TCS number energises market once again; Sensex closes above 17,200

The Indian markets reversed their last session’s trade and showed smart recovery after initial hiccups to convalesce around half of their previous day’s losses. Though, volatility crept in the latter part of the trade but riding on the jubilation of the IT bellwether TCS, markets managed to sail comfortably and ended near the high points of the day. Earlier, the benchmarks made a flat but positive start, the lower ending of the US markets and the mixed start of the Asian markets weighed on the sentiments. Trade took a choppy turn and in the initial hours the markets lost momentum to trade in red. Later, slow but steady recovery took the markets higher and by noon the benchmarks were trading near the high points of the day with Sensex crossing 17,200 mark and Nifty breaching 5,200 levels.

Meanwhile, it was IT pack that mainly propelled the markets of which IT major TCS played the major role, surging by over 12% on reporting better than expected numbers. The company’s profit was up by 19% for the quarter, while the full year standalone profit surged by 45%. The numbers encouraged the other majors of the sector and Wipro surged by over 4%, while HCL Technology gained over 4%, even the other major Infosys that has been lagging in last session on disclosing that the company was under scrutiny from US regulating authorities for likely errors in employer eligibility documents of its staff, too moved up by over a percent. The oil marketing companies (OMCs) rejoiced in the latter part of the trade on report that the government has agreed in-principle to deregulate diesel prices. However, it said that it is not considering similar proposal for the cooking gas.

However, all the sectors were not lucky and the market participants went for selective value picking, Capital Goods (CG) sector turned out to be the laggard of the day, losing over one percent as barring few, most of the sector heavy weights declined heavily. Larsen and Toubro despite bagging construction contract worth Rs 500 crore from M3M India lost about 3%. On the same time, the telecom stocks continued their pounding after Telecom Regulatory Authority of India (TRAI) on Monday proposed a reserve price of Rs 3,622 crore for the auction of 1MHz of pan-India 2G spectrum in the 1800 megahertz band, almost 10 times as compared to Rs 380 crore in the 2008 sale. Bharti Airtel lost another 2%, Idea Cellular was down by around 4% and RCom closed lower by over a percent. The one non-sectoral gauge, Paper that remained buzzing in last session too suffered profit booking, AP Papers plunged by over 8%, West Coast Paper lost over 3%, while Ballarpur Industries was down by two and half a percent.

The other dampener of the day came in the form of underperformance by the broader indices, which despite some effort in first half could not manage a positive close and the BSE Mid-cap index lost about 0.13%, while the BSE Small-cap index closed lower by 0.07%.

Finally, the BSE Sensex gained 110.61 points or 0.65% to settle at 17,207.29, while the S&P CNX Nifty rose by 22.05 points or 0.42% to close at 5,222.65.

The BSE Sensex touched a high and a low of 17,247.53 and 17,046.72 respectively. The BSE Mid cap and Small cap index were down by 0.13% and 0.07% respectively.

The major gainers on the Sensex were TCS up by 12.84%, Wipro up by 4.44%, Tata Power up by 2.54%, Hero MotoCorp up by 2.30%, and Infosys up by 1.58% while L&T down by 2.63%, Bharti Airtel down by 2.02%, Bajaj Auto down by 1.63%, DLF down by 1.46% and Gail India down by 1.23% were the major losers on the index.

The major gainers on the BSE sectoral space were IT up by 4.93%, TECk up by 3.34%, Power up by 0.53%, Metal up by 0.52% and FMCG up by 0.35%, while Capital Goods (CG) down by 1.29%, Health Care (HC) down by 0.35%, Bankex down by 0.26% and Oil & Gas down by 0.03% were major losers on the BSE sectoral space.

Meanwhile, the government has in principle agreed to deregulate diesel prices. However no details have been given about the time frame and extent of the deregulation.

In a written reply told the Rajya Sabha the government has stated that the decision to decontrol diesel prices has been taken in principle. However, the government added that retail selling prices would be moderated to insulate the common people.

The government has been under increasing pressure to cut its subsidies on fuel, food and fertilizers that are straining its finances.

In June 2010, it lifted control over petroleum prices and said that it will eventually free diesel prices too. But the government has been reluctant to do so as it could drive up inflation as well as result in severe political repercussions. 

The S&P CNX Nifty touched a high and low of 5,232.35 and 5,180.35 respectively.

The top gainers on the Nifty were TCS up by 12.74%, SAIL up by 4.45%, Wipro up by 4.11%, HCL Tech up by 3.26% and Tata Power up by 3.04%.

On the flip side, Ambuja Cement down by 4.88%, L&T down by 2.87%, Kotak Bank down by 2.56%, ACC down by 2.53%, and GAIL down by 2.07% were the top losers on the index.

The European markets were trading in green, as France's CAC 40 up 1.21%, Britain’s FTSE 100 up 0.35%, while Germany's DAX was up by 0.71%.

After witnessing a sluggish trade in the morning trade, most of the Asian counters rebounded on the back of bargain hunting amid positive opening in European counters. Hong Kong shares gained in choppy trade, bouncing off the day’s lows helped by major Chinese banks after the Shanghai-listed Bank of Beijing's quarterly earnings came in better than expected. Banks also helped the mainland Chinese markets end flat after a topsy turvy session.

Meanwhile, Tokyo shares closed 0.78 percent lower following overnight losses on Wall Street stoked by political and economic uncertainty in Europe. However, Taiwan stocks ended up 0.24 percent, reversing initial losses and outperforming regional peers, as Apple plays such as Hon Hai Precision Industry and Catcher Technology advanced ahead of the California-based company’s second fiscal quarter earnings.