Post session - Quick review

Protracting previous session’s northbound journey, benchmark equity indices clinched additional ground to conclude the session with solid gains of over percent and a half each. Barometer gauges depicted resilience in the dearth of any significant positive triggers from global markets.

Indian equity markets garnered traction for second straight session in a row as investors continued to basket select blue chip stocks at prevailing levels. Merger deal of Satyam Computer Service with Tech Mahindra mainly fuelled optimism across Dalal Street. After an announcement an exchange ratio was fixed at 2:17, i.e. 2 shares of Tech Mahindra for 17 shares of Satyam, both the stocks gained considerable traction of over 3% each.

Although the bears covered the entire pending shorts across the BSE sectoral space, but stocks from Capital Goods, Realty and Bankex counters emerged as pillars of strength, as the respective index pivotal rallying in the range of 2-3% each, did a commendable task  took the indices to a level which was seen pre budget. The session’s splendid rally could be well credited to the up move of the broader indices, which performing well for themselves, outclassed the larger peers as both midcap and small cap index closed with gains of over a percent.

On the global front, following the weak closings in U.S. markets overnight, Asian pacific shares also failed to gain sufficient traction leading to not so favorable close on Wednesday as data from China suggested a slowdown in their economy raising concerns over global economic recovery. Resource stocks were under pressure following comments from mining giant BHP Billiton, which warned that Chinese demand for iron ore, which is used for making steel, was flattening. Meanwhile, the European shares, breaking a two-day downtrend rose on Wednesday, as investors positioned for positive US housing data, which should provide evidence of further economic recovery.

Back on the home turf, the BSE Sensex gained 290.23 points or 1.68% and settled at 17,606.41. The index touched a high and a low of 17,619.53 and 17,275.88 respectively. 26 stocks advanced against 4 declining ones on the index (Provisional).

The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1727:1148 while 134 scrips remained unchanged. (Provisional)

The BSE Mid-cap index gain 2.07% while Small-cap index was up 1.28%. (Provisional)

On the BSE Sectoral front, Realty up 3.75%, Capital Goods up 3.57%, Bankex up 2.62%, Power up 1.97% and Metal up 1.88% were the top gainers while there were no loser.

The top gainers on the Sensex were DLF up 4.42%, L&T up 4.23%, Tata Steel up 4.10%, ICICI Bank up 3.24% and TCS up 3.03%.

On the flip side, Hindalco Industries down 0.83%, ONGC down 0.46%, Wipro down 0.46% and Sun Pharma down 0.37% were the only losers in the index. (Provisional)

Meanwhile, foreign direct investment (FDI) has increased by a whopping 92% in January 2012 as compared to the same month last year. Foreign inflows to the Indian economy were to the tune of $2 billion in January 2012 as compared to $1.04 billion in January 2011. Cumulative inflows for the period of April-January were to the tune of $26.19 billion in the current fiscal as compared to $19.42 billion in FY’11.

Services topped the list of sectors to receive the largest FDI for the period April-January in FY’12 to the tune of $ 4.83 billion, followed by pharmaceuticals ($3.20 billion), telecommunication ($1.99 billion), construction ($2.23 billion), power ($1.56 billion) and metallurgical industries ($1.65 billion).

Mauritius remained the top source of inflows ($8.91 billion), due to the double taxation avoidance treaty. Other sources were Singapore ($4.30 billion), Japan ($2.75 billion), UK ($2.75 billion), Germany ($1.46 billion), Netherlands ($1.16 billion) and Cyprus ($1.31 billion).

Experts feel that this number of $2 billion is not big and if investor sentiment is improved by bringing in  reforms like allowing 100% FDI in multi brand retail and insurance, it could be pushed much further.

Recently, the government has liberalised the FDI regime and allowed overseas investment in bee-keeping and share-pledging for raising external debt. Besides, the conditions for FDI in construction of old-age homes and educational institutions have been eased by not subjecting them to the minimum and built-up area, capitalisation and lock-in period norms as applicable for the construction activities. India VIX, a gauge for market’s short term expectation of volatility lost 4.28% at 21.00 from its previous close of 21.94 on Tuesday. (Provisional)

The S&P CNX Nifty gained 93.15 points or 1.77% to settle at 5,368.00. The index touched high and low of 5,370.60 and 5,256.00 respectively. 43 stocks advanced against 7 declining ones on the index. (Provisional)

The top gainers on the Nifty were JP Associates up 5.24%, Reliance Infrastructure up 5.02%, Ranbaxy up 4.68%, DLF up 4.45% and L&T up 4.36%.On the other hand, Cairn India down 1.37%, Hindalco Industries down 0.87%, Wipro down 0.71%, Sun Pharma down 0.66% and ONGC down 0.51% were the top losers. (Provisional)

The European markets were trading in green, with France's CAC 40 up 0.46%, Germany's DAX up 0.22% and Britain’s FTSE 100 up 0.20%.

After trading choppy most part of the day’s trade, Asian counters pared their losses in the late trade and ended mostly in the positive terrain on Wednesday following firm opening in European counterparts. Though, the sentiments in region remained dampened in the morning session as concerns about China, which has cut its growth target for the year, were raised on Tuesday when BHP Billiton said the country’s demand for iron ore looked to be flattening as its economy slows, with exports weakening.

China is Japan’s largest trading partner, with Japanese firms directly affected by slowing demand in the world’s second-biggest economy. There fore the Japanese market also succumbed by 0.6 percent, off an 8-1/2-month high of 10,172.64 marked on Monday. Tuesday was a holiday in Japan. Investors took profit in major exporters, which have logged meteoric gains this year. However, Chinese Shanghai ended the trade on a flat note, while Taiwan stocks gained by 0.12 percent with contract chipmaker TSMC and smartphone maker HTC helping the index to rise. Moreover, Straits Times, Jakarta Composite and KLSE Composite remained the other indices which ended in the green.