Post Session: Quick Review

Indian markets showed a scintillating rally on the last day of the week following a firm trend at other Asian markets, tracking overnight gains in the US markets on hints of additional stimulus by central banks and a rise in oil prices from 12-year lows, leading to a strong triple digit rally on the Indian benchmarks. Markets that looked firm from the beginning kept adding to the gains with no sign of profit taking from any cornor till last. Additionally market sentiments got a boost with RBI Governor Raghuram Rajan stating that economic reforms in India are in right direction. Though, he also said that the level is wrong. We have too much of the wrong kind of regulation and too little of the right kind of regulation. Also, the strength in rupee too boosted the morale of the markets, which surged amid hopes a rebound in crude oil prices globally may halt outflows from emerging markets (EMs). Both the benchmarks with gain of around two percent snapped the session near the high points of the day.

The mood remained jubilant on the global front too and after a bounce back in US markets overnight, the Asian markets showed the similar fervor and surged on Friday from a 3 1/2-year low, on speculation that central banks will expand stimulus measures after European Central Bank chief Mario Draghi indicated he may bolster economic support as soon as March. The Japanese market was the major gainer with diminished inflation expectations and a strengthening yen seen as adding increasing pressure on the Bank of Japan to enlarge stimulus. Later the European markets extending their last session rally, too made a strong start.

Back home, markets bull run continued unabated till the last with not even iota of profit taking. The one way upmove started in early morning halted only with the close of the trade. There was across the board buying and apart from the bluechips, the broader markets too equally participated in the rally. Markets continued getting support with the UN's trade agency UNCTAD’s report , just ahead of the release of the report on global investment in 2015 and forecasts for 2016, that Foreign Direct Investment (FDI) flows into India nearly doubled in 2015, while the US emerged as the top host country for FDI last year. Also, a survey released on the sidelines of WEF Annual Meeting ranked India 22nd on an inaugural list of the world's best countries. Some spurt was seen in steel stocks, as the government of China, which is the largest steel producer and consumer in the world, has laid out a reform plan to improve the high supply issue by shutting down the junk companies. It has been reported that the Chinese government has announced a special fund to support capacity cuts by providing shut down incentives, employee compensation and covering other related expenses. Metal stocks gains were mainly led by Vedanta which also got approval for various proposals for expansion of existing capacities at its pig iron plant by Goa Investment Promotion Board (GIPB). The aviation stocks were under pressure from the very beginning led by latest debutant to the exchanges, InterGlobe Aviation, which slumped over 19 percent. Net profit of the owner of India’s largest airline Indigo, in the quarter ended 31 December 2015 showed an increase of 24% from a year ago. Though Q3 results were good, there were some disappointments with regards to the Q2 performance because of the way the profits have been hit on account of the higher employee expenses. Other aviation stocks too remained under pressure, Spicejet lost over 3 percent, while Jet Airways was lower by over 6 percent.

The BSE Sensex ended at 24431.31, up by 469.10 points or 1.96% after trading in a range of 24120.04 and 24472.88. There were 26 stocks in green against just 4 stocks in red on the index. (Provisional)

The broader indices too ended with flying colours; the BSE Mid cap index was up by 1.92%, while Small cap index surged by 2.24%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 4.48%, Auto up by 3.81%, PSU up by 3.63%, Oil & Gas up by 2.97% and Bankex up by 2.83%. (Provisional)

The top gainers on the Sensex were GAIL India up by 8.10%, Maruti Suzuki up by 5.34%, Tata Steel up by 5.09%, Hero MotoCorp up by 5.01% and Mahindra & Mahindra up by 4.98%. On the flip side, Bharti Airtel down by 3.35%, Hindustan Unilever down by 0.39%, Wipro down by 0.27% and Adani Ports &Special down by 0.18% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India (RBI) has made a few amendments to its Master Direction on the Gold Monetisation Scheme in consultation with the government in order to make the scheme 'more customer-friendly'. RBI said that the depositors will be able to withdraw medium-term (5-7 year) and long-term government deposits (12-15 years) pre-maturely after the minimum lock-in period of three years in the case of medium term deposits and after five years in the case of long term deposits.

However, such withdrawal will attract a penalty, in the form of a lower rate of interest for premature withdrawals depending upon the actual period for which the deposit has run. The rate of interest on deposits will be decided by government and notified by the RBI from time to time. For medium-term deposits, withdrawal between three years and five years will attract a penalty of 0.375 per cent in reduced interest rate. For withdrawal between five to seven years, the penalty will be 0.25 per cent in a reduced interest rate. For long-term deposits, the penalty between five to seven years will be 0.25 per cent; between seven to 12 years, 0.375 per cent; between 12 to 15 years, 0.25 per cent.

Further, RBI said that for medium and long-term deposits in the first year, the government will pay banks a total commission of 2.5 per cent -- 1.5 per cent as handling charges and 1 per cent as commission. Moreover, in case of large tenders of gold, the RBI said that the metal can be deposited directly with refiners wherever they have the assaying capacity and added that this will reduce the time lag between the time the raw gold is deposited and it starts bearing interest.

At present the rate of interest as notified by the government on medium term deposit is 2.25 per cent per annum and for long term deposit is 2.50 per cent per annum.

The CNX Nifty ended at 7422.90, up by 146.10 points or 2.01% after trading in a range of 7327.60 and 7433.40. There were 43 stocks on gainers side against 7 stocks on losers side on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 7.64%, Mahindra & Mahindra up by 5.43%, Hindalco up by 5.27%, SBI up by 5.15% and Maruti Suzuki up by 5.15%. On the flip side, Idea Cellular down by 6.01%, Bharti Airtel down by 3.33%, Bosch down by 0.89%, ITC down by 0.73% and Hindustan Unilever down by 0.34% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 was up by102.15 points or 1.77% to 5,875.94, France’s CAC gained 119.33 points or 2.84% to 4,325.73 and Germany’s DAX increased 161.51 points or 1.69% to 9,735.67.

Asian equity markets ended in green on Friday, thanks to a rebound on Wall Street overnight following an uptick in oil prices and dovish comments from the European Central Bank (ECB). ECB President Mario Draghi on Thursday signaled that the governing council may provide more stimulus measures at its next meeting in March amid growing concerns over faltering global economic growth, which spooked investor sentiment worldwide. China stocks ended up in volatile trading, with the market drawing some support from a rebound in global equity markets. Japanese shares ended higher, buoyed by a weaker yen, the bounce in oil prices and speculation that the Bank of Japan may announce fresh monetary stimulus next week to fend off the threat of deflation. Hong Kong's shares closed nearly 3 percent higher, led by Chinese oil and coal producers after Premier Li Keqiang called for supply-side reforms and cutting overcapacity in the steel and coal industries.