Post Session: Quick Review

The penultimate day of the week turned out to be a good session for the Indian frontline equity indices as they managed to settle with gains of over half a percent after three previous disappointing sessions. Sentiments got some support with Finance Minister Arun Jaitley expressing the hope of passage of the Constitutional Amendment Bill for the Goods and Services Tax and the Insolvency Code in the forthcoming Budget Session of Parliament. He sought to play down worries on the government’s public debt, saying it’s in a comfortable position and the overall liabilities of the Centre are on a medium-term declining trajectory. Appreciation in the Indian rupee too supported the sentiment. Rupee recovered 27 paise to 67.80 against the dollar in early trade, snapping the three-day falling streak on fresh selling of the US currency by banks and exporters. Furthermore, buoyed by a rise in incoming new work, strengthening underlying demand and improved weather conditions, India's service sector output touched a 19-month high in January with the seasonally adjusted Nikkei Services Business Activity Index climbing to 54.3 compared with 53.6 in December 2015, also supported upside. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 357 crore on February 03, 2015.

On the global front, Asian markets ended mostly higher on Thursday as oil prices bounced back and weak US economic data fueled investor hopes that the Fed would slow the pace of rate hikes this year. The dollar sank after New York Fed President William Dudley said that the U.S. central bank would have to take into account tight global financial conditions when considering further rate hikes. Moreover, European equities bounced back in early trading, with commodities-related shares surging after a sharp decline in the US currency that made dollar-priced crude oil and metals cheaper for holders of other currencies.

Back home, the benchmark got off to a rollicking opening as investors rejoiced after a weak US services data, which dampened hopes of a further rate hike by the Federal Reserve in the near future which in turn hammered the dollar and spurred a rise in the oil prices. The frontline indices soon gathered momentum and traded with around a percent gains through the noon session of trade. But the optimism soon started showing signs of easing in late hours of trade and profit booking in few sectors, weighed down the local bourses. Yet, final hour buying ensured that the key indices do not shut shops way below the intraday highs and snap the three session declining streak. Eventually the NSE’s 50-share broadly followed index Nifty, convalesced by over half a percent to settle above the crucial 7,400 support level, while Bombay Stock Exchange’s Sensitive Index, Sensex accumulated over one hundred and fifty points and closed just below the psychological 24,400 mark. On the BSE sectoral space, good buying was seen across the board, as not even a single sectoral index went home in the negative territory. Investors piled up hefty positions in Metal counter which rocketed by three percent, while high beta sectors like - Capital Goods, Power and Consumer Durables too soared in the session. Moreover, the broader markets succumbed to the selling pressure despite showing positive moves early on and settled with moderate cuts.  The market breadth remained pessimistic as there were 1069 shares on the gaining side against 1574 shares on the losing side, while 133 shares remained unchanged.

The BSE Sensex ended at 24378.56, up by 155.24 points or 0.64% after trading in a range of 24224.74 and 24514.01. There were 21 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.01%, while Small cap index lost 0.57%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 3%, Capital Goods up by 2.25%, Power up by 1.10%, Consumer Durables up by 1.08% and IT up by 0.95%, while there were no losers on the sectoral front.  (Provisional)

The top gainers on the Sensex were ONGC up by 3.26%, Asian Paints up by 2.73%, Larsen & Toubro up by 2.67%, Adani Ports &Special up by 2.50% and Tata Motors up by 2.03%. On the flip side, Lupin down by 2.92%, NTPC down by 2.06%, Cipla down by 1.59%, Bajaj Auto down by 1.58% and SBI down by 1.26% were the top losers. (Provisional)

Meanwhile, Cabinet Committee on Economic Affairs in its meeting headed by Prime Minister Narendra Modi approved allocation of coal linkages for non-regulated sector only through auction, ending the past practice of selective allocation and potentially raising costs for users.

Power and Coal Minister Piyush Goyal said that allocation of coal linkages for the non-regulated sector, which includes steel and cement, will be only through the auction route to ensure transparency.

The Minister further said that proposed auction methodology leads to price through a market mechanism; it does not seek to maximise revenue, he said that “it ensures that all market participants of non-regulated sector have a fair chance to coal linkage, irrespective of size.”

Following the decision, state-controlled Coal India will put up a quarter of its production for auction to non-power companies. But companies that had long-term fuel contracts with Coal India will continue to get supplies until their term expires.

Coal Secretary Anil Swarup said that coal linkages for 24 million tonnes would go under the hammer in the first year. Letter of Assurance is issued on furnishing Commitment Guarantee followed by execution of fuel supply agreement (FSA) on the fulfillment of LOA conditions in the stipulated period of time. Till now, Standing Linkage Committee has been deciding on allocation of long-term and short-term linkages for the sectors, including power and steel.

The CNX Nifty ended at 7412.80, up by 51 points or 0.69% after trading in a range of 7365.95 and 7457.05. There were 36 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were Vedanta up by 11.27%, Cairn India up by 6.59%, Tata Power up by 3.94%, Hindalco up by 3.53% and ONGC up by 3.14%. On the flip side, Idea Cellular down by 3.24%, Lupin down by 2.88%, Yes Bank down by 2.12%, NTPC down by 2.06% and Cipla down by 1.97% were the top losers. (Provisional)

European markets were trading in green; France’s CAC was up by 4.81 points or 0.11% to 4,231.77, Germany’s DAX gained by 32.03 points or 0.34% to 9,466.85 and UK’s FTSE 100 surged by 45.52 points or 0.78% to 5,882.66

Asian equity markets ended mostly in green on Thursday, with sentiment supported by a late rebound on Wall Street overnight, higher oil prices and speculation about the Federal Reserve putting interest-rate increases on hold. Chinese shares closed higher, as yuan worries eased and China's central bank stepped up efforts to stave off potential liquidity squeeze heading into the week-long Lunar New Year holidays next week. Hong Kong stocks ended higher as energy shares surged on a rebound in oil prices, while an overnight tumble in the US dollar eased fears of capital outflows. However, Japanese shares bucked the uptrend to end at a one-week low as a result of a firmer yen and weak earnings forecasts from Panasonic and Hitachi.  Taiwan Weighted was closed for the start of the long break for the Lunar New Year.