Indian benchmarks convalesce in late trade; Nifty re-conquers 5,400 levels

After squandering for most part of the session around the previous closing levels, the domestic benchmark equity indices staged a smart comeback in the last leg of trade and snapped Thursday’s session with about a percent gains. In its northbound journey, the 50-share Nifty not only extended its gaining streak for second straight session but also retraced the psychological 5,400 levels, which were last seen only on August 3, 2011. The frontline indices have vivaciously rallied close to twenty percentage points since the lows hit in December 2011 and have even outperformed most major markets across the globe thanks to the relentless buying by foreign funds who have poured in $3.6 billion in local equities so far this year. A day after being outclassed by the global markets, the frontline indices smartly bounced back in the session and across the board hefty position build up, helped the gauges to outperform all its Asian as well as European counterparts. Sentiments got support after global rating agency Fitch affirmed that India is facing cyclical slowdown rather than a structural downturn. Fitch stated that this may further ease inflation, which appears to have passed its peak and thereby giving room to RBI to move to a more accommodative monetary policy, after recent increases in policy rates. Meanwhile, investors overlooked India’s trade data which showed that exports grew by about 10.1% y-o-y in January while imports increased by 20.3%, thus widening India's trade deficit to $14.7 billion as against $12.8 billion in December 2011. On the earnings front, heavyweight Hindaclo succeeded in trimming a large part of its losses in the session after announcing third quarter earnings numbers, which were not as bad as the street had expected. Also stocks like Apollo Tyres and Ambuja Cements got commended for reporting encouraging quarterly results. On the global front, Asian equity indices settled on a mixed note after disappointing Chinese inflation reading for January while weak Japan's core machinery orders data too, raised concerns over global growth outlook. European markets though are trading on a positive note as well received earnings from Daimler spurred buying in Auto sector stocks while investors awaited further developments on Greece.

Earlier on the Dalal Street, the benchmark got off to a negative opening as the indices drifted lower since investors largely remained influenced by the pessimistic sentiments prevailing in Asian markets. After trading with moderate cuts through the morning session, the lethargic equity indices gradually crawled sideways without any fervor through the afternoon trades. However, a sudden revival in sentiments was witnessed in the last leg of trade as stocks from Metal and Banking counters rebounded to provide the much needed support. Eventually the benchmarks managed to regain the key 5,400 (Nifty) and 17,800 (Sensex) levels and snap the session around high point of the day. The NSE’s 50-share broadly followed index Nifty, surged about a percent to settle above the crucial 5,400 support level while Bombay Stock Exchange’s Sensitive Index or Sensex garnered over a hundred points and ended above the psychological 17,800 mark. Moreover, the optimism in broader markets remained intact through the day, which helped the indices settle on a strong note with over a percent gains, outperforming their larger peers. On the BSE sectoral space, Metal counter remained top gainer in the space with gains of two percent while the rate sensitive Realty and Bankex sectors too finished with handsome gains. The markets climbed on strong volumes of over Rs 1.48 lakh core while the turnover for NSE F&O segment remained on the lower side as compared to that on Wednesday at over Rs 1.12 lakh crore. The market breadth remained optimistic through the day as there were 1,828 shares on the gaining side against 1,057 shares on the losing side while 125 shares remained unchanged.

Finally, the BSE Sensex gained 123.43 points or 0.70% to settle at 17,830.75, while the S&P CNX Nifty rose by 44.20 points or 0.82% to close at 5,412.35.

The BSE Sensex touched a high and a low of 17,879.46 and 17,609.43 respectively. The BSE Mid cap and Small cap indices were up by 1.27% and 1.18% respectively.

The major gainers on the Sensex were Sterlite Industries up 4.59%, Jindal Steel up 3.81%, Tata Power up 3.38%, Bajaj Auto up 3.30% and HDFC Bank up 2.79%. While, Sun Pharma down 1.36%, Hindalco down 1.31%, DLF down 1.15%, Bharti Airtel down 1.13% and L&T down 1.01%, were the major losers on the index.

The top gainers on the BSE sectoral space were Metal up 2.05%, Realty up 1.95%, Bankex up 1.85%, Auto up 1.78% and Consumer Durables (CD) up 1.28%, while Oil & Gas down 0.24%, Capital Goods (CG) down 0.11% and Health Care (HC) down 0.03% were top losers on the sectoral space.

Meanwhile, exports continued to grow, but on a moderate basis by about 10.1% y-o-y in January 2012 to $25.4 billion, while imports increased by 20.3% at $40.1 billion widening India's trade deficit to $14.7 billion in January 2012 as against $12.8 billion in December 2011.

Commerce Secretary, Rahul Khullar, citing provisional data, has said that Indian exports which stood at $25 billion in December 2011 and have grown to $25.4 billion in January 2012. Imports are up from $37.7 billion in December 2011 to $40.1 billion in January 2012.

Cumulative exports for the period April- January reached $242.8 billion.  Imports on the other hand grew by 29.4% to $391.5 billion during the April-January period. The trade deficit stood at $ 148.7 billion for the period.

Khullar further stated that though India’s trade deficit has increased in January 2012, it is not a worrisome number and can be expected to narrow down over the next two months. India's exports for the fiscal year through March are expected to be between $295 billion and $305 billion with imports totaling $460 billion, while the trade gap is seen around $160 billion in FY12.

The S&P CNX Nifty touched a high and low of 5,423.40 and 5,338.90 respectively.

The top gainers on the Nifty were RPower 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 flip side, Sun Pharma down 1.92%, DLF down 1.44%, Grasim down 1.27%, Hindalco down 1.09% and GAIL down 0.97% were the top losers on the index.

The European markets were trading in green as France's CAC 40 was up 0.38%, Britain’s FTSE 100 up 0.18% and Germany's DAX up by 0.52%.

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.