Late recovery helps benchmarks regain ground lost in previous session

Indian frontline equity indices staged a smart bounce back after hitting lowest point in the session in late hours of trade and recovered around half a percentage point to finish in the positive territory with moderate gains. The late rebound in sentiments came as investors grew increasingly hopeful that further external aid will soon be transferred to Greece helping to avoid a more disorderly default in the near term. On a day when all the Asian markets stood tall with significant gains, Indian stocks indices failed to mirror similar strength and settled on a dull note. Despite repeated attempts to claw beyond the psychological 5,400 (Nifty) and 17,800 (Sensex) mark, the levels are proving as tough nuts to crack for the frontline indices. Nonetheless, the sentiments continue to remain positive thanks to the hefty buying interests evident largely across the board. The metal index shone brightly over one and half a percent gains on the back of reports that a Supreme Court panel has recommended for cancellation of 123 iron ore leases, which would be up for grab for steel companies. Meanwhile, sugar stocks like Shree Renuka, Bajaj Hindusthan along with rice stocks like Kohinoor Foods rallied in the session after EGoM approved export of one million tonnes of sugar. It also okayed further export of non-basmati rice up to 4 million tonnes and reduction of MEP (minimum export price) of basmati rice to $700 a tonne from $900 a tonne. Besides, the telecom major Bharti Airtel and oil bellwether ONGC plummeted in the session after announcing weaker than expected numbers for third quarter. On the global front, Asian markets exhibited sanguine trends while the European stock markets too traded on a positive note after encouraging earnings announcements by blue-chip companies.

Earlier on Dalal Street, the benchmark got off to a positive opening tracking supportive leads from Asian markets. After trading on a flat note for some time the bourses managed to capitalize on the momentum in mid morning trades on broad based buying. The key gauges touched the highest point in session with the 30-share Sensex even breaching crucial 17,800 levels but sudden hefty bouts of profit booking dragged the index into the negative territory in the last leg of trade. However, bulls had the last say in the day as they pulled back the markets and ensured that the losing streak does not extend for second straight session. The NSE’s 50-share broadly followed index Nifty climbed over half a percent to settle above the crucial 5,350 support level, while Bombay Stock Exchange’s Sensitive Index or Sensex gained little under a hundred points and ended above the psychological 17,700 mark. Moreover, the optimism in broader markets remained intact through the day, which helped the indices settle on a strong note with around a percent gains, outperforming their larger peers. On the BSE sectoral space, Consumer Durables counter remained top gainer in the space with gains of three percent while the high beta Realty and IT sectors finished with handsome gains. On the flipside, only the defensive-FMCG and rate sensitive Bankex indices failed to keep their heads above the water and slipped marginally. The markets climbed on strong volumes of over Rs 1.55 lakh core while the turnover for NSE F&O segment remained on the higher side as compared to that on Tuesday at over Rs 1.22 lakh crore. The market breadth remained optimistic by the end as there were 1,723 shares on the gaining side against 1,157 shares on the losing side while 108 shares remained unchanged.

Finally, the BSE Sensex gained 84.87 points or 0.48% to settle at 17,707.32, while the S&P CNX Nifty rose by 33.00 points or 0.62% to close at 5,368.15.

The BSE Sensex touched a high and a low of 17,809.21 and 17,579.59 respectively. The BSE Mid cap and Small cap indices were up by 1.45% and 0.89% respectively.

The major gainers on the Sensex were Hindalco Industries up 4.92%, Gail India up 3.18%, DLF up 2.97%, Coal India up 2.29% and Hero MotoCorp up 2.22%. While, Bharti Airtel down 6.58%, ICICI Bank down 1.81%, ONGC down 1.29%, Cipla down 0.62% and ITC down 0.49%, were the major losers on the index.

The top gainers on the BSE sectoral space were Consumer Durables (CD) up 3.00%, Realty up 2.91%, IT up 1.68%, Metal up 1.61% and Power up 1.39%, while Health Care (HC) down 0.14% and Bankex down 0.13% were top losers on the sectoral space.

Meanwhile, passenger cars have recorded a growth 7.2% in January 2012 as compared to the same month last year. Commercial vehicles grew by 13.52% and the growth figures for two wheelers stood at 13.63% in January 2012 as compared to January 2011. Three wheelers however, registered de-growth at (-) 3.49% in January, as per the data released by Society of Indian Automobile Manufacturers (SIAM).

Passenger cars saw the third consecutive monthly rise in this fiscal. Car sales had been registering a decline in sales since July 2011 after registering a 30% growth in the year ending March 2011. However, the growth in November-January is unlikely to make up for the losses suffered earlier unless sales grow in February-March at 10-12%. Since this is unlikely to happen, the auto industry will miss the sales projection for FY12. The industry had forecasted an increase in sales by 0-2% in FY12.

The overall sales growth rate recorded for April-January 2012 was 12.51%. Passenger vehicles segment recovered marginally at 1.45% during April-January 2012 over same period last year. Passenger cars recorded de-growth of (-) 1.19%, Utility Vehicles grew by 13.03% and Vans grew by 8.40% in this period. And growth in overall passenger vehicles was at 8.86% in the month of January 2012.

Indian car sales are mainly driven by a rapidly expanding middle class that is typically reliant on loans for purchases. This makes the car industry too sensitive to interest rates. Since interest rates are unlikely to come down in the near future, the car industry is not optimistic of meeting its forecasted growth. SIAM, however, expects vehicle sales to increase by 11-13% in the fiscal year starting on April 1, if the Reserve Bank of India begins to ease interest rates soon. The central bank had raised interest rates 13 times since March 2010 in its battle against stubborn inflation.

Growth in sales of commercial vehicles, seen as an indicator of economic activity, stood at 13.52% in January 2012 as compared to January 2011. The overall commercial vehicles segment registered growth of 18.63% during April-January 2012 as compared to the same period last year. Motorcycle sales, which have remained strong over the past year, rose by 10.51% last month. The increase is less than SIAM's growth rate forecast of 13-15% for the current fiscal year. During April-January 2012, motorcycles grew by 13.66%.

The cumulative production data for April-January 2012 shows overall production growth of 14.56% over same period last year. Production in January 2012 registered growth of 11.25% as compared to January 2011. On the export front, overall automobile exports registered a growth rate of 28.36% during April-January 2012. Passenger Vehicles registered growth at 20.64% in this period. Two Wheelers, Commercial Vehicles and Three Wheelers segments recorded growth of 28.52%, 27.60% and 39.70% respectively during April-January 2012. In January 2012 compared to January 2011, overall automobile exports registered a growth of 22.93%.

The S&P CNX Nifty touched a high and low of 5,396.90 and 5,325.20 respectively.

The top gainers on the Nifty were Reliance Infra up 7.59%, Hindalco up 5.40%, JP Associates up 4.10%, GAIL up 3.80% and DLF up 3.48%.

On the flip side, Bharti Airtel down 6.81%, ICICI Bank down 2.06%, ONGC down 1.15%, SAIL down 0.99% and Kotak Bank down 0.82% were the top losers on the index.

The European markets were trading in green as France's CAC 40 was up 0.41%, Britain’s FTSE 100 up 0.17% and Germany's DAX up by 0.58%.

Asian stock markets climbed on Wednesday, helped by signs of progress over debt restructuring talks in Greece, while the Tokyo market tapped a three-month high as Toyota Motor surged. Earlier, Asian markets took a lead from Wall Street, which ended higher on Tuesday on hopes for action on the euro-zone’s debt crisis and growing optimism that a stronger US job market signalled a recovery for the world's number one economy.

The optimistic mood in markets sent the Seoul’s benchmark Kospi index up to a six-month high of 2,003.73. However, the gains were capped ahead of Thursday’s options expiry. While, Hong Kong shares hit a six-month high, led by Chinese oil, property and material names, but gains were capped by chart resistance. Meanwhile, Japanese Nikkei closed above the 9,000-mark for the first time in 3 months, boosted by profit outlook from Toyota Motor Corp and optimism over US economic growth.