Post session - Quick review

Indian equity markets outperformed the globe just on the day when the world indices took a pounding on top rating agency Moody's warning of slashing the triple-A ratings of France, Britain and Austria as it downgraded rating of six other European nations including Italy, Spain and Portugal, citing growing risks from Europe's debt crisis.

Frontline equity indices putting forth a tough act of resilience not only amassed gains over half a percent, but also concluded near the high point of the day. Frantic buying in the wee hours of trade took the benchmark 30 and 50 share index of Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) piercing above its 17800 and 5400 level respectively.

Investor’s took a heart out of the January’s month inflation data that slowed to its lowest level in more than two years in January as food prices fell, sparking hopes that the RBI will start cutting interest rates sooner rather than later to battle the country's economic slowdown. The wholesale price index, India's main gauge of inflation, rose 6.55 percent in January from a year earlier, its slowest rise since November 2009.

However, on the global front, Asian shares settled mixed on Tuesday, while European shares drifted lower, owing to the investors’ reluctance to make any bold moves after Moody's downgrade and also as doubts about the implementation of Greek austerity measures crept in.

However, Japan's Nikkei 225 index, reversing early morning losses, rose 0.6%. The gains came as the Bank of Japan, following a policy meeting, announced it would buy more government bonds while keeping short-term interest rates near zero to boost the economy.

Back home, in stocks moving as per news flow, Lanco Infratech was on buying spree as the stock amassed gains of over 16% after the power company reported that it was in talks with few investors to sell a minority stake in its power business for raising $600-$750 million for funding its expansion plans.

Meanwhile, stocks of country's second-largest power utility by market value-Reliance Power-too spurted over 2% after the company posted a 42% jump in quarterly net profit aided by higher generation and a doubling of other income. Reliance Power, controlled by billionaire Anil Ambani, on Monday reported its net profit at Rs 204 crore in three months through December, while sales which jumped 82% stood at Rs 457 crore from a year ago.

Additionally, stocks of Tata Power too rallied over 3% after the company reported a higher-than-expected 40.5 percent rise in quarterly profit, as strong sales at its Jaguar Land Rover unit offset rising input costs. On the flip side, Cipla tumbled more than 6% after the drug maker reported a lower-than-expected 16% rise in its December-quarter net profit. The company’s net profit stood at Rs 269.91 crore for the quarter ended December 31, 2011. While, its net profit for the third quarter last fiscal stood at Rs 232.69 crore.

However, Software exporters were another victim of the day, which plunged on worries that the global economic woes might impact technology spending by corporates. Shares in Tata Consultancy Services were down 0.3%, Infosys fell 0.5%, while Wipro was trading down 0.5%.

Back on the BSE Chart, broader indices too finished the trade on euphoric note as they went home with gains. BSE midcap index piped the frontline index-by accumulating gains of over a percent, while the small cap index pocketed profit of over half a percent.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1577:1297 while 134 scrips remained unchanged. (Provisional)

The BSE Sensex gained 115.83 points or 0.65% and settled at 17,888.67. The index touched a high and a low of 17,890.33 and 17,742.58 respectively. 15 stocks advanced against 15 declining ones on the index (Provisional)

The BSE Mid-cap index gained 1.22% while Small-cap index was up by 0.85%. (Provisional)

On the BSE Sectoral front, Capital Goods up 3.18%, Auto up 2.68%, Realty up 2.37%, Bankex up 0.92% and Consumer Durables up 0.75% were the top gainer while Health Care down 0.48% and Oil & Gas down 0.15% were the only losers. (Provisional)

The top gainers on the Sensex were Tata Motors up 5.36%, L&T up 5.12%, Maruti Suzuki up 3.44%, Hero MotoCorp up 3.11% and Hindalco Industries up 3.01%. (Provisional)

On the flip side, Cipla down 6.26%, Tata Power down 3.56%, ONGC down 1.75%, Bharti Airtel down 1.65% and HDFC Bank down 0.77% were the top losers in the index. (Provisional)

Meanwhile, India’s headline inflation slipped to a more than 2-year low in January, giving some relief to the policy-makers and the Reserve Bank of India (RBI) scope to cut interest rates in the forthcoming policy review to counter weakening economic growth. Headline inflation, as measured by the Wholesale Price Index (WPI), fell to 6.55% In January 2012 as compared to 7.47% in December 2011. The numbers were broadly in-line with the generally expected number of 6.7% and have confirmed the downward movement of prices.

As per data released by the Ministry of Commerce and Industry, the annual rate of inflation for ‘all commodities’, based on monthly WPI (Base: 2004-05 = 100), stood at 6.55% (Provisional) for the month of January, 2012 (over January, 2011) as compared to 7.47% (Provisional) for the previous month and 9.47% in January 2011. Build-up inflation in the financial year so far was 5.48% compared to a build-up of 8.58% in the corresponding period of the previous year.

Primary articles index was up by 0.9% for January 2012 as compared to December 2011. The index for ‘Food Articles’ group rose by 0.3% to 191.4 (Provisional) from 190.8 (Provisional) for the previous month due to higher prices of fish-marine (11%), bajra (7%), jowar, barley and maize (5% each), poultry chicken (4%), masur (3%), mutton (2%) and milk and wheat (1% each). However, the prices of condiments & spices (5%), tea (4%), fruits & vegetables (3%) and moong, urad, gram, ragi and rice (1% each) declined.  The index for ‘Non-Food Articles’ group rose by 2.4% to 182.8 (Provisional) from 178.6 (Provisional) for the previous month due to higher prices of gaur seed (35%), flowers (16%), logs & timber (10%), soyabean (9%), groundnut seed and linseed (7% each), raw jute (6%), rape & mustard seed (4%), niger seed and gingelly seed (3% each) and safflower, raw silk and mesta (1% each).  However, the prices of castor seed (7%), raw rubber (6%), copra (4%), raw cotton (3%) and sunflower (1%) declined.

The index for ‘Minerals’ group rose by 1.9% to 324.5 (Provisional) from 318.5 (Provisional) for the previous month due to higher prices of sillimanite (22%), zinc concentrate and iron ore (4% each), magnesite and crude petroleum (2% each) and barytes (1%).  However, the prices of dolomite (2%) declined.Inflation numbers for fuel and power rose by 0.1% in January as compared to December 2011, due to higher prices of light diesel oil (4%), lignite (3%) and naphtha (1%).  However, the prices of bitumen (1%) declined.

The much awaited numbers of inflation in manufactured products showed a rise of 0.4% m-o-m. The index for ‘Food Products’ group rose by 0.3% and that for ‘Beverages, Tobacco & Tobacco Products’ group rose by 0.4%. Inflation numbers in the textile sector rose by 0.4% m-o-m and by 0.2% m-o-m for ‘Wood & Wood Products’ group. Inflation for the ‘Paper & Paper Products’ group rose by 0.2% and that for ‘Leather & Leather Products’ declined by 0.2% for Jan 2012 as compared to December.

Further the index for ‘Rubber & Plastic Products’ group rose by 0.8% and for ‘Chemicals & Chemical Products’ group rose by 0.7%. The index for ‘Non-Metallic Mineral Products’ group rose by 0.3% and for ‘Basic Metals, Alloys & Metal Products’ group rose by 0.8%, m-o-m. The index for ‘Machinery & Machine Tools’ group rose by 0.1%.

The final numbers for November were revised up to 9.46% from 9.11%. The WPI is more closely watched than the consumer price index (CPI) in India as it covers a higher number of products. C Rangarajan, Chairman of the Prime Minister's Economic Advisory Council stated that the fall in inflation numbers was welcome but it would be wiser to wait and watch at this stage. The finance minister too said that the numbers could fall further in the coming months.

The Reserve Bank of India has raised interest rates 13 times since March 2010 in a bid to bring down inflation, putting a dampener on industrial activity and slowing economic growth. Inflation was in double-digits for most of 2011 before easing in December, fuelled by surging food prices. Moreover, economic growth in India has slowed sharply and is expected to be around 6.9% for the current financial year to March.

India VIX, a gauge for market’s short term expectation of volatility lost 4.21% at 22.71 from its previous close of 23.71 on Monday. (Provisional)

The S&P CNX Nifty gained 37.25 points or 0.69% to settle at 5,427.45. The index touched high and low of 5,428.05 and 5,377.95 respectively. 28 stocks advanced against 22 declining ones on the index. (Provisional)

The top gainers on the Nifty were Reliance Communications up 5.69%, Tata Motors up 5.56%, L&T up 5.21%, Maruti Suzuki up 3.67% and Hindalco Industries up 3.59%.

On the other hand, Cipla down 5.96%, Tata Power down 3.33%, Siemens down 1.94%, ONGC down 1.73% and Bharti Airtel down 1.62% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 0.23%, Germany's DAX down 0.18% and Britain’s FTSE 100 down 0.27%.

Asian stock markets snapped the day’s trade on mixed note on Tuesday after ratings agency Moody’s slapped credit downgrades on six European Union countries due to the region's weak economic outlook and uncertain attempts to implement reforms. Moody's Investor Service on Monday downgraded its credit ratings on Italy, Portugal and Spain. France, Britain and Austria kept their top ratings but had their outlooks dropped to negative from stable. Moody's also cut its ratings on the smaller nations of Slovakia, Slovenia and Malta. All nine countries are members of the European Union.

Meanwhile, Japanese Nikkei 225 index, reversing early morning losses, rose 0.60 percent. The gains came as the Bank of Japan, following a policy meeting, announced it would buy more government bonds while keeping short-term interest rates near zero to boost the economy.