Jubilation continues on Dalal Street in noon deals

Indian equity benchmarks continued to trade jubilantly in noon deals amid short-covering and renewed buying interest at lower levels after the sharp correction last week. The rupee was trading higher by 11 paise at 68.13 to the US dollar on the back of selling of the US currency by exporters and banks. On the economic front, Index of Industrial Production (IIP) contracted an annual 1.3% in December 2015 compared to the same month last year. Meanwhile, annual consumer price inflation edged up to a 17-month high of 5.69% in January, driven up by higher food costs. CPI in December 2015 stood at 5.61%.

On the global front, Asian stocks rebounded from a three-year low, led by Japanese shares, amid speculation losses that pushed global equities into a bear market were excessive. The yen dropped with gold as haven assets fell out of favour, while China's yuan jumped by the most since a dollar peg ended in 2005.

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. The banking and financial pack are witnessing action after finance minister Arun Jaitely said the government would reduce its stake in public sector banks (PSBs) to 52 per cent. Among PSU banks, Bank of Baroda witnessed a sharp rebound after the management said that all non-performing assets were accounted for in the third quarter and it could return to profitability next fiscal. The market breadth on the BSE was positive; there were 1,922 shares on the gaining side against 478 shares on the losing side while 97 shares remain unchanged.

The BSE Sensex is currently trading at 23547.71, up by 561.59 points or 2.44% after trading in a range of 23197.67 and 23554.34. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 3.42%, while Small cap index up by 3.59%.

The top gaining sectoral indices on the BSE were Metal up by 6.92%, Realty up by 5.65%, Capital Goods up by 5.52%, PSU up by 4.67% and Materials up by 4.53%, while Telecom was down by 0.70% was the lone loser on the index.

The top gainers on the Sensex were Tata Steel up by 10.42%, Adani Ports &Special up by 7.27%, SBI up by 7.10%, Larsen & Toubro up by 7.10% and Axis Bank up by 5.42%. On the flip side, Bharti Airtel down by 1.88% and Hindustan Unilever down by 0.89% were the top losers.

Meanwhile, surging for the sixth straight month, the retail or the Consumer Price Index (CPI) inflation for the month of January climbed to 5.69 per cent from 5.61 percent in the month before. It has touched its 16 month high mainly due to costlier food prices, posing a challenge to further easing of monetary policy by the Reserve Bank. The pace of retail price rise in January 2016 is the highest since 6.46 percent in September 2014. Food inflation, or CFPI, during the month, ruled higher at 6.85 percent, as compared to 6.4 percent in December 2015, and at 6.14 percent in January 2015.

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 January 2016 stood at 6.48%, 4.81% and 5.69% respectively as against 6.32%, 4.73% and 5.61% in the month of December 2015. Meanwhile, Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for the month of January 2016 stood at 6.93%, 6.50% and 6.855 respectively. The General Indices (Provisional) for the month of January 2016 for Rural, Urban and Combined are 128.1, 124.2 and 126.3 respectively.  The CFPI for Rural, Urban and Combined for the same month are 131.1, 131.0 and 131.1 respectively.

Retail prices of 'cereals and products' inched up by 2.19 percent in January, from 2.12 percent in December 2015. The rate of price rise in meat and fish category was 8.23 per cent during the month, while it was 3.96 percent for eggs. The substantial price rise in these items is mainly attributed to their higher consumption during winter.

However, prices of seasonal fruits witnessed deflation during the month, with a fall of (-) 0.24 percent. But vegetable prices moved up fairly at 6.39 percent. Prices of 'pulses and its products' continued to stay elevated, as inflation was as high as 42.32 percent.

The Reserve Bank of India has set a 6 percent retail inflation target for January 2016. Presenting the first bi-monthly monetary policy statement for this fiscal in April last year, RBI Governor Raghuram Rajan had said CPI inflation would hover around 5 percent in the first half of the fiscal, and a little above 5.5 percent in the second half.

The CNX Nifty is currently trading at 7160.85, up by 179.90 points or 2.58% after trading in a range of 7056.80 and 7163.90. There were 47 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 23.04%, Vedanta up by 14.07%, Tata Steel up by 10.69%, Hindalco up by 9.20% and Adani Ports & Special up by 7.58%. On the flip side, Idea Cellular down by 1.82%, Bharti Airtel down by 1.79% and Hindustan Unilever down by 1.27% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted rose 3.51 points or 0.04% to 8,066.51, FTSE Bursa Malaysia KLCI increased 13.63 points or 0.83% to 1,657.37, Jakarta Composite gained 23.87 points or 0.51% to 4,738.26, KOSPI Index surged 26.92 points or 1.47% to 1,862.20, Hang Seng added 567.46 points or 3.1% to 18,887.04 and Nikkei 225 was up by 1069.97 points or 7.16% to 16,022.58. On the flip side, Shanghai Composite was down by 5.58 points or 0.2% to 2,757.91.