Rally in Auto, defensive shares abets Sensex’ fourth rise in row

Indian equity markets managed to snap yet another session in the green territory with the frontline equity indices amassing over half a percent gains and extending the gaining streak for the fourth consecutive session. The frontline gauges showed side-ways movement since the start of trade and see-sawed around the psychological 5,300 (Nifty) and 17,400 (Sensex) levels through the morning trades. Sentiments remained subdued tracking the apathetic cues from Asian peers amid gloomy overnight developments.

However, the key gauges succeeded in coming out of their range bound trajectory in afternoon trades and trended northwards, thanks to the rally in Automobile and Healthcare counters. Sentiments got a lift after European markets opened on an encouraging note ahead of Spanish debt auction as investors focused on reports that China would increase liquidity supply by employing measures like open market operations and reserve requirement ratio cuts in order to spur economic growth.

On the domestic front, investors came across official data showing FDI into India increased by a whopping 74% to $2.21 billion in February as compared to the same month last year taking FDI for the period April- February 2011-12 to $24.8 billion, substantially higher than $19.42 billion in 2010-11, and $25.83 billion in 2009-10. However, despite India's exports exceeding government's target for the year through March, trade deficit widened to a record high following a surge in crude oil and gold imports. 

On the BSE sectoral space, the rate sensitive Automobile counter rallied higher than all its peers in the space with over two percent gains. While the defensive pockets like Healthcare and FMCG too witnessed hefty buying interests as they surged by around a percent each.

But, the Capital Goods and Power sectors declined by over half a percent and remained top laggards as heavyweight BHEL got pounded by over three and half a percent amid reports that an US investment bank downgraded BHEL to Underweight citing slack demand led India from an under-supplied to an over-supplied market for power equipment.

Meanwhile there emerged mixed trends from the earnings front as on one hand cement major ACC got pummeled on reporting numbers that were below Street’s estimates while on the other, Indusind bank reported numbers that were in line with market expectations.

On the global front, cues from Asia remained unsupportive as most markets in the region traded on a negative note after disappointing quarterly earnings number from tech majors like IBM and Intel, renewed worries over the Europe’s onerous debt crisis and Japanese trade data which showed that the nation registered biggest annual trade deficit ever.

However, the European markets on the other hand, traded with good gains of over half a percent after investors showed a healthy appetite for Spanish bond auction while the upbeat earnings announcements too supported sentiments.

Back home, the NSE’s 50-share broadly followed index Nifty, climbed over half a percent to settle above the psychological 5,300 support level while Bombay Stock Exchange’s Sensitive Index - Sensex amassed over hundred and ten points to finish just above the crucial 17,500 mark. Moreover, the broader markets too went home with gains in the session but failed to outperform their larger peers as they rose only by a quarter percent.

The markets gained on strong volumes of over Rs 1.44 lakh crore while the turnover for NSE F&O segment remained on the higher side as compared to that on Wednesday at over Rs 1.09 lakh crore. The market breadth remained optimistic as there were 1,492 shares on the gaining side against 1,364 shares on the losing side while 116 shares remained unchanged.

Finally, the BSE Sensex gained 111.32 points or 0.64% to settle at 17,503.71, while the S&P CNX Nifty rose by 32.40 points or 0.61% to close at 5,332.40.

The BSE Sensex touched a high and a low of 17,530.30 and 17,361.71 respectively. The BSE Mid cap and Small cap index were up by 0.25% and 0.27% respectively.

The major gainers on the Sensex were Coal India up by 3.85%, HDFC Bank up by 3.22%, Tata Motors up by 3.15%, Maruti Suzuki up by 2.92%, and Hero MotoCorp up by 2.42% while BHEL down by 3.66%, Hindalco down by 1.91%, Gail India down by 1.77%, Wipro down by 1.35% and RIL down by 1.01% were the major losers on the index.

The top gainers on the BSE sectoral space were Auto up by 2.05%, Health Care (HC) up by 1.18%, FMCG up by 0.96%, Metal up by 0.80% and IT up by 0.74%, while Capital Goods (CG) down by 0.89%, Power down by 0.78%, Oil & Gas down by 0.59%, Consumer Durables (CD) down by 0.48% and Realty down by 0.32% were major losers on the BSE sectoral space.

Meanwhile, the cotton advisory board (CAB) has pegged cotton production at 34.7 million bales for season 2011-12, against 33.9 million bales in 2010-11. As per the agriculture ministry, the number stood at 34 million bales for 2011-12. The total supply of cotton is now pegged a little higher at 39.2 million bales in 2011-12 as compared to 38.4 million bales in 2010-11.

The demand for the fluff is estimated 36.7 million bales in season 2011-12 as compared to 34.5 million bales in 2010-11. The mill consumption is estimated lower at 21.1 million bales in 2011-12 as against higher consumption of 22 million bales in 2011-12. The exports are however, estimated much higher at 11.5 million bales this year as compared to 7.8 million in the previous year.

As per CAB, Gujarat continues to remain the largest producer of cotton with estimated production of 12 million bales in 2011-12 as compared to 10.6 million bales in the previous year. Maharashtra's cotton production is expected to decline sharply at 7.3 million bales as compared to 8.7 million bales in 2010-11.

The north zone, which includes Punjab, Haryana and Rajasthan, is likely to move up at 5.6 million bales in 2011-12 from 4.5 million in 2010-11. The cotton production of south zone, which includes Andhra Pradesh, Karnataka and Tamil Nadu, is estimated at 7.4 million bales as compared to 7.7 million bales in 2010-11.

The S&P CNX Nifty touched a high and low of 5,342.45 and 5,291.30 respectively.

The top gainers on the Nifty were Coal India up by 4.07%, Maruti Suzuki up by 3.44%, Kotak Bank up by 3.28%, Tata Motors up by 3.24% and HDFC Bank up by 3.16%.

On the flip side, BHEL down by 3.89%, ACC down by 3.64%, Reliance Infra down by 2.20%, JP Associates down by 2.13%, and Hindalco down by 1.95% were the top losers on the index.

The European markets were trading in green, as France's CAC 40 up 0.49%, Britain’s FTSE 100 up 0.63%, while Germany's DAX was up by 0.43%.

After a sharp rally in previous session, Asian equity indices resumed their south-bound journey and most of the Asian counters ended mostly in the red on Thursday as investors remained cautious ahead of a Spanish bond auction later in the global day. With the eurozone debt crisis back in focus, investors are looking to a sale of Spain's benchmark 10-year government bonds later in the day for an indication of market confidence in the under-pressure country. However, the cur remained capped on reports that Chinese central bank would boost liquidity in the nation’s giant economy.

Meanwhile, China shares ended flat on profit-taking after posting its biggest one-day percentage rise in more than two months the previous day. Though, the financial sector found support from news that Chinese authorities would increase liquidity via open market operations and cut banks' required reserves to steer the economy towards a soft landing. However, Japan’s Nikkei average slipped over 0.80 percent, reversing the previous session’s gains as investors avoided risk ahead of a closely watched Spanish bond auction later in the day.