Re-energized bulls take Nifty beyond crucial 5,600 bastion; Sensex climbs 0.75%

First trading day of February series F&O expiry week turned out to be an encouraging one for the key benchmark indices which climbed to the levels not seen since July 25, 2011 on large volumes. Boisterous indices showcased yet another enthusiastic performance on Tuesday by extending the gaining streak for second consecutive session and breaking a lot of psychological levels on the northbound journey. The frontline indices re-captured the psychological 5,600 (Nifty) and 18,400 (Sensex) levels in the session after garnering three fourth of a percentage points. The gains appeared even more prominent as they came on a day when most Asian markets exhibited uninspiring trends. Coming from an extended weekend, investors took to hefty across the board buying on the back of encouraging reports that Finance ministers from the Euro-zone have finally struck a deal for Greece's second bailout package however, details were still being worked out in the early hours of Tuesday, more than 12 hours after discussions began. Sentiments also remained upbeat in the session after government released an encouraging India's first-ever CPI-based inflation data which showed inflation based for Rural Labourers (CPI-RL) and Agricultural Labourers (CPI-AL) fell to 4.92% and 5.27% in January from 6.37% and 6.72% in December. The rate sensitive Realty pocket witnessed hefty position buildup as it settled with over four percent gains while stocks from the power sector continued to hog the limelight once again. However, the information technology counter remained the only chink in the armor as it settled in the negative terrain with marginal losses. On the global front, Asian markets trimmed all their losses by the end to end largely on an optimistic note while European markets there are trading on a weak note despite reports that Euro-zone ministers have sealed a second bailout for debt-laden Greece that will resolve its immediate financing needs.

Earlier on the Dalal Street, the benchmark got off to a positive opening as investors shrugged pessimistic sentiments prevailing in Asian markets. The frontline indices took advantage of the initial impetus and remained in fine fettle through the morning trades. Afternoon session saw the key gauges inching above the psychological 5,600 (Nifty) and 18,400 (Sensex) levels which for once proved as stern resistances as the key indices slipped below those levels in mid-noon trades. However, late recovery in the markets indicated that bulls were determined to see the frontline indices pass those psychological levels by the end of trade. Eventually, the NSE’s 50-share broadly followed index Nifty climbed by three fourth percent to close above the crucial 5,600 support level while Bombay Stock Exchange’s Sensitive Index or Sensex garnered over a hundred and thirty points and ended below the psychological 18,400 mark. Moreover, the broader markets too traded with fervor and amassed around a percent gains, outperforming their larger peers. The markets gained on extremely large volumes of over Rs 2.26 lakh core while the turnover for NSE F&O segment remained on the higher side as compared to that on Friday at over Rs 1.53 lakh crore. The market breadth was positive as there were 1674 shares on the gaining side against 1301 shares on the losing side while 112 shares remained unchanged.

Finally, the BSE Sensex gained 139.26 points or 0.76% to settle at 18,428.61, while the S&P CNX Nifty rose by 42.85 points or 0.77% to close at 5,607.15.

The BSE Sensex touched a high and a low of 18,470.86 and 18,293.80 respectively. The BSE Mid cap and Small cap indices were up by 0.91% and 1.20% respectively.

The major gainers on the Sensex were BHEL up 4.78%, ONGC up 3.70%, Hindalco Industries up 2.95%, Reliance Industries up 2.92% and Bharti Airtel up 2.79%, while, Sterlite Industries down 3.46%, Tata Power down 2.61%, Wipro down 1.46%, Tata Motors down 0.99% and Hindustan Unilever down 0.82% were the major losers on the index.

The top gainers on the BSE sectoral space were Realty up 4.34%, Consumer Durables (CD) up 3.29%, Oil & Gas up 2.29%, Power up 0.97% and Capital Goods (CG) up 0.87%, while IT down 0.16% was the only loser on the BSE sectoral space.

Meanwhile, with the growing resistance for the newly constituted National Counter Terrorism Centre (NCTC) among states, government has decided to hold discussion. The fire was ignited by Odisha’s Chief Minister Naveen Patnaik which has now spread to as many as 13 states who are opposing NCTC. These CMs are claiming that NCTC is usurping the powers of states and disturbing the federal structure.

Union Telecom and HRD Minister Kapil Sibal has however clarified that 'If they (states’ CMs) have any concerns, there is no problem in having a dialogue...If there is any misgivings, no problem, we can have a dialogue but all that is being done by the central government for counter terrorism operations.' Justifying NCTC Sibal stated that now NCTC will be deployed with the powers which were earlier with the central government.

Earlier, West Bengal’s CM Mamata Banerjee had written letter to Prime Minister stating “It is difficult for the state government to accept such arbitrary exercise of power by the central government/central agency, which have a bearing on the rights and privilege of the states as enshrined in the Constitution of India. The order, therefore, appears to be an infringement on the powers of state governments in matters of investigation and maintenance of order.”  After setting up National Investigation Agency, Home Minister P Chidambaram has decided to set up NCTC to avert 26/11 type attacks. NCTC is slated to come into force effective March 01, 2012 and will be regulated by the director of the rank of Additional Director General with three units - gathering intelligence, analysis of intelligence and carrying out operations - and each of these division would be headed by a joint director of Intelligence Bureau.

The S&P CNX Nifty touched a high and low of 5,621.50 and 5,561.75 respectively.

The top gainers on the Nifty were BHEL up 4.56%, ONGC up 4.43%, Reliance Infra up 3.76%, Bharti Airtel up 2.89% and Hindalco up 2.85%.

On the flip side, Sterlite Industries down 3.61%, Tata Power down 2.99%, BPCL down 1.66%, Wipro down 1.41% and NTPC down 1.28% were the top losers on the index.

The European markets were trading in red as France's CAC 40 down 0.53%, Britain’s FTSE 100 down 0.42% and Germany's DAX down by 0.59%.

Most of the Asian equity indices pared their losses in the late trade on Tuesday after euro zone policy makers agreed to a second bailout package for Greece in marathon talks that went deep into the Brussels night. Hong Kong and China indices turned positive in the late trade as turnover picked up after euro zone finance ministers sealed a second bailout for Greece that will resolve its immediate financing needs. Earlier, Hong Kong and China shares drifted lower, dragged by weakness in Chinese oil majors and as investors locked in profit after their recent outperformance on fears that escalating oil prices could hurt earnings performance. However, Japanese Nikkei slipped by 0.23 percent in a choppy session after failing to top the key resistance level of 9,500 on Tuesday.