Post session - Quick review

Resilience seems to be the name of the game at Dalal Street as benchmark equity indices rallying for the third consecutive session of the week, delivered heart throbbing performance. Frontline indices after dilly-dallying for the entire trading session, protracted its two session’s up move to the third one, as widely followed 50 share index of National Stock  Exchange -Nifty- surpassed through its crucially psychological level of 5,400, which was last  seen on August 3, 2011. However, even, the 30 share benchmark index of Bombay Stock Exchange -BSE- pierced through its 17,800 level. The rally, which was assumed to be liquidity driven, now makes one believe that India’s growth story still remains intact and viable. Investors in today’s trading session positioned themselves for a possible successful resolution to Greek bailout talks and hoped for a promise of easier access to liquidity from the European Central Bank after Greek Prime Minister Lucas Papademos and three party leaders’ agreed on all the points of the program with the exception of one which requires further elaboration and discussion with the so-called troika of lenders.  

On the global front, Asian pacific markets failed to provide any guidance as the regional indices there exhibited a mixed close. Investor sentiment hit a hurdle after China released data showing consumer prices had risen 4.5% in January over a year earlier, up from the previous month's 4.1%. Food prices jumped 10.5%, driven by a 25% gain in the cost of pork, the staple meat in China. The higher inflation number diminished expectations of more near-term monetary easing measures from Beijing, leaving many market observers now expecting a delay to a much anticipated reserve requirement ratio cut.

However, the European shares advanced before the European Central Bank and the Bank of England announce policy decisions and as Greek leaders debate an austerity package. Greece faces a 14.5 billion-euro bond payment on March 20 and is struggling to secure financing to avert a collapse of the economy.

Back home, Indian equity markets showcased downbeat trend in the morning deals as investors adopted a wait and watch mode ahead of euro-zone finance ministers’ emergency meeting on Greek austerity deal. Investors were stunned after Greek leaders failed on Thursday to agree on a reform and austerity programme, the price of a financial bailout to avoid a messy default, forcing Finance Minister Evangelos Venizelos to go to the country's financial backers with an incomplete deal. However, markets staged a relatively positive spin after Greek Finance Minister Evangelos Venizelos said he hoped they would make a ‘positive decision’ on a new loan package. On the BSE Sectoral front, stocks from interest rate sensitive such as Realty, Bankex and Auto combined with Metal counters did their most for the bourses’ spurt.

However, stocks from Oil & Gas, Capital Goods and Healthcare counters gave investors a run for their money. Shares in real estate companies were up on expectations of a pick-up in deal flows and a fall in interest rates, which would benefit both builders and real estate buyers. Stocks of Housing Development and Infrastructure (HDIL), Puravankara Projects, Oberoi Realty and Unitech were up 4.5-10%.

Thus after day of toil, Nifty and Sensex concluded above their crucial psychological level of 5,400 and 17,800 mark respectively. However, the broader indices showcasing their consistent performance for yet another session piped frontline indices as they went home with colossal gains of over 1% each. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1739:1127 while 143 scrips remained unchanged. (Provisional)

The BSE Sensex gained 160.05 points or 0.90% and settled at 17,867.37. The index touched a high and a low of 17,879.46 and 17,609.4 respectively. 17 stocks advanced against 13 declining ones on the index. (Provisional)

The BSE Mid-cap index gained 1.25% while Small-cap index was up by 1.19%. (Provisional)

On the BSE Sectoral front, Bankex up 2.22%, Metal up 2.09%, Auto up 1.69%, Realty up 1.60% and IT up 1.40% were the top gainers while Oil & Gas down 0.11% and Health Care down 0.05% were the only losers.

The top gainers on the Sensex were Tata Power up 4.03%, Sterlite Industries up 3.99%, Jindal Steel up 3.96%, Bajaj Auto up 3.58% and HDFC Bank up 3.35%.

On the flip side, Sun Pharma down 1.35%, DLF down 1.19%, Hindalco Industries down 1.15%, L&T down 0.96%, and Gail India down 0.91% were the top losers in the index. (Provisional)

India VIX, a gauge for market’s short term expectation of volatility lost 3.99% at 23.30 from its previous close of 24.27 on Wednesday. (Provisional)

Meanwhile, exports from the Special Economic Zones (SEZs) during April-December 2011, registered an increase of 17% year-on-year (y-o-y) to Rs 2.60 lakh crore. On the other hand, for the financial year 2010-11, the total exports from the tax-free zone stood at Rs 3.15 lakh crore, a growth of 43.11% over the same period previous year. Further, shipments from Export Oriented Units (EOUs) have contributed 34% to the country's total exports in 2010-11.

Investments worth Rs 2.49 lakh crore had been made in SEZs and direct employment of 815,308 persons had been generated as on December 2011. These facts were stated by the Chairman of Export Promotion Council for EOUs and SEZs (EPCES), Jatin R. Mehta. He stated that EOUs and SEZs are engines of economic growth and urged the Finance Minister, Pranab Mukherjee, to restore exemption from minimum alternate tax (MAT) for SEZ units and developers since it was felt that the imposition of MAT on SEZs had led to a fall in investments. The EPCES also asked the finance minister to revamp the EOU scheme by favorably considering the recent recommendations of a government panel.

The government had granted 584 formal approvals for setting up of SEZs. Out of which, 381 SEZs have been notified so far and 148 SEZs are in operation as on December 31, 2011. Out of operational SEZs, 17 are multi-products SEZs and remaining are IT/ ITES, engineering, electronics, hardware, textile, bio-technology, gem & jewellery.

The SEZs, which were publicized as major vehicles for investment and export promotion, were allowed a host of tax exemptions under a special SEZ Act of 2005. Under the law, incentives for SEZ units include 100% income tax exemption on export profits earned for the first 5 years, a 50% for the next 5 years and another 50% exemption on re-invested profits in the following 5 years.

The early phase saw developers lining up in big numbers for the projects. It was also seen as a real estate opportunity. However, following concerns about loss of tax revenue by the finance ministry, the government has proposed phasing out the tax sops for the units commencing operations after 2014. Moreover, farmer’s protests have made land acquisition a problem area.

The S&P CNX Nifty gained 51.05 points or 0.95% to settle at 5,419.20. The index touched a high and low of 5,423.40 and 5,338.90 respectively. 33 stocks advanced against 17 declining ones on the index. (Provisional)

The top gainers on the Nifty were Reliance Power up 5.20%, BPCL up 4.61%, Tata Power up 4.40%, Sterlite Industries up 4.07% and Jindal Steel up 3.88%.

On the other hand, Sun Pharma down 1.92%, DLF down 1.44%, Grasim down 1.27%, Hindalco Industries down 1.09% and Gail India down 0.97% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 0.55%, Germany's DAX up 0.77% and Britain’s FTSE 100 up 0.34%.

Asian stocks snapped the day’s trade mostly in the negative terrain on Thursday after data showed inflation in China was heating up again, complicating efforts by Beijing to stimulate the world’s No. 2 economy. But the losses remained capped as investors bet on a positive outcome to Greek reform talks needed for a fresh bailout.

Japanese Nikkei pulled back from a three-month high and ended with a cut of over half a percent on Thursday after Japanese core machinery orders for December 2011 fell by 7.1 percent on a seasonally adjusted basis. The figure, which excludes the volatile shipping and electric power industries, marked a downturn from a 14.8 percent expansion in November. Hong Kong shares ended with marginal cut after stronger than expected Chinese inflation data. Investor sentiments hit a hurdle after China released data showing consumer prices had risen 4.5 percent in January over a year earlier, up from the previous month’s 4.1 percent. Food prices jumped 10.5 percent, driven by a 25 percent gain in the cost of pork, the staple meat in China. However, Chinese shares ended flat, with strength in property developers outweighing losses in financial and resources sectors.