21,200 crore is working capital loan, Rs 22,000 crore is long-term loan on fleet acquisition, Rs 4,600 crore is vendor dues besides an accumulated loss of Rs 20,320 crore, according to official figures.

A panel of secretaries has recommended that Rs 23,000 crore be infused into the cash-strapped national carrier over the next 10 years, of which Rs 6,600 crore could be injected in the current fiscal ending March 31. As per its aircraft acquisition plans, Air India has already placed orders for 27 Boeing 787 Dreamliners and decided to take them on sale and leaseback mode. Under the leaseback mode, an airline purchases aircraft from the manufacturer and sells them to a leasing company and then gets the planes back on lease. This erases the aircraft purchase debt from the airline’s books. The first of these planes are expected to be delivered by March. 

India VIX, a gauge for market’s short term expectation of volatility gained 2.20% at 24.62 from its previous close of 24.09 on Friday. (Provisional)

The S&P CNX Nifty gained 30.15 points or 0.57% to settle at 5,356.00. The index touched high and low of 5,390.05 and 5,327.25 respectively. 34 stocks advanced against 16 declining ones on the index. (Provisional)

The top gainers on the Nifty were ACC up 5.74%, Ambuja Cement up 5.22%, Siemens up 4.01%, Cairn India up 3.53% and Jindal Steel up 3.50%.

On the other hand, Tata Power down 4.26%, HUL down 3.20%, Sun Pharma down 2.03%, Dr. Reddy’s Lab down 1.73% and Reliance Infrastructure  down 1.71.% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 1.14%, Germany's DAX down 0.57% and Britain’s FTSE 100 down 0.45%.

Sentiments remained jubilant in Asian region and most of the indices snapped the session in the positive terrain on Monday, tracking gains on Wall Street after strong US jobs data but worries about Greece’s unresolved debt crisis capped the gains. A strong US jobs report for January sent Wall Street soaring on Friday as investors celebrated a surge that pointed to new vitality in a fragile recovery for the world's biggest economy. Meanwhile, Hong Kong shares snapped a two-session winning streak on Monday, falling back from early gains after benchmark indexes met chart resistance as investors took profit on some of last week's outperformers. While, mainland markets were mostly flat, with the Shanghai Composite Index closing up 0.03 percent at 2,331.14 after meeting downward trend line resistance at about 2,340-2,360.