Post session - Quick review

After witnessing a brutal laceration of over two and half a percentage points in the previous trading session, barometer gauges made a strong recovery. However, the pullback that came after the previous session’s dramatic sell off was long overdue. Benchmark 30 share index -Sensex- in the previous four trading session lost over 1000 points only to gain close to 200 points in today’s trading session, which took the barometer index higher above the crucial psychological level of 17,600 level.  Similarly, fresh buying by funds and retailers at attractive lower levels also took the NSE 50-share Nifty higher above the psychological 5350 mark.

Market men after shorting their position in the previous four consecutive trading sessions, betrothed in bottom fishing, underpinned by ease in oil prices, which offset concerns over rising energy costs undermining efforts to curb inflation and lower interest rates. Oil dropped for a second day today, losing as much as 0.6% to $107.89 a barrel, potentially cutting costs for companies in India, which imports three-quarters of its oil.

Gigantic gains of over a percentage points at Dalal Street also cropped up in the backdrop of positive global set up, which made the investor’s go long on their position. After a sparkling close of bourses at Wall Street overnight, Asia pacific stocks too ended in fine fettle as data showed a slightly improved housing market in the US. The National Association of Realtors said its index of sales agreements rose 2 percent last month to a reading of 97, the highest since April 2010. A reading of 100 is considered healthy. Investors in Hong Kong exercised caution ahead of a slew of earnings reports from blue chip companies this week, including property developer Sino Land Co., and Hong Kong Exchanges & Clearing., the territory's stock exchange, albeit that index still garnered gain of over 1.50%.Meanwhile, European stock market, which too sneaked higher ahead of the European Central Bank's second long-term refinancing operation due Wednesday led to that additional spark into Indian equity markets.

Back on home turf, although bulls retaliated to take a hold over the BSE’s sectoral space, however, gains of today’s trading session were mainly on the back of  buying in high beta Realty and Metal counters, while consumer durables stocks also saw strong gains.  Besides these, Anil Ambani group stocks extended gains on the 50-stock Nifty index. Reliance Infra  was the top gainer followed by Reliance Communications, Reliance Power also extended gains. Other infra stocks like Jaiprakash Associates and IDFC also saw buying interest. All these stocks were beaten down last session. Reliance Industries (2%), promoted by Mukesh Ambani, also traded higher. However, the stocks of Information Technology counters declining over a half a percentage points remained the only shot in the arm.

The BSE India Sensitive Index (SENSEX), or Sensex, ending a four-day 5.3 percent decline, advanced 1.25% to end above the 17600 mark. Similarly, the S&P CNX Nifty (NIFTY) Index on the National Stock Exchange of India gained over a 1.25% to conclude over 5350 level. The broader markets looked moresprightly after yesterday's sharp fall - midcap and smallcap indices rose over 2.5% led by support from infrastructure and banks stocks.

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 2098:796 while 126 scrips remained unchanged. (Provisional)

The BSE Sensex gain 288.41 points or 1.65% and settled at 17,734.16. The index touched a high and a low of 17,776.82 and 17,530.44 respectively. 24 stocks advanced against 6 declining ones on the index (Provisional)

The BSE Mid-cap index gained 3.45% while Small-cap index was up by 2.89%. (Provisional)

On the BSE Sectoral front, Realty up 6.07%, Capital Goods up 4.56%, Bankex up 3.88%, Power up 3.64% and Metal up 3.31% were the top gainers while IT down 0.44% and FMCG down 0.19% were the top losers.

The top gainers on the Sensex were BHEL up 7.18% Tata Motors up 4.98%, Hindalco Industries up 4.86%, DLF up 4.85% and SBI up 4.80%.

On the flip side, TCS down 1.86%, ITC down 0.85%, Wipro down 0.85%, Sun Pharma down 0.65% and NTPC down 0.61% were the top losers in the index. (Provisional)

Meanwhile, sharp rise in the prices of petrol, diesel and liquefied petroleum gas (LPG) cylinders can be expected after the conclusion of the Assembly polls in the five States. With the volatile international crude oil prices exerting pressure on the oil companies’ balance sheets, the government may be forced to hike prices before the start of the parliament session on March 12.

Tensions between the United States and Iran coupled with latest European Union sanctions against Tehran have ignited the crude oil markets worldwide. The Indian crude oil basket touched a new high of $123 per barrel on February 27. However, the Oil Marketing Companies (OMC) has not been able to revise prices due to the crucial assembly elections in states such as Uttar Pradesh, Punjab and Uttarakhand.

Even though petrol prices were deregulated by the government in June 2011, any change in them has to be approved by the EGoM. The prices, which are supposed to be recalibrated every fortnight, haven’t been changed since December 01, 2011 keeping in view the assembly elections.

The oil industry claims to have lost about Rs 900 crore since the last revision. Besides petrol, State-owned oil firms are losing Rs 12.77 per litre on diesel, Rs 30.21 a litre on kerosene and Rs 378 per 14.2-kg domestic LPG cylinder. Indian Oil Corp., Bharat Petroleum and Hindustan Petroleum are losing over Rs 410 crore a day on sale of diesel, domestic LPG and kerosene.

With the government’s subsidy bill threatening to go out of control and the OMCs suffering huge losses, pressure is mounting on the government to bring in a sharp hike in prices of petrol, diesel and LPG. If it comes through, the hike in petrol prices is expected to be around Rs 4 per litre, as per government officials. Cooking gas prices too could go up by Rs 70 per cylinder and diesel by about Rs 5 per litre.

India VIX, a gauge for market’s short term expectation of volatility lost 5.58% at 25.85 from its previous close of 27.38 on Monday. (Provisional)

The S&P CNX Nifty gain 94.80 points or 1.80% to settle at 5,376.00. The index touched high and low of 5,391.10 and 5,306.45 respectively. 42 stocks advanced against 8 declining ones on the index. (Provisional)

The top gainers on the Nifty were Reliance Infrastructure up 8.97%, JP Associates up 6.72%, Reliance Power up 6.45%, IDFC up 6.36% and BHEL up 6.13%.

On the other hand, Cairn India down 3.37%, TCS down 2.24%, BPCL down 1.26%, Wipro down 1.07% and ITC down 0.54% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 0.34%, Germany's DAX up 0.40% and Britain’s FTSE 100 up 0.18%.