Post session - Quick review

Indian equity markets witnessed jubilant run on Wednesday as the frontline equity indices amassing gigantic gains of over percent and a half  ended the session near their crucial psychological level of 18100 (Sensex) and 5500 (Nifty) mark respectively. Local bourses surging past the previous session’s gains, that were highest in last 6 months, staged a smart show. However, the rally was just not extended to the frontline indices, the broader indices too made contributions.

Barometer indices surged above psychological resistance levels on the back of liquidity driven rally after sentiments turned bullish across the Asian markets. Regional counterparts concluded higher on, despite disappointing US retail data and Greek leaders blowing a chance of quick EU bailout approval. Euro zone finance ministers dropped plans for a face-to-face meeting on Wednesday on Greece's new international bailout, saying party leaders in Athens failed to provide the required commitment to reform. Meanwhile, the US Commerce Department said January retail sales rose by 0.4 percent from December, the biggest gain since October. However, risk appetite was also enhanced with European markets as the stocks in that region climbed after China pledged to help resolve the region’s debt crisis and Greek leaders said they would provide written austerity promises in exchange for a European Union-led bailout. Moreover, U.S. index futures also rose.

Back on the home turf, in stock moving as per news flow, Auto stocks put forth a commendable performance as the barometer gauge accumulated gains of over three percent boosted by the 6% spurt in Tata motors, which has been on a buying spree ever since it reported stronger-than-expected Q3 numbers. 40.5% rise in company’s quarterly profit was on the back of robust sales at Jaguar Land Rover, which made up for weakness in its home market. The stock also surged as its global vehicle wholesales rose 21% in January from a year earlier. Tata sold 119,799 vehicles in January, with passenger cars accounting for 66,785, a rise of 26%.

However, performance of market bellwether-Reliance Industries- remained a drag over the market in today’s trading session as the stock lost over 1.25% on reports that gas output from its D6 block, which currently produces about 37 mmscmd of gas, is expected to fall by about 10% to 34 million standard cubic metres a day (mmscmd) by April.

On the flip side, although buying interest was visible across all sectoral front, Realty stocks continued to trade from strength to strength despite disappointing performance of India’s No 3 real estate developer by market value-Unitech- which reported a halving of its quarterly net profit on Tuesday, as the company was hit by a fall in demand for houses in a rising interest rate environment. Besides, Realty all the interest rate sensitive rose on expectations that recent sharp fall in inflation could provide room for the Reserve Bank of India to start cutting interest rates in the coming months to prop up slowing economy. Purchases of both residential and commercial property are largely driven by finance. Among banks and financial stocks, ICICI Bank rose 3 per cent; SBI, HDFC Bank and HDFC gained nearly 2 per cent.  The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1836:1133 while 110 scrips remained unchanged. (Provisional)

The BSE Sensex gained 335.29 points or 1.88% and settled at 18,183.86.The index touched a high and a low of 18,231.35 and 18,000.30 respectively. 24 stocks advanced against 6 declining ones on the index (Provisional)

The BSE Mid-cap index gained 2.07% while Small-cap index was up by 1.29%. (Provisional)

On the BSE Sectoral front, Realty up 5.07%, Capital Goods up 3.91%, Power up 3.60%, Bankex up 3.47% and Auto up 3.34% were the top gainer while Oil & Gas down 0.37% and FMCG down 0.13% were the only losers. (Provisional)

The top gainers on the Sensex were Tata Motors up 6.77%, DLF up 6.35%, Tata Power up 5.95%, BHEL up 5.08% and L&T up 4.65%. (Provisional)

On the flip side, RIL down 1.18%, HUL down 0.77%, Cipla down 0.64%, ITC down 0.17% and Sun Pharma down 0.14% were the top losers in the index. (Provisional)

Meanwhile, India’s telecom watchdog - Telecom Regulatory Authority of India (TRAI) has suggested that foreign holding in telecom tower companies be limited to 74%. If the proposal is accepted it could discourage buyouts by foreign companies. It could also impact Indian operations of NASDAQ-listed American Towers (ATC) and Reliance Communications, which is trying to sell its tower business unit to raise funds.

Currently, 100% foreign direct investment is allowed in tower companies but TRAI is keen to lower this and bring it on a par with other telecom services to bring all forms under a unified license regime. If implemented, existing infrastructure providers will be required to take new unified licenses whose conditions shall apply to tower companies as well.

ATC, the world's largest tower company, owns 100% of its Indian subsidiary and lowering the foreign investment cap will force it to change the shareholding structure of the Indian operations. Some telecom tower companies, including Reliance Infratel, are looking at stake sales and the 74% limit could impact their fund-raising plans.

TRAI wants the new cap to be part of the revised rules for the sector - the National Telecom Policy 2012 - which will replace the existing framework that has been in place for more than a decade. But any change in foreign investment norms will require Cabinet approval. The 74% foreign investment cap for tower companies is part of the draft rules, which were shared with both the industry and the telecom department over the weekend.

The regulator has asked the industry to specify the maximum time frame that should be given to comply with the new foreign investment cap. After discussion with the industry, the regulator will send its final proposals to the government, which has to approve them before they become effective. The proposals are not binding on the government.

India VIX, a gauge for market’s short term expectation of volatility lost 2.68% at 22.10 from its previous close of 22.71 on Tuesday. (Provisional)

The S&P CNX Nifty gained 109.45 points or 2.02% to settle at 5,525.50. The index touched high and low of 5,542.10 and 5,460.60 respectively. 44 stocks advanced against 6 declining ones on the index. (Provisional)

The top gainers on the Nifty were Reliance Power up 12.85%, JP Associates up 8.11%, Tata Motors up 7.39%, Axis Bank up 7.11% and DLF up 6.46%. On the other hand, RIL down 1.23%, HUL down 0.96%, Cipla down 0.68%, Cairn India down 0.57% and Sun Pharma down 0.24% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 1.08%, Germany's DAX up 1.10% and Britain’s FTSE 100 up 0.28%.

Sentiments remained bullish in Asian region and all the Asian equity indices snapped the day’s trade in the green after Greece indicated a willingness to commit to spending cuts to secure its bailout while, moves by Japan’s central bank to support the economy lifted its powerhouse export sector too supported the sentiments. However, the upside remained capped due to disappointing US retail sales and a delay in a euro-zone finance ministers meeting on Greece taking a back seat.

Meanwhile, Hong Kong and China shares jumped on Wednesday, lifted by growth-sensitive sectors that helped benchmark indexes close above long-term resistance levels for the first time since mid-2011, pointing to further strength ahead. The Shanghai Composite Index ended at its highest since December 1, 2011 while the Hang Seng Index produced its best close since August 4. Gains accelerated in rising turnover after mid-morning comments by China central governor Zhou Xiaochuan that Beijing will continue to invest in euro zone government debt triggered more short covering.