Benchmarks snap two days losing streak; Nifty ends above 7,550 mark

A session after displaying a distressing performance, Indian benchmark indices managed to pull through a scintillating performance by rallying over half a percent on Wednesday.  Sentiments got a boost with Paris-based think tank OECD stating that India is witnessing firming economic growth while most of the developed economies are seeing mixed trends. The assessment based on Composite Leading Indicators (CLIs) stated that India's CLI inched up to 100.4 in November from 100.2 in October. Investors also were cheered by gains on Wall Street that snapped a losing streak, including an eight-day slump for the Nasdaq composite. Some support also came with Moody’s Investors Service expects India to remain among the world’s fastest growing major economies in 2016, but believes market trends this year will depend on whether inflation remains under control and corporate profits revive. However, marketmen were pessimistic for most part of the session as India's consumer inflation probably edged up for the fifth straight month in December, driven by higher food prices, complicating the central bank's task of steering monetary policy at a time of international deflation. Also, Industrial production (IIP) contracted by 3.2 per cent in November -- the lowest level in over four years -- due to poor performance of manufacturing sector and a sharp decline in capital goods output. On the global front, Asian markets ended mostly in green as investors turned cheerful after China reported improved exports in December, salving nerves about the world's No. 2 economy. China's exports rose 2.3 percent in December from a year earlier in yuan terms, reversing a 3.7 percent drop in November. European markets too opened on a strong note, with UK’s FTSE 100, France’s CAC and Germany’s DAX surging over a percent. Meanwhile, Oil rose for the first time this year and the offshore yuan strengthened for a fifth day.

Back home, the benchmarks got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. However, the indices slipped into the negative territory and even went on to test important psychological 24,400 (Sensex) and 7,450 (Nifty) levels. The key gauges got solid support around those intraday low levels as they convalesced from thereon. The bourses further capitalized on the late momentum and spurted in afternoon trades on the back of broad based bottom fishing in undervalued stocks. But, a mild profit booking in dying moments of trade ensured that the key indices shut shops off the intraday highs. Finally ,the NSE’s 50-share broadly followed index Nifty, shut shop after surging over half a percent and regained the crucial 7,550 support level while Bombay Stock Exchange’s Sensitive Index, or Sensex accumulated over one hundred and fifty points to close a tad above the psychological 24,850 mark. However, The broader markets had to bear a brutal assault today as they went on to underperform their larger peers by quite a margin with BSE’s midcap shaving off 0.46% and BSE’s smallcap shelving off 1.76%.

On the BSE sectoral space, Auto counter remained the top gainer in the space with around a percent followed by the high beta- IT index which ended with gains of over half a percent. Among other shares, Cement stocks witnessed buying interest on ICRA’s report that India's cement demand is likely to improve gradually in the medium term in line with recovery in infrastructure, investment cycle and overall economy. On the flipside, the Capital Goods and Power sectors languished at the bottom of the table with losses of 1.34% and 1.11% respectively. Meanwhile, the market breadth remained pessimistic as there were 644 shares on the gaining side against 2160 shares on the losing side while 167 shares remained unchanged.

Finally, the BSE Sensex gained 172.08 points or 0.70% to 24854.11, while the CNX Nifty ended up by 52.10 points or 0.69% to 7,562.40.

The BSE Sensex traded in a range of 24956.54 and 24387.69. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices made a negative closing; the BSE Mid cap index ended down by 0.46%, while Small cap index ended down by 1.76%.

The top gaining sectoral indices on the BSE were Auto up by 0.89%, IT up by 0.69%, Bankex up by 0.66%, Oil & Gas up by 0.63% and TECK up by 0.49%, while Capital Goods down by 1.34%, Power down by 1.11%, Realty down by 1.04%, PSU down by 0.58% and Metal down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 3.09%, Infosys up by 3.08%, Tata Motors up by 2.65%, Mahindra & Mahindra up by 1.97% and Hindustan Unilever up by 1.32%. On the flip side, Adani Ports &Special down by 2.65%, Bharti Airtel down by 2.05%, Lupin down by 2.01%, TCS down by 1.88% and Larsen & Toubro down by 1.85% were the top losers.

Meanwhile, rising for straight five months in a row, the retail or the Consumer Price Index (CPI) inflation for the month of December stood at 5.61 percent compared to 5.41 percent in November and 4.28 per cent in December 2014, on the back of costlier vegetables and cereals. This has limited the headroom for the Reserve Bank to lower rate next month.

As per the data released by the Ministry of Statistics and Programme Implementation, Consumer Price Index numbers on Base 2012=100 for Rural, Urban and Combined for the Month of December 2015 stood at 6.32%, 4.73% and 5.61% as against 5.95%, 4.71% and 5.41% in the month of November 2015. Meanwhile, Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for the month of December 2015 stood at 6.41%, 6.31% and 6.40% respectively. The General Indices (Provisional) for the month of December 2015 for Rural, Urban and Combined are 127.9, 124.0 and 126.1 respectively. The CFPI for Rural, Urban and Combined for the same month are 131.2, 131.4 and 131.3 respectively.

Food inflation stood at nine month high of 6.4 per cent. Retail prices of cereals and products moved up by 2.12 per cent in December, from 1.7 per cent in November. The growth in prices in meat and fish stood out at 6.57 per cent as against 5.34 per cent in November while that of eggs was at 0.97 per cent, from 0.5 per cent in the previous month. Pulses continue to pose a big challenge for policymakers as the rate of price growth stood at 45.92 per cent, only marginally down from 46.08 per cent in November.

Retail inflation in the oil and fats category moved up to 7.06 per cent while that of fuel and light, it was 5.45 per cent. However, seasonal fruits turned cheaper in December, with inflation print at 0.64 per cent although vegetables prices grew 4.63 per cent.

The Reserve Bank of India (RBI) predicts inflation will accelerate to 5.8% by January 2016.The RBI takes into account retail inflation while formulating monetary policy. In its bi-monthly monetary policy review in the beginning of December, RBI Governor Raghuram Rajan had maintained status quo in its key repo rate as retail inflation has been on a rising trend for past few months.

The CNX Nifty traded in a range of 7,590.95 and 7,425.80. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Infosys up by 2.96%, Reliance Industries up by 2.65%, Indusind Bank up by 2.50%, HCL Tech up by 2.34% and Tata Motors up by 2.25%. On the flip side, Vedanta down by 3.62%, Idea Cellular down by 3.58%, Adani Ports &Special down by 2.70%, L&T down by 2.48% and Bharti Airtel down by 2.03% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 67.11 points or 1.13% to 5,996.35, France’s CAC surged 71.94 points or 1.64% to 4,450.69 and Germany’s DAX was up by 137.64 points or 1.38% to 10,123.07.

Asian equity markets ended mostly in green on Wednesday after China reported improved exports in December, salving nerves about the world’s second largest economy. Data showed China's exports rose for the first time since June. China's exports unexpectedly rose 2.3 percent in December from a year earlier in yuan terms, after a 3.7 percent drop in the previous month. Imports dropped an annual 4 percent, an improvement over the previous month's 5.6-percent fall. Besides, a rebound in oil prices after seven days of declines also helped spur some bargain hunting in beaten-down shares. Japanese stocks rebounded sharply and posted their first gains of 2016 after better-than-expected China's trade data soothed sentiment and a weaker yen lifted oversold exporters.