Post Session: Quick Review

Boisterous benchmarks showcased an enthusiastic performance on Friday, by rallying over one and a half percentage points amid strong global cues. After a negative start, markets bounced back in the positive territory and there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong stocks. Frontline indices not only ended the session near intraday high levels but also recaptured their crucial 7,550 (Nifty) and 24,800 (Sensex) bastions as investors took to hefty across the board buying.

Sentiments remained optimistic with Planning Commission’s former deputy Chairman Montek Singh Ahluwalia stating that Indian economy, which expanded at 7.7 percent between 2003 and 2014 has the potential to clock 8 percent growth in the near future. Some support also came in with report that the Reserve Bank of India (RBI) is approaching the end of its rate-cutting cycle and is expected to go for a final 25-basis points (bps) repo rate cut at its policy review meet on February 2. Buying got accelerated after the fiscal deficit data for April-December 2015-16 has presented a better picture of the government’s finance compared to the corresponding period last year. Fiscal deficit was 4.88 trillion rupees ($71.90 billion) during April-December, or 87.9 percent of the full-year target as compared to 100.2 percent of the full-year target during the same period a year ago.

Global cues too remained supportive with European counters making a firm start and CAC, DAX and FTSE were trading with a gain of over a percent in early deals. Asian markets ended in green as the yen swooned after the Bank of Japan stunned markets by taking one of its main interest rates into negative territory, its boldest step yet to reinflate the economy.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Appreciation in Indian rupee too aided sentiments. The rupee firmed up by 36 paise to 67.87 against the US dollar at the time of equity markets closing at Interbank Foreign Exchange market on fresh selling of the American currency by exporters.

Buying in metal space and oil and gas sector too aided sentiments on the back of rebound in oil and commodity prices. However, telecom stocks remained under pressure for second day in a row after the Telecom Regulatory Authority of India (Trai) has proposed auction of 700 MHz spectrum at a reserve price of Rs 11,485 crore per MHz. This is the highest reserve price fixed for a band ever since the process for spectrum auction started nearly five years ago.

The NSE’s 50-share broadly followed index -- Nifty -- rose by around one hundred and forty points to end above the psychological 7,550 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex -- surged by over four hundred points to finish above the psychological 24,800 mark. Broader markets too traded with traction and ended the session with a gain of around two percent.

The market breadth remained in favor of advances, as there were 1,567 shares on the gaining side against 1,028 shares on the losing side while 188 shares remain unchanged. (Provisional)

The BSE Sensex ended at 24870.69, up by 401.12 points or 1.64% after trading in a range of 24340.06 and 24911.90. There were 23 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 2.02%, while Small cap index up by 1.07%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 3.26%, Healthcare up by 2.51%, IT up by 2.43%, Energy up by 2.08% and TECK up by 2.04%, while Telecom down by 1.05% remained the lone loser on BSE sectoral front. (Provisional)

The top gainers on the Sensex were Hero MotoCorp up by 4.96%, Sun Pharma up by 4.90%, Coal India up by 4.76%, Bajaj Auto up by 3.50% and Dr. Reddys Lab up by 3.49%. On the flip side, SBI down by 3.16%, Tata Steel down by 2.67%, ICICI Bank down by 1.74%, NTPC down by 1.49% and ITC down by 0.19% were the top losers. (Provisional)

Meanwhile, amid government efforts to attract investment in the various sector, the quality of foreign direct investment (FDI) coming into the country has improved substantially, according to Reserve Bank of India data. Much of these FDI flows in the country have surged in the September 2014-November 2015 period after Prime Minister Narendra Modi launched the Make in India campaign and bettered portfolio inflows during the preceding 15 months.

Modi's Make in India initiative is aimed at turning the country into a global manufacturing hub to generate jobs, raise incomes and drive growth. The government has been seeking to drum up investment as part of this effort. India's growth is being driven by public spending and consumption with private investment yet to kick in substantially.

Gross FDI inflows amounted to $62.6 billion, 31% higher than $47.6 billion in the preceding 15 months. This is more than triple the amount of net portfolio inflows of $14.3 billion in the same period. Though a sizeable amount is estimated to have gone to the manufacturing sector, including consumer goods and food processing, among others, a section of the market feels that a portion of the FDI inflows could have come through the private equity route.

The CNX Nifty ended at 7563.55, up by 138.90 points or 1.87% after trading in a range of 7402.80 and 7575.65. There were 40 stocks advancing against 10 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 11.21%, Vedanta up by 6.61%, Hero MotoCorp up by 5.17%, Sun Pharma up by 4.65% and Coal India up by 4.35%. On the flip side, Bank Of Baroda down by 3.65%, SBI down by 2.89%, Tata Steel down by 1.77%, Idea Cellular down by 1.39% and Cairn India down by 1.33% were the top losers. (Provisional)

European markets were trading in green; France’s CAC surged 59.15 points or 1.37% to 4,381.31, UK’s FTSE 100 increased 72.47 points or 1.22% to 6,004.25 and Germany’s DAX was up by 120.36 points or 1.25% to 9,759.95.

Asian equity markets ended in green on Friday, after Wall Street stocks rebounded overnight, crude prices extended overnight gains and the safe-haven Japanese yen weakened in the wake of further Bank of Japan easing. Japanese shares ended higher after the Bank of Japan (BoJ) unexpectedly eased monetary policy further by introducing a negative interest rate policy. The BoJ said it was adopting an interest rate of minus 0.1 percent, adding that it would charge interest for excess reserves financial institutions park with the central bank. The BoJ also said it would cut interest rates further into negative territory if necessary.  China stocks rebounded as investors looked for bargains among severely beaten down shares, but the market is still on track to post its biggest monthly fall since the depths of the global financial crisis. Investors drew some relief after the People's Bank of China said it would increase the frequency of open market operations between January 29 and February 19 to keep the banking system flush with cash.